PhoneAuto Mid-Year Observation Roll up the camera and roll up the memory How should mobile phone manufacturers break through?

How can phone manufacturers break through with camera and memory upgrades during the PhoneAuto Mid-Year Observation?

【PhoneAuto】Time flies. The first half of 2023 is coming to an end soon. Regardless of whether time passes quickly or slowly, and regardless of whether we pay attention to it or not, profound changes have taken place in numerous industries in the first half of the year. Moreover, compared with the past few years, the situation this year is more special. This kind of change is particularly obvious in the fields of the Internet and technology, which deserves our careful review.

Overall, in the first half of 2023, various industries began to shake off the impact of the epidemic in the past few years. The vast majority of industries have achieved recovery and returned to the track of growth. Of course, the road is tortuous. Even if the epidemic is no longer present, they will face new challenges. At the same time, the presence of Chinese companies in many industries has rapidly increased, gradually playing a more important role.

Looking specifically, in the mobile phone industry, long-term market depression has intensified competition among manufacturers. The just-concluded 618 promotion has pushed this competition to a climax. In the automotive industry, China continues to maintain its leading position in new energy, but the industry pattern is quietly changing. In the smart wearable industry, Apple, Huawei, and Xiaomi are making moves, and the industry may usher in a new round of changes. In the laptop industry, a “cold winter” was experienced in the first half of the year, but according to the prediction of Lenovo’s chairman, this may be the “last darkness before dawn.” In the assembly industry, both old players and new players are making their own calculations, and it is gratifying that Chinese manufacturers are rising.

Overall, PhoneAuto has launched a series of special topics called “PhoneAuto Mid-Year Observation” focusing on the development of various industries in the first half of 2023. It will review the changes in fields such as technology and automobiles this year, and we will also look forward to their development trends in the second half of the year. This article focuses on “How Should Phone Manufacturers Break Through with Camera and Memory.”

To be honest, the hype around smartphone cameras has been going on for a while now. Manufacturers of high-end flagship phones frequently use imaging as a selling point and make various horizontal comparisons. However, in the past year or two, the promotion of smartphone camera features has failed to boost sales, and the entire industry is not very optimistic about the market. Manufacturers have made it a routine to lower their shipment volume.

According to data from the China Academy of Information and Communications Technology, the domestic smartphone shipment volume decreased 23.1% year-on-year last year. According to a report by the International Data Corporation (IDC), the shipment volume of the domestic smartphone market in the first quarter of this year decreased by 11.8% year-on-year.

For smartphone manufacturers, there is always something to promote. Therefore, they all started to promote mid-range phones with large amounts of memory, and tasted the sweetness of success. However, this promotion method is not a long-term solution, and domestic smartphone manufacturers need to make breakthroughs and achieve high-end development.

Memory is related to the durability of phones to a certain extent, but it does not determine the lifespan of phones, as there are too many factors that affect the lifespan of phones. However, the phone’s memory does affect the smoothness of its operation, and the storage capacity determines the number of apps that can be installed and the amount of photos, data, and videos that can be saved. You may have heard older relatives complain about their phones being too slow and needing to be replaced immediately.

It is evident that what really affects consumers’ desire to replace their phones is not the lifespan of the product, but the user experience.

In response to this demand, smartphone manufacturers have started promoting large memory in mid-range phones, which is seen as a new growth point. In PhoneAuto’s opinion, phones with large memory are part of improving the user experience, rather than just an opportunity for manufacturers.

It is precisely because phones are still “holding up” that young people’s desire to replace their phones has greatly decreased. Counterpoint Research predicts that the smartphone replacement cycle this year will be as long as 43 months, reaching the highest level in history. The smartphone replacement cycle will gradually shorten next year, but it will still exceed 40 months. Not replacing a phone for 40 months is like someone who hasn’t eaten or drunk anything for a few days. Smartphone manufacturers cannot wait and must find other ways to attract customers.

Heroes are indispensable in any era, and for the mobile phone industry, there is currently a lack of such a hero. Foldable screen phones may be such a role.

Consumers have only two reasons for not having the motivation to change their phones: either their current phone is still “good enough”, or there is no need to upgrade due to the lack of innovation in new phones. However, foldable screen phones are different. Currently, manufacturers are still exploring new ways to use this technology, and the foldable screen phone market has not yet reached saturation, leaving ample room for competition.

