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written by zhou tao

editor: wan tiannan

at 1 a.m. beijing time on september 10, apple held a new product launch conference and officially released four models of the iphone 16 series, with prices starting at 5,999 yuan.

however, the much-anticipated apple intelligence feature is being released at a discount - it will be launched in batches and implemented in stages.

on the same day, huawei chose to confront head-on, and the world's first "tri-fold" flagship - huawei mate xt extraordinary master was officially unveiled, with a starting price of 19,999 yuan.

after the press conference, the number of reservations on huawei's official mall exceeded 4 million - in the high-end market, domestic manufacturers can finally compete with apple.

compared with huawei's rapid progress in the high-end mobile phone market in recent years, apple has been slightly weak in the chinese market recently: according to data released by the analysis agency canalys, in the second quarter of 2024, apple's market share in the chinese smartphone market was 14%, which has fallen to sixth place and fallen to "others" in the statistical chart. the top five market shares are occupied by vivo, oppo, honor, huawei, and xiaomi.

although domestic manufacturers have won in terms of shipments, apple's position as the king in the high-end market remains solid. in the second quarter of 2024, china's high-end smartphone market, apple's market share still topped the list at 52%, despite a year-on-year decrease of 7%.

how does apple maintain its position in the high-end market?

on september 11, "financial stories" checked the official stores of various mobile phone manufacturers and found that apple has 11 models on sale, with the lowest price being 3,499 yuan. however, the number of models sold by major domestic manufacturers is relatively large, covering low, medium and high-end price segments.

compared with apple, the strategy of domestic manufacturers to launch a large number of models to achieve full coverage from low-end entry-level products to high-end products is called the sea of ​​​​machines strategy.

however, when the mobile phone market shifts from incremental growth to stock, it is time to reflect on the strategy of flooding the market with products.

one

sea of ​​machines tactics, a must in the early stage

from the "china cool alliance" ten years ago to the "huami ov" today, manufacturers have spared no effort to promote new phones through combinations of different configurations and functions.

the strategy of launching a large number of new products has become popular in the domestic mobile phone market and reached its peak in 2016.

the china academy of information and communications technology's monthly domestic mobile phone market operation analysis report shows that in 2016, there were 1,446 new models launched in the chinese smartphone market, with an average of nearly 4 new models released every day. in comparison, in 2023, there were only 441 new models launched in the chinese smartphone market.

"everyone is working hard to add configurations and functions, as if whoever can launch the product the fastest will win." coolpad vice president cao jingsheng recalled to tencent technology in 2014.

it can be said that the strategy of launching a large number of mobile phones was almost a necessary option for manufacturers in the early days when they were trying to seize the market. the abundant supply also pushed china to become the largest mobile phone country.

idc data shows that in 2023, china's smartphone market shipments will reach 271 million units, and global smartphone shipments will reach 1.17 billion units. china's market share will be 23%, making it the world's largest market. at the same time, in the second quarter of 2024, china's smartphone shipments in the price range of less than us$200, us$200-400, us$400-600, and above us$600 will have market shares of 28%, 36%, 10%, and 26%, respectively.

china's huge smartphone consumer group means that the number of users in each price range is not small. faced with such a diverse market, manufacturers use the strategy of launching a large number of models covering low, medium and high-end price ranges to better reach all kinds of consumers and occupy more market share.

according to the 2024 china smartphone user survey data released by iimedia research, chinese consumers pay considerable attention to the running memory, storage capacity, battery life, charging speed, etc. when purchasing smartphones. manufacturers have launched a variety of models with different configurations and functions to accurately target a specific user group and meet the individual needs of consumers: such as gaming performance, photography functions, battery life, and thin body, thereby tapping into the market potential.

figure 4

financial stories found in the offline vivo official experience store that the price ranges of vivo s19 pro and its sub-brand iqoo neo9s pro+ are almost the same. the former is priced at 2,999 yuan to 3,799 yuan, and the latter is priced at 2,899 yuan to 3,999 yuan. in response, a vivo staff member explained: "the vivo s19 pro features a 50-megapixel front-mounted selfie camera, a dual 50-megapixel rear main camera, and an ultra-thin curved screen body. it is very suitable for female users. the iqoo model has powerful performance and is very suitable for playing games. young people like it very much."

