At the end of 2020, before the launch of Xiaomi Mi 11’s new phone, Lei Jun positioned Xiaomi for 2021 as “packing light” and showing great momentum in the new year.
Xiaomi is of course very ambitious. The mobile phone market share left vacant by Huawei is huge. As the mainstay of domestic smartphones, Xiaomi definitely wants to take a large part of it.
The third quarter of 2020 saw the only positive growth in mobile phone shipments. Tens of billions of additional funds were issued before the year, and new phones were released at the end of the year. The market value once reached nearly HK$900 billion. Xiaomi is preparing for the new year. hair.
However, a "blacklist" seemed to dampen Xiaomi's enthusiasm. On January 14, Xiaomi was included in the U.S. government's "blacklist" of Chinese companies that prohibit U.S. investors from investing, and its stock price immediately fell sharply.
Xiaomi is suing the U.S. Department of Defense and Treasury this time in the hope that the ban will be lifted. Because if the ban is implemented, American investors will not be able to invest in Xiaomi and related companies or buy stocks of these companies, and will be required to sell their shares in "blacklisted" companies before November 11 this year.
Although this ban is different from the previous "Entity List" ban on Huawei that prohibited the purchase of key components, there are currently many American institutions among Xiaomi's shareholders. Among the top ten common stock holders of Xiaomi, there are three well-known American investment institutions: BlackRock Inc., Vanguard Group Inc., and State Street Corp.
If these institutions withdraw from Xiaomi’s shareholders in the near future as required by the ban, it will obviously have a certain impact on Xiaomi’s product operations and investment operations. This is obviously the main purpose of the US ban - to restrict domestic companies. development.
In 2020, Xiaomi’s Hubei Xiaomi Yangtze River Industry Fund invested in many projects, especially in the semiconductor field, including radio frequency chips, display chips, etc. In January this year alone, Xiaomi invested in chip design company Tianyi Hexin and AI chip developer Jingshi Intelligent.
At the same time, as the supplier of Xiaomi's key chips, Qualcomm is also a shareholder of Xiaomi. It invested in Xiaomi as early as 2011, shortly after its establishment.
It is precisely because of this relationship that Xiaomi and Qualcomm have always cooperated very closely. Xiaomi can get the first launch of almost every generation of Qualcomm’s latest chips. Xiaomi Mi 11 is equipped with the Snapdragon 888 chip. That's it.
Although the current ban only restricts US companies from investing in Xiaomi, it is obvious that they will still face the risk of a ban on the procurement of raw materials and components in the future.
At present, as its own chip research and development has not yet achieved significant results, Xiaomi relies more on American companies than Huawei in the field of key components. American components account for more than 50% of the cost of Xiaomi 10 released in early 2020, including core components such as SoC chips and 5G baseband chips.
Although Xiaomi will not be significantly affected in the short term, in the long term, it still faces the risk of component supply cuts.
The impact of component supply cuts is huge, as can be seen from Huawei's recent sharp decline in shipments.
In the third quarter of 2020, Huawei’s global smartphone shipments fell by 22%, but it still ranked second. But in the fourth quarter, the impact of chip supply cuts became more apparent.
According to data from market research organization Canalys, in Q4 2020, Huawei’s global smartphone shipments fell 42% year-on-year, ranking sixth after Apple, Samsung, Xiaomi, OPPO, and vivo. Being included in the "Others" category, this is the first time in the past six years that Huawei has fallen out of the top five.
After Huawei officially sold Honor, it was recently reported that it would sell all its terminal businesses, including the P series and Mate series, to a consortium led by the Shanghai government.
Although Huawei later denied that it would not sell its mobile phone business, just like Honor's previous denial, the fate of Huawei's mobile phone business may also be worrying when the chip shortage is difficult to solve in a short time.
At the same time as the news broke, a new round of appointments within Huawei also aroused speculation.
On January 27, Huawei issued an internal document to make personnel adjustments. Yu Chengdong was additionally appointed President (concurrently) of Cloud&AI BG, Director of the Cloud&AI BG Administrative Management Team, President (concurrently) of Cloud BU, and Director of the Cloud BU Administrative Management Team. .
Cloud&AI BG is Huawei's cloud computing business department. It was upgraded from a second-level department to a first-level department in early 2020, running in parallel with Huawei's Carrier BG, Enterprise BG, and Consumer BG.
