Original title: XIAOMI: connecting everything is the correct way to open 5G Source: read Finance and Economics
XIAOMI held a press conference on 5G new products on September 24th. At the press conference, XIAOMI released two 5G mobile phones, "XIAOMI 9Pro5G version" and "XIAOMI MIXAlpha5G version". The former focuses on the overall improvement of performance, battery life and charging, emphasizing the ultimate experience in the 5G era. The latter represents XIAOMI's brand-new exploration of the future form of mobile phones.
In addition, XIAOMI also announced the new MIUI11 system and the new XIAOMI TV at the press conference.
The release of 5G mobile phones can also be regarded as XIAOMI's "trial knife" in the 5G era. But we are more concerned about XIAOMI's 5G layout behind the phone than the phone itself. Because the latter will really decide that XIAOMI can go far in the 5G era.
Looking back at history, every upgrade of communication technology will bring about a reshuffle in the mobile phone industry. 5G should be no exception. This is a good opportunity for XIAOMI.
You know, XIAOMI is best at popularizing cutting-edge technology from 0 to 1 in an emerging market. This has always been the case, from smartphones in the past to smart TVs and smart speakers.
On the other hand, with the improvement of communication quality and the decline of cost in the 5G era, the consumer-grade Internet of things market will burst. XIAOMI's advance layout in the IoT market will help it gain a first-mover advantage.
As of June 30, 2019, XIAOMI IoT platform connected devices (excluding notebooks and computers) more than 196 million, is the world's largest intelligent hardware IoT platform.
In the long run, it is entirely possible for XIAOMI to master a large number of core scenes and users through the matrix of intelligent hardware products, so as to further open the ceiling of Internet cash.
/ 01/
In the 5G era, XIAOMI is ready
Throughout XIAOMI's entire press conference, there is only one core theme, "5G".
Reviewing the layout of XIAOMI in the past few years, it is no exaggeration to say that XIAOMI is ready for the advent of the 5G era. In other words, XIAOMI is likely to rise again in the 5G era for three reasons.
First, clearer product positioning and organizational change. In the past quite a long time, XIAOMI's relatively chaotic brand positioning has been criticized. In the past few years, what XIAOMI has done is to adjust the product line.
At the low end of the market, the sub-brand Hongmi is independent and operated by Lu Weibing, president of Jin Liyuan. XIAOMI brand focuses on the middle and high-end market. The clarity of brand positioning helps XIAOMI form a clearer product structure.
Internally, in order to cope with the more fierce competition in the 5G era, XIAOMI also carried out two organizational changes in 2018.
Especially in the first organizational structure adjustment, XIAOMI separated the strategic layer from the tactical management layer for the first time. Specifically, strategic business is the responsibility of the partner. As for the business with a clear direction, the "recruits" of the post-80s generation are basically used.
The advantage of this is, on the one hand, to complete the organizational replacement of younger management. On the other hand, it also reserves and examines talents for more fierce competition in the future.
In other words, in order to cope with the arrival of 5G, XIAOMI has made adjustments from the front-end organization to the back-end play.
Second, XIAOMI's cost-effective approach makes it easy to gain a first-mover advantage in emerging markets.
From 2G to 3G has brought about screen innovation and mobile interaction innovation, the birth of smartphones as an emerging market. In the 5G era, this opportunity also exists.
In an emerging market, XIAOMI is best at popularizing cutting-edge technology to the public. This has always been the case, from smartphones in the past to smart TVs and smart speakers.
We can also see the application of this concept on XIAOMI's 5G mobile phone. For example, XIAOMI 9Pro5G version of the mobile phone, the application of the world's first 30w wireless flash charging technology, 100 megapixel technology, the latest processor, linear motor 4D game tactile technology and other emerging technologies.
And XIAOMI 9Pro5G version of the minimum price of 3699 yuan, often more than 4000 yuan in the 5G mobile phone industry, is really not high.
The third is XIAOMI's strong R & D capability.