in response to the author's question about whether there is a "niche demand" for a small-screen flagship phone, the staff replied: "you can wait for the release of x200 in october. this time it will compete with iphone 16."

the strategy of launching a large number of new products is also a marketing method: in the fierce competition in the domestic smartphone market, frequent press conferences and a large number of new products can help manufacturers maintain market attention. each new product can attract a wave of attention and sales.

looking back at the history of china's smartphone development, in order to seize market share, the strategy of launching a large number of products can be said to be a common strategy of other manufacturers except apple.

however, as the mobile phone market shifts to stock, "high-endization" has become a common option. is the strategy of flooding the market with products still effective?

two

high-end transformation, but the sea of ​​machines is not working

today, the mobile phone market is no longer an incremental market.

idc data shows that china's smartphone shipments will be 271 million units in 2023, a year-on-year decrease of 5.0% from 2022, the lowest record in ten years, and only 58.3% of the peak shipment volume in 2016.

at the same time, consumers' replacement cycles are lengthening. according to a report by market research firm techinsights, the replacement cycle of global smartphone users will reach 51 months in 2023, the longest in history.

at the same time, the high-end market is growing.

according to the price segment trend data of china's smartphone market in 2023 released by idc, the market share of high-end smartphones priced above us$600 will reach 27.4%, a year-on-year increase of 3.7 percentage points. while high-end consumers maintain their purchasing power, more mid-range users are starting to upgrade to flagship products.

in this context, the right approach for manufacturers is to focus on high-end products and use higher prices to offset low sales.

the widespread use of the strategy of flooding the market with products will undoubtedly hinder the brand's transformation towards high-end development.

under the strategy of launching a large number of products, frequent product updates and the collision and intersection between product lines make it almost inevitable that products will become homogeneous. the emergence of a large number of mid- and low-end models also makes it difficult for consumers to focus on high-end products, and the brand positioning is unclear.

a staff member of an official samsung authorized experience store told caijing story: "samsung is currently focusing on high-end products. customers who come to the store will basically only learn about samsung's high-end products. we have mid- and low-end product lines, but we don't recommend them. we even recommend that customers choose domestic brands when buying mid- and low-end products."

the strategy of flooding the market with products will also have a negative impact on focusing on product strength and technological innovation.

under the background of the strategy of launching a large number of products, manufacturers have to disperse their resources to multiple product lines. they have to invest twice as much energy in a series of processes from design and development, procurement and supply chain management, production line assembly to after-sales service, making it difficult to guarantee product quality and user experience.

in 2023, realme founder li bingzhong said in an exclusive interview with 36kr about the strategy of launching a large number of new products: "there are many new products, which may be incremental in the short term and may be helpful for early brand building and brand voice. but in the long run, i think it will be difficult to succeed. another strategy we have now is to be more focused and use resources more intensively."

some users also joked that mobile phone manufacturers' "technology is based on changing the shell" and "all of them are nesting doll phones", which essentially expressed their dissatisfaction with the strategy of launching a large number of mobile phones.

offline dealers also have something to say about the strategy of flooding the market with products.

"having more product skus does mean covering more consumers, but it makes it more difficult for us to control inventory and takes up a lot of money. from an after-sales perspective, the material skus that need to be prepared for after-sales service are several times more than those of mobile phones. once there is a problem with the phone, unless it is a recent popular model, it basically cannot be repaired on the spot and needs to be returned to the factory. this after-sales experience is very poor," an oppo offline dealer told "financial story collection".

at the same time, the above-mentioned dealers also mentioned that in addition to increasing inventory risks, the strategy of flooding the market with products often means that manufacturers will provide a large number of low-end and mid-range skus, which will result in smaller profit margins: "only when manufacturers provide more high-end products can dealers have greater profit margins."

it can be said that the strategy of launching a large number of mobile phones by mobile phone manufacturers may bring about an increase in market share and sales in the short term, but from a long-term perspective, especially from the perspective of high-end branding, the strategy of launching a large number of mobile phones is not a panacea.

looking at the global market, brands that have truly completed the high-end transformation ultimately do not rely on the strategy of flooding the market with products.

three

from "sea of ​​machines" to "high-end", manufacturers have different fates

moving towards the mid-to-high-end has become the common choice of chinese mobile phone manufacturers.

