2024-07-26
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In the fifth annual speech with the theme of "Courage", Lei Jun personally revealed the history of Xiaomi's car manufacturing, but it was ultimately overshadowed by One more thing.
A large number of bold Arabic numerals and advanced technical solutions without any attributives constitute the overall appearance of the Xiaomi SU7 Ultra prototype car so far. Lei Jun's words "I can't afford this car either" added a touch of humor to the entire press conference.
Xiaomi SU7 Ultra prototype
Considering that the SU7 Ultra prototype is armed to the teeth with a large number of radical technical solutions, it is destined not to be a mass-produced product, but its design ideas and technical processes are bound to be applied to mass-produced models. Xiaomi's last product with similar attributes was the "surround screen mobile phone" MIX Alpha released in 2019.
Xiaomi Mi MIX Alpha
At that time, because the surround screen design of MIX Alpha was too attractive, the public did not pay much attention to many advanced components, such as nano silicon batteries, titanium alloy frames, etc. Its significance to Xiaomi is similar to that of the SU7 Ultra prototype, that is, the symbol and spirit presented by a technology company to the outside world.
The shot of Jobs taking out a MacBook Air from a document bag is still the most memorable moment in Apple's history. Sony's Walkman and Toshiba's Dynabook also captured the golden age of Japan's electronics industry with many stunning moments. These clips, which abstracted countless papers, patents and sweat, are always talked about repeatedly in the future.
In 1972, Toshiba released the portable Dynabook
This is also the significance of the SU7 Ultra prototype car. It attempts to use a series of radical parameters and specifications to remind the outside world what kind of company Xiaomi is.
In 2016, the British edition of Wired published a powerful article, "It's Time To Copy China". The title was a bit scary, but the article was actually full of substance. Reporter David Rowan interviewed Lei Jun and many Xiaomi executives, and perhaps for the first time, he deeply popularized the "Xiaomi model" to overseas readers.
The Wired article did not describe Xiaomi's mobile phone business in detail, but focused onXiaomi EcosystemandXiaomi Communitysuperior.
To this day, there are still many voices that interpret the "Internet thinking" represented by Xiaomi as fan culture and the Weibo accounts of company executives, but the most typical reference for the "Xiaomi model" is actually the Xiaomi ecological chain - using mobile phones as a template for success, investing without controlling shares, providing methodology and product concepts to ecological chain companies, and expanding with the help of Xiaomi's traffic.
Xiaomi's ecological chain was once summarized as "explosive product thinking", but it is more like Xiaomi using the design and sales ideas of mobile phones, standardized production and quality control to transform the segmented business formats.
From power banks and batteries to balance bikes and sweeping robots, the role of Xiaomi's ecological chain is to build an unwritten quality control standard for these industries. The most typical example is white goods such as air conditioners. Xiaomi has grown rapidly in a highly concentrated market through direct sales channels and more reasonable pricing.
Xiaomi's first generation mobile power bank
Xiaomi Community is the product of a series of reviews and summaries after Lei Jun left Kingsoft, and is also an important part of the "Xiaomi Model". Lei Jun once wrote a manuscript about Internet thinking, the core content of which is "treating users as friends".
Lei Jun’s statement on Internet thinking ten years ago is still being studied repeatedly by many of his peers. One executive after another walks into the live broadcast room silently reciting the "Seven-Word Secret of the Internet".
The Internet is the gene for Xiaomi's birth, but it is not the whole of Xiaomi's growth.
In 2020, Xiaomi conducted a six-month internal "intensive reflection" on its ten years of entrepreneurship, and much of the content was made public for the first time in "Xiaomi Entrepreneurship Thinking" published in 2022. However, careful Mi fans may find that at the end of July 2021, the company profile on Xiaomi's official website was changed from "Internet company" to "consumer electronics and smart manufacturing company."
The label of Xiaomi’s first decade was “Internet”, which represented “focus, extreme, reputation, and speed”; after 2020, this label became “hard-core technology”, which is clearly written in Xiaomi’s goals for the new decade: to invest heavily in underlying core technologies and strive to become the world’s new generation hard-core technology leader.
In the following years, Xiaomi's ideas for reshaping the "Xiaomi model" gradually became clearer with the iteration of its product lines.
First, the coverage and control of a series of underlying technologies:From ISP imaging chips, power management chips to large models and operating systems, Xiaomi began to systematically explore core technology links and established a mature R&D system in the process, rather than blindly carrying out technology investment without considering business attributes and user needs.
The birth of Surge OS was due to Xiaomi's need for a unified software architecture to connect mobile phones, cars and IoT products and serve cross-terminal user experience. When the "magic MIUI + connection protocol" was not up to the task, Xiaomi had to start self-development.