In fact, from the beginning of his business, XIAOMI attached great importance to technology. To some extent, the early XIAOMI was a research and development team. The founder team all have a technical background, and the top 100 employees are almost all technicians.
In nine years, XIAOMI has grown from a small team to 23, 000 employees. Technical career has always been the most important thing in XIAOMI's blood.
Over the past three years, XIAOMI has continued to increase investment in technological research and development, totaling 11.1 billion yuan, and 5.8 billion in 2018 alone.
In the research on 5G, XIAOMI even had a layout.
As early as in 2018, XIAOMI set up a 5G pre-research team to carry out comprehensive and in-depth research on 5G standards ahead of schedule; in early 2017, XIAOMI officially launched the design of 5G mobile phones; in September 2018, XIAOMI took the lead in opening the signaling and data link connections of 5G, laying the foundation for 5G commercial use; in December 2018, XIAOMI Group unveiled its first 5G mobile phone, XIAOMI MIX35G, at the China Mobile Limited Partnership Conference in 2018.
To some extent, today's XIAOMI MIXAlpha is the embodiment of XIAOMI's 5G R & D capability.
/ 02/
Two opportunities for XIAOMI's Mobile phone in the 5G era
As a super hardware, the pattern of the mobile phone industry has undergone earth-shaking changes in the past decade. Behind the ups and downs of mobile phone enterprises, the upgrading of communication information brings changes in the form of interaction and user habits, which leads to design changes in the terminal field and reshuffle the industry.
Review the changes in the mobile phone industry in the past communications technology upgrades:
Nokia peaked in 2G, lost 1x3 in 3G, and disappeared in the 4G world. Motorola lost 4/5 of its global mobile market share in the transition from 2G to 3G (2012). Samsung seized the opportunity to move to 3G, doubling its share and becoming a global leader. Chinese manufacturers broke into the global 4G stage, XIAOMI stood out and became the fourth largest mobile phone manufacturer in the world.
In the 5G era, XIAOMI also has the opportunity to go further. In the view of reading, there are two main opportunities for XIAOMI.
The first is the reshuffle of the mobile phone market.
From the vertical comparison of the time dimension, looking back at the history, every upgrade of the communication system will become the biggest driving force for the development of the terminal industry.
On December 4, 2013, the Ministry of Industry and Information Technology officially issued 4G licenses to the three major operators, and the replacement trend followed in the following two years. The proportion of 4G mobile phones increased sharply, accounting for more than 70% at the end of 2014 and more than 90% at the end of 2015.
Compared with the increase in 3G and 4G users after the issuance of licenses, the penetration rate of 4G users exceeded 65% in three years, while the penetration rate of 3G users was less than 35% at the end of 2013. The 5G experience will be a qualitative leap, even more so. Judging from this, after the entry year of 2019, the best part of the first wave of 5G replacement will appear in 2020.
According to IDC, the global penetration rate of 5G mobile phones will be about 15% in 2020. In the future, the penetration of 5G mobile phones will accelerate, and the market will enter a dividend period. In 2020, 5G mobile phone shipments will exceed 200 million units, and the next two or three years will accelerate to 300 million to 400 million annual shipments. The CAGR of 5G mobile phones shipped from 2019 to 2023 can reach 29.77%.
Not surprisingly, with the advent of the 5G era, the mobile phone industry will usher in the biggest wave of replacement in the past few years. In this process, who can take the lead in developing products that adapt to user interaction in the new era will determine who can take the lead in the 5G era.
From this point of view, XIAOMI's innovation in the form of screen and mobile interaction on the latest mobile phone MIXAlpha is a good attempt.
Second, XIAOMI can take advantage of the new replacement trend to establish its brand in the high-end market. The high-end products will also bring higher gross profit margin for XIAOMI.
At that time, the penetration of smartphones was from the high end of the market to the low end of the market, and 5G phones will also go through this process. Judging from the prices announced by various mobile phone manufacturers, the price of 5G mobile phones is generally more than 3000 yuan.