canalys data shows that in the second quarter of 2024, xiaomi's market share in china's high-end market increased by 50%, ranking third with a market share of 4%. although there is a huge gap compared with apple and huawei, the high-end transformation is already evident.

at present, although xiaomi’s official website has more than 40 models on sale, according to statistics from "financial story collection", as of september 10, xiaomi has only released 7 models in 2024.

in comparison, the number of models released by other manufacturers in the same period were: vivo (including iqoo) 25 models, honor 16 models, huawei 16 models, oppo (including oneplus) 15 models, and apple 4 models.

among the 7 models released by xiaomi this year, excluding the redmi brand, there are only 4 xiaomi brand models. among them, the xiaomi civi4 pro, which focuses on the female market, is relatively cheap, starting at 2,799 yuan, while the other three products are priced at 5,999 yuan and above.

it can be seen that xiaomi’s reflection on the strategy of flooding the market with products is very thorough.

however, xiaomi also faces challenges in the process of moving towards high-end products.

as we all know, xiaomi phones have always been known for their cost-effectiveness, and are even known as "diaosi phones."

how to meet diversified demands while taking into account the high-end brand? xiaomi’s answer is: establish sub-brands.

in 2019, xiaomi announced that the redmi brand was officially independent. lei jun explained this at the meeting: the xiaomi brand will focus on the high-end market, aiming to provide users with the ultimate experience; while redmi will continue to insist on the ultimate cost-effectiveness.

"financial story collection" found out in xiaomi mall that among the 14 models currently on sale by the xiaomi brand, except for the three products in the xiaomi civi series in the 2,000 yuan price range, the remaining 11 products are priced between 3,999 and 19,999 yuan, and the price range below 3,999 has been handed over to redmi.

at the same time, streamlining the product line and focusing on making a few high-quality products is another major strategy for xiaomi's high-end transformation.

as early as 2018, lei jun said in an interview with yang lan: "only if you do less can you have the opportunity to do better than others." "we are fighting greed every day."

in 2019, lei jun announced on his personal weibo that xiaomi had initially sorted out its product line and determined that xiaomi brand mobile phones would be divided into three series: xiaomi mix, xiaomi digital, and xiaomi civi. the xiaomi note series and xiaomi max series products were cut off. in february 2020, lei jun officially proposed high-end development at the xiaomi 10 launch conference.

in the more than four years since the high-end route was proposed, xiaomi has focused on several key models, which has indeed brought about an improvement in product strength and created several popular models:

xiaomi mi 13 and xiaomi mi 14 seized the pain point that there are almost no small-screen flagship phones in the android camp, focusing on “small and beautiful” as the core selling point;

xiaomi mi 14 ultra focuses on imaging and launched a photography kit with an external photography handle, which is favored by photography enthusiasts;

the newly launched xiaomi mix flip not only has outstanding appearance, but also comes with a polaroid set bundled with the mijia photo printer, which has attracted a large number of female users.

of course, there are obstacles on xiaomi's road to high-end.

for xiaomi, which is more dependent on the supply chain and chip manufacturers, the boutique strategy means betting on only a few products. once the core products that it has worked hard to build fail, there will be no other products to withstand the downward pressure.

xiaomi 11, the annual flagship released by xiaomi at the end of 2020, suffered a ruined reputation due to severe overheating of its core cpu snapdragon 888 and a bunch of bugs in the miui 12 system.

in this regard, lei jun recalled in his 2023 annual speech: "xiaomi 11 suffered a huge setback. we held our breath and spent a lot of effort to make xiaomi 12, but it still did not meet expectations. no one thought that it would be so difficult to make high-end products, and the investment was so huge. frustration spread throughout the company."

to this day, in this part of lei jun’s 2023 annual speech video on xiaomi’s official b station account, you can still see comments like this: "fire dragon 888 is fatal."

however, the "sea of ​​​​machines strategy" and "high-endization" are not completely mutually exclusive, and the two are in a phased substitution relationship.

"rome was not built in a day." even huawei, in the early days of its mobile phone business, used the strategy of flooding the market with mobile phones to cover a wider market and consumer groups. after years of continuous technological accumulation, huawei gradually implemented a high-end strategy, launched high-end flagship phones, and established its current brand and technology image.

domestic manufacturers will not always be content with cost-effectiveness and the low-end and mid-range products, and are hoping to break through from the "sea of ​​machines" to the high-end.