In terms of price, making foldable screen phones is actually a way to make high-end products. Interestingly, the price of foldable screen phones is constantly decreasing. For consumers, cheaper foldable screens are more attractive and can create stronger purchasing desires. Before the 618 shopping festival, the release of the Moto Razr 40 was just right, with a starting price of 3,999 yuan, which caught many people’s attention. With this product, Lenovo has the strength and opportunity to overtake competitors in the foldable screen phone market.

In recent years, it has become common for the mobile phone industry to have few surprises. Foldable phones are one of the few innovations.

Some users on Weibo have expressed that they feel that the leaks about some new phones are very ordinary. They even suspect that the technology tree has been locked by a proton landing, and the last time they were impressed was with OPPO’s rolling screen three years ago.

In my opinion, this criticism actually speaks to the key to further development in the smart phone industry, which is innovation. At the very least, the design should be eye-catching and different from previous models, and many of the top manufacturers are putting in a lot of effort in this regard.

The iPhone 14 Pro series’ Dynamic Island has been criticized, but they are indeed trying to create differentiation. You laugh at Apple for not being innovative, but Apple laughs at you for not seeing through. The sales and reputation of the two models of the iPhone 14 Pro series have always been good, and they ranked first and second in the JD.com mobile phone sprint rankings during the 618 festival this year. Their performance during last year’s Double Eleven was also very strong.

Another example is the Huawei P60 Art artistic design, which uses a design language similar to that of an island. This is a very bold innovation. It is said that Yu Chengdong once wanted the entire Huawei P60 series to use this design, but for the sake of caution, they still mainly use conventional designs.

In addition to high-end products, the mid-to-low-end markets must also be taken seriously. At this stage, manufacturers are focusing on improving the user experience of mid-range phones, while the low-end market has long been ignored. Indeed, low-end phones do not make much profit, but they can at least stabilize the base.

Are low-end phones really “weak”? However, JD.com’s data shows that during the entire 618 period, the cumulative sales ranking of single-product smartphones was led by the iPhone 14 Pro, iPhone 14 Pro Max, and the Redmi 10A, which is just a low-end phone that costs only a few hundred yuan.

In fact, consumers have a higher demand for low-end phones than imagined. Counterpoint’s statistics show that in the first quarter of this year, the domestic smartphone market’s sales volume fell by 5% year-on-year, but the entry-level sub-segment market (wholesale price below $150) increased by 22% year-on-year.

Many low-end phones have low prices but poor quality, resulting in low user satisfaction. Mobile phone manufacturers can strengthen product research and development and quality control, improve the overall quality level of low-end phones, and launch more personalized thousand-yuan phones or customized models. In this regard, Xiao Du seized the opportunity. In May of this year, Xiao Du Qinghe Learning Phone V20 was released, positioning itself as a youth learning phone, and there are few products with the same positioning in the market.

Mobile phone manufacturers have successfully popularized large-memory smartphones in the mid-range smartphone market. With the further decrease in memory prices, thousand-yuan phones with super-large memory may also come onto the market. This may also be a new growth point.

Regarding the way out for mobile phone manufacturers, external suggestions abound. Some say that mobile phone manufacturers need to find their own positioning and focus on being “small and beautiful.” However, “small and beautiful” should be the positioning of individual products, not the brand positioning. In the smartphone industry, “small and beautiful” is destined to be difficult to break through. Are there not many examples of this? The distinctive Smartisan Nut and the former female-oriented phones were both eliminated.

For mobile phone manufacturers, consumer demand is not readily available, but rather created. Mobile phone manufacturers should strive to create such demand for consumers, which in plain terms means innovation. Without innovation, how can you expect people to pay for it? Innovation does not necessarily refer to technology, but can also be the integration of existing resources.

Although the shipment and sales volume in the domestic mobile phone market in the first half of the year compared to the same period last year have declined, the decline has significantly narrowed, indicating that the downward trend is approaching the bottom. The mobile phone industry is expected to rebound in the second half of this year. Of course, this is all based on fierce competition. PhoneAuto predicts that due to the decline in memory material prices, large-memory smartphones will still maintain an internal circulation trend in the second half of the year, but the continuous price reduction of foldable screen phones undoubtedly has more potential. According to multiple sources, Huawei, Honor, and other mobile phone manufacturers will launch foldable screen phones with a price range of 4,000-5,000 yuan, which undoubtedly will be a bombshell and will ignite the foldable screen market.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

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