Second, deeper participation in the supply chain:Xiaomi Auto's V6s motor, the high-power battery pack on the SU7 Ultra prototype, and the Jinshajiang battery with silicon-carbon negative electrode all come from collaboration with supply chain companies such as CATL and United Automotive Electronics.
Supply chain integration is the core capability of consumer electronics companies and the most difficult part of Apple to imitate. Apple has single-handedly promoted the popularization of CNC integrated molding and FPC soft boards, but today, the driving force behind innovations in folding screens and lens modules is being replaced by Chinese companies.
Third, technology accumulation moves from products to production:In February this year, the Xiaomi Smart Factory for Mobile Phones in Changping, Beijing was completed and put into production, with the factory software system self-developed at a rate of 100%. A month later, the Xiaomi Automobile Factory was unveiled, with the key processes in the body shop being 100% automated, and the overall automation rate of the entire factory at 91%. Beyond products, Xiaomi is changing the face of the manufacturing industry.
The "Lei comparison" at the press conference is often talked about, but the undercurrents in the upstream of the industrial chain are little known, because most people underestimate the difficulty and complexity involved.
Although "Xiaomi Entrepreneurship Thinking", published in 2022, has public relations and communication considerations, it also contains Lei Jun's true feelings. In the book, Lei Jun once summarized the development of Xiaomi's technology system into three stages:Integrated technological innovation-autonomous technological innovation-core disruptive technological innovation.
Thirteen years ago, Xiaomi’s first mobile phone was a model of “integrated technological innovation”. Xiaomi made a splash by using top-notch components and was once labeled as an “assembly plant”, but this was actually a misunderstanding.
Most industrial products are indeed "assembled", and the essence of aircraft manufacturing is also assembly, but the "system integration" of selecting, coordinating and managing hundreds of thousands of parts is precisely the top manufacturing capability. In the words of Boeing Vice President Caroline Covey: "If it were easy to assemble an airplane by buying parts, there would be more than just Boeing and Airbus in the world."
But compared to labeling based on literal meaning, the division of labor and collaboration in the industry is the most complex issue in the manufacturing industry. Even though Lei Jun has been writing on Weibo, he rarely touches on this topic. But in "Xiaomi Entrepreneurship Thinking", Lei Jun used Samsung and Apple as examples to make a systematic explanation:
Samsung can produce almost all the components in a mobile phone, but these "bottleneck" capabilities have not brought it absolute market dominance. On the contrary, Apple only occupies the chip design link of the three core parts of the mobile phone (panel, lens, processor), but takes away most of the profits.
Consumers do not buy copies of patent certificates, but products for daily use. Therefore, the core of R&D is to define the value created by the product and realize it technically. Whether a certain component is 100% self-produced does not hinder the technical realization of the product.
Apple does not have any wafer fabs, lens module factories, or panel production lines, but it can still create top-notch electronic products. The most difficult part for Apple to replicate is defining product value and achieving it through strong control over the supply chain. Lei Jun calls it "control and traction" over the supply chain.
For example, the iPhone was not the first touch-screen phone, but Apple defined the interaction logic based on the "touch screen" usage scenario and then completed the technical implementation with suppliers.
At the launch of the first generation iPhone in 2007, the bosses of panel manufacturer TPK, Jiang Chaorui and Sun Daming, burst into tears in the audience - for this touch screen, TPK and Apple jointly developed it for two years and burned through NT$1.2 billion.
Another misunderstanding about "self-development" is to emphasize the originality of product prototypes and design solutions. However, in the industrial context, achieving mass production with controllable yield and cost is the real challenge.
Designing a Toyota Corolla is not difficult, but organizing factories around the world, coordinating hundreds of suppliers, spreading costs through mass production, and allowing production capacity to cover annual sales of 1 million vehicles are the most core and complex issues in the manufacturing industry.
This is also why Musk said: The brainpower required to design a car is nothing compared to the brainpower required to design a factory.
The 2016 Xiaomi Mi MIX uses a special ceramic that needs to be fired at a high temperature of 1500°C. If there is an error in temperature control during trial production, 5,000 pieces of ceramic will be scrapped at once. In this process, how to adjust the material ratio and how to optimize the production line and process require Xiaomi and its suppliers to repeatedly try and make mistakes.
The same is true for the "keel hinge" first used on MIX Fold 3. After a long period of trial production and trial and error, Xiaomi and its suppliers have achieved large-scale standardized production of this extremely high-precision component, making the unfolded phone nearly 10% thinner than the mainstream products at the time.
Unfortunately, public discussion on "self-research" is often limited to the originality of very individual components, and has evolved into a debate filled with emotions and slogans.
Technology is hidden in a large number of manufacturing and process details, which are the wisdom and sweat in countless production links, but are often ignored.
Xiaomi's first generation keel hinge changed the common water drop structure
After 2020, Xiaomi's R&D strategy is to first define product value and then achieve technical realization through in-depth collaboration with the supply chain. In this process, Xiaomi has completed the application of many technical solutions such as silicon-carbon negative electrode batteries and low-power OLED panels.