This means that if XIAOMI can take the lead in the 5G era, he will directly gain a foothold in the high-end market, completely get rid of the past "low price" market awareness, and then improve the product gross profit margin.
/ 03/
When AIoT meets the 5G era, the real consumer Internet of things is about to break out.
Unlike other mobile phone manufacturers, XIAOMI has another opportunity in the 5G era, the explosion of the consumer-grade Internet of things market.
Many people's impression of 5G is still faster. But the increase in the speed of 5G is only the least important part of its technological progress. To some extent, the two most intuitive experience upgrades that 5G brings to the market are the improvement of connection quality and the reduction of connection cost.
The direct impact of improved connection quality and lower connection costs is that more and more hardware can be connected to the Internet, such as televisions, watches or cars.
In other words, 5G has evolved the mobile network from a mobile phone-centric network to an adaptive full-dimensional network, coupled with its unprecedented technical indicators, so that all hardware devices can become Internet access in the future.
This will bring two opportunities, the outbreak of consumer smart hardware demand and the emergence of smart hardware derivative services market.
First of all, according to iResearch, global sales of consumer-grade IoT hardware (smart home, wearable devices) will reach $1.55 trillion in 2022, equivalent to 10 trillion yuan, which is only the case in the next four years.
XIAOMI, as the absolute leader in the domestic IoT hardware field, will become the biggest beneficiary. In 2018, XIAOMI's income from IoT and consumer goods was 43.8 billion yuan, an increase of 86.9 percent over the same period last year. Global shipments of smart TVs were 8.4 million, an increase of 225.5% over the same period last year. Mijia floor sweeping robotShipments of China's second, XIAOMI wearable equipment Q4 shipments of the world's second.
At the same time, considering that the underlying agreements of various manufacturers have not yet been opened, it will affect the user experience to a certain extent. Under this premise, the value of XIAOMI's relatively perfect intelligent hardware product matrix is reflected.
Coupled with XIAOMI's mature ecological chain system, there is a set of tested methodology such as "culture, brand, capital, ID design, supply chain, management", which is also conducive to the rapid expansion of categories when necessary.
What makes XIAOMI more imaginative than smart hardware sales is the ecological value of the IoT platform. You know, the changes in user behavior in the IoT era are likely to lead to the emergence of the corresponding service market.
As of June 30, 2019, XIAOMI IoT platform connected devices (excluding notebooks and computers) more than 196 million, is the world's largest intelligent hardware IoT platform.
Among them, the number of users with more than five devices connected to XIAOMI's IoT platform (excluding mobile phones and laptops) increased to about 300 million, an increase of 78.7 percent over the same period last year. As of June 2019, Xiao Ai had 49.9 million monthly active users and shipped more than 4 million smart speakers.
XIAOMI's IoT open platform can greatly improve the speed of its development. Alphabet Inc-CL C's Android has become the strongest mobile operating system because it is open, while UBER TECHNOLOGIES INC (UBER) has become the largest shared travel platform in China because it is open. XIAOMI, who is the fastest in the field of IoT, is expected to become an industry giant by virtue of the network effect.
For XIAOMI, the value of the network effect is that it can get all kinds of data through the massive devices on the IoT platform and the connection of the scenes between the devices. These data have the characteristics of full ecology and diversity, and will become the source of the continuous improvement of XIAOMI's AI technology.
On the other hand, the powerful AI technology in turn transforms the scene, customer acquisition and user experience of IoT, so that XIAOMI platform can better serve customers.
In the long run, through smart hardware to achieve the mastery of the core scene and users, XIAOMI has the opportunity to thoroughly open the ceiling of Internet cash.
You know, in any emerging market, scenarios and users are the most valuable resources. The most typical example is that Tencent connected 110 million active users more than a decade ago. At that time, no one could have imagined that the game would be realized in the future, let alone that it would become one of the two strongest Internet companies in China.
The history of the development of the Internet in the past 20 years has proved that the development of things will change much more than people can imagine. The IoT layout of the past few years has given XIAOMI the opportunity to stand at the juncture of this era and open his own second half.