This time Yu Chengdong, who is in charge of the Consumer BG, has been added as President of the Cloud & AI BG. Huawei is obviously going to develop its already growing cloud computing business, but at the same time it also seems to prove that smartphone-based consumption or the bleakness of the terminal business.
In addition to cloud computing, there is also the automotive business. In the past year, Huawei has launched a self-developed lidar, established a joint venture brand with car companies, applied for automotive technology patents, and entered the automotive industry in a big way. On February 1, Huawei also signed a cooperation agreement with the Wuhan Economic Development Zone government to establish an intelligent connected automobile industry innovation center.
Various actions seem to indicate that it is only a matter of time before Huawei fully sells its terminal business.
But judging from its investment in 2020, Huawei seems unwilling to easily give up its consumer business that has been in operation for many years. In 2020, Hubble, a subsidiary of Huawei, invested in many companies such as EDA software, optical chips, and memory chips.
In November last year, the British Financial Times also reported that Huawei was planning to build its own chip factory in Shanghai to deal with TSMC's inability to produce chips for it due to the US ban. It is reported that it plans to start manufacturing low-end chips with 45 nanometers, and then continue to iterate to 28 nanometers and 20 nanometers.
From this perspective, despite the sharp decline in the terminal business, Huawei's other business advancements are more like maintaining corporate development in the short term, slowly accumulating technology behind it, and seeking to break the ice in the future.
While Huawei is in serious decline and Xiaomi is at risk of being blacklisted, Apple has risen to the top of the list because of its sales of new phones.
According to Canalys data, in the fourth quarter of 2020, Apple iPhone shipments hit a record high, reaching 81.8 million units, a year-on-year increase of 4%, ranking first before Samsung, Xiaomi, OPPO, and vivo. .
The popularity of the new iPhone 12 is the main reason for it to reach the top. In the third quarter of 2020, Apple also ranked fourth in shipments due to delayed releases of new phones. However, after the 5G version of iPhone 12 was released in October, the demand for replacement is still strong.
The growth in mobile phone sales has also allowed Apple’s single-quarter revenue to exceed US$100 billion for the first time, reaching US$111.44 billion. Among them, iPhone product revenue reached US$65.597 billion, accounting for 58.86% of Apple’s overall revenue.
The Chinese market is the main force behind Apple’s sales growth. According to IDC data, Apple sold 18 million iPhone 12 units in Greater China this quarter, with revenue reaching US$21.313 billion, a year-on-year increase of 57%, accounting for nearly one-fifth, setting a new high.
Obviously, Apple has taken a lot of Huawei's vacant share, but it seems not easy for Apple to continue to reap the benefits.
Judging from the full-year shipments in 2020, Samsung still occupies the dominant position with a market share of 20%, and Apple ranks second.
Based on Apple’s popularity in the Chinese market, Samsung, which has been away for many years, also wants to come back. On January 15, Samsung released the S21 series of new phones. The starting price of 4,999 has dropped significantly compared to before, and various coupons are also increasing.
Obviously, Samsung wants to re-use the Chinese market to maintain its global dominance.
Not only Samsung has taken action, OPPO has also recently adjusted its strategy to respond to the changing market. A few days ago, OPPO’s super flagship store in Shanghai Huashi Plaza officially closed and began to focus on online sales.
Honor, which left Huawei, also resumed cooperation with MediaTek and released the new V40. However, the slightly backward configuration does not seem to be recognized by more users.
In 2021, the smartphone market structure in China and even the world will obviously see more changes compared to 2020. Apple will definitely use its product performance and brand influence to win the top spot throughout the year; Samsung is trying its best to return to the Chinese market in order to consolidate its global dominance; Huawei has no solution for the time being, and the post-split Honor will be under great pressure to fight alone; Xiaomi has a short-term The internal impact will not be too great, but the risk of long-term component supply shortages also needs to be considered.
New changes have come, but in the final analysis, only by having core technology can you not be influenced by others. Of course, Apple is not just sitting back and reaping the benefits. It is well-known in the industry for its self-developed chips and strong ecosystem. If domestic companies want to be truly competitive, they can only work hard in core technology areas.
The market is changing, and only by mastering the core can we cope with the changes by remaining unchanged.