This may not be a heart-wrenching story, but "self-developed" products that cannot be transformed into added value are like locking the brilliance of diamonds in a safe, which is no different from scrap metal. With the close cooperation between the two sides, a large number of supply chain companies have benefited from it, and many high value-added links have remained in China.
MIX Alpha used a very radical silicon-carbon negative electrode battery at the time.
After the "centralized reflection" in 2020, the biggest change for Xiaomi is that it has gradually demonstrated its control and traction over the supply chain, and has begun to go deep into the most simple but core link of the manufacturing industry - the factory, just like Tesla. Carrying these changes are the keel shaft 2.0 of the MIX Fold 4, the 1900kg weight of the SU7 Ultra prototype, and the V8s motor that is climbing the mass production stage.
Labeling the sweat of countless engineers as an "assembly plant" is a disservice to the industry.
Japanese scholar Yukio Noguchi once recalled his trip to the United States in the 1980s, when Japan's economy was the second largest in the world. Professor Ezra Vogel's "Japan as Number One" was popular all over the United States, and the whole country was in a trend of learning from Panasonic for home appliances, Toyota for cars, and Toshiba for chips. "Made in America", written by several MIT professors, has also triggered collective reflection in the American industry.
The book, with the theme of "Why American Manufacturing is Declining", takes Apple as a representative of Silicon Valley companies and makes a comprehensive comparison with Sony. It highly praises the management methods of Japanese companies and prescribes a prescription for Apple based on this: Apple should learn from Sony.
In 2018, the book "Postwar Japanese Economic History" was published. In the book, Yukio Noguchi lamented: "Looking at Apple and Japanese electronics companies now, it really makes people feel that the world has changed dramatically."
In the 1960s, Roy Arma, a computer scientist at Stanford University, proposed a law of innovation: people always overestimate the short-term benefits of new technologies and underestimate their long-term impacts. In the high-tech industry, although people like to talk about long-termism, they often underestimate the long-term accumulation of technology and R&D of enterprises, and are keen to criticize short-term defects.
The electronics and manufacturing industries in East Asia have a strikingly similar development trajectory: starting from taking over industrial transfer, guiding industrial upgrading through industrial policies, and ultimately establishing global influence.
It’s just that the history condensed in books is heart-warming to read, and the ridicule and denial that the participants need to dispel are often ignored.
"Shodgy" was once synonymous with Japanese manufacturing. Samsung, now a powerful company, also had a history of being strictly guarded by the Japanese. In the 1980s, Samsung sent employees to walk around Japanese factories, hoping to measure the area of the factories by footsteps. Later, Samsung bombarded Japanese company executives with sugar-coated bullets, and Toshiba Semiconductor Department Minister Nishi Tsukawa couldn't stand it and became the key guide, taking Samsung executives on a tour of the factory.
The context of "industrial upgrading" lies not only in the breakthrough of high-tech core links, but also in the overall transfer of high value-added links. China's consumer electronics and automobile industries once lived at the bottom of the added value of manufacturing.
In 2016, Wired quoted Lei Jun's speech in an article: Xiaomi will become a company like Sony and Samsung, and within ten years, China will lead the world in all fields.
In the past decade, Xiaomi has changed many market segments, from air conditioners to power banks. During the IPO roadshow, the audience gave applause to the Xiaomi Rainbow Battery, which costs 9.9 yuan. According to Canalys, in the second quarter of this year, Xiaomi ranked among the top three in the global smartphone market for 16 consecutive quarters with a market share of 15%, only 3% away from the first place.
In the era of mobile Internet, Xiaomi has used the most advanced technical solutions to enable countless people to access the Internet at low cost and enjoy the fruits of China's increasingly mature supply chain. During this period, there was no shortage of ridicules such as "advising Lei Jun to stop." But today, Xiaomi is defining new technologies and experiences and exploring ways to achieve them.
This change exists not only in Xiaomi, but also in all segments of the manufacturing industry. As China's home appliances, electronic products and electric vehicles expand into the global market, China's Walkman, Dynabook and Corolla are also being nurtured.
Faced with the terrifying technological gap, the despair that the industry needs to face is often unimaginable to ordinary people. The road is not over yet, and the pioneers are still in the fields. In any case, we should show more tolerance and patience to the participants who make progress.
As Lei Jun said in his speech: As long as we start catching up, we are on the way to winning.
References
[1]Xiaomi's $45bn formula for success (and no, it's not 'copy Apple')，Wired
[2] Thoughts on Xiaomi’s Entrepreneurship, Lei Jun/Xu Jieyun
Author: Li Motian
Editor: Zhang Zeyi
Visual design: Shu Rui
Editor-in-charge: Li Motian
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