The article seems to be discussing the upcoming June 18th shopping festival in China and how various mobile phone manufacturers are preparing for it The author also mentions several major industry trends that readers should be aware of

The article talks about China's June 18 shopping festival and mobile phone manufacturers' preparations for it, along with major industry trends to keep in mind

【PhoneAuto】There are two major online shopping festivals in China: Mid-Year 618 and End-Year Double 11, which are the two timepoints with the greatest discounts in the first and second half of the year respectively. As we enter the end of May, the annual Mid-Year 618 sales event has officially begun.

Compared to previous years, this year’s 618 will be the largest ever. Taking Taobao and Tmall as an example, the number of participating merchants and products in Tmall 618 this year has hit a new high, with an estimated 60 million products participating in discounts and 1.45 million participating merchants. Officials have also emphasized, “This year’s Taobao and Tmall 618 is the most heavily invested in history, and is expected to be the 618 with the greatest benefits for consumers in history.” JD.com is also not to be outdone and plans to hold “the largest industry-wide investment in 618.”

Battle again in 618: Mobile phone manufacturers are getting ready. Do you understand these major industry trends?

PhoneAuto believes that for consumers, these large-scale shopping festivals are not only a test of financial strength, but also a test of mental strength, with various shopping subsidies, deposits, and discounts making it quite overwhelming. So, what are the play methods and strategies worth paying attention to on major platforms this year?

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For “shopaholics,” facing such a major mid-year promotion like 618 can be really exciting. Among the many categories, electronic products have become the focus of consumers’ attention, especially smartphones, televisions, and the like. 618 can be said to be the last hope for electronic product manufacturers in the first half of the year, all hoping to seize the opportunity of the mid-year promotion and boost sales. How will these increasingly “rolled-up” manufacturers perform during 618?

For this year’s 618 mid-year promotion, PhoneAuto has launched a “618 Redux” special topic, in which we will focus on observing the e-commerce and mobile phone industries. The topic of this article is “What are the mobile phone industry trends reflected in 618?”

Since JD.com officially kicked off the 618 promotion at 20:00 on May 23, major mobile phone brands have also released their own 618 discount buying guides. In addition to new machines released in the first half of this year, manufacturers such as iQOO and Xiaomi have also released new machines during 618. PhoneAuto has discovered the following trends from the actions of various mobile phone manufacturers during this year’s 618, which are likely to continue into the second half of this year and become the focus of new machine releases and sales by mobile phone manufacturers.

I wonder if friends who follow the mobile phone industry have noticed that after entering 2023, large-memory and high-capacity mobile phones began to appear on a large scale. The first to launch this strategy was OnePlus, which received a “billion-yuan subsidy” from its parent company. Both the flagship OnePlus 11 and the mid-range flagship OnePlus Ace 2 use a starting version of 12GB+256GB, and even on the later-priced lower OnePlus Ace 2V, OnePlus also uses 12GB+256GB as the starting version and has received good reviews in the market.

OnePlus Ace 2

Subsequently, major competitors began to follow this strategy. Whether it was Redmi, Realme, or iQOO, which recently released a new machine, 12GB+256GB seems to have become the standard configuration. In addition to the starting configuration, ultra-large capacities like 1TB have also begun to appear on many mobile phones. Redmi K60, Realme GT Neo5 (150W version), and OnePlus Ace 2V also released the top version of 16GB+1TB during this 618 pre-sale period. It should be noted that such configurations used to only appear on top-level flagship machines, but now, you can get this storage specification for less than 3000 yuan.

Redmi k60 16GB+1TB version

Why is the mobile phone industry “crazy” about large-capacity phones? The main reason is the recent collapse of the entire memory and storage market. Due to the rise of domestic particle manufacturers represented by Yangtze Memory Technologies, the price of NAND flash memory has been falling. Former industry giants such as Samsung and SK Hynix have also had to lower their prices. Industry insiders previously revealed that the price of NAND flash memory has fallen below the cash cost of suppliers, which is accelerating the promotion of 1TB as the standard specification for flagship phones. Although storage prices are gradually recovering, the era of large storage in the entire mobile phone industry is likely to continue in the second half of this year.

During the 618 promotion period, both iQOO and Xiaomi brought their new iQOO Neo8 series and Xiaomi Civi 3, and from the price point of view, both are mainly positioned in the mid-range. From the new products released by various manufacturers in the recent period, it can also be seen that the price range of 2000-3000 yuan is still the most competitive range.

iQOO Neo8 series

The main reason why the mid-range market is fiercely competitive is that the demand for the entire mobile phone market has declined. For ordinary people, the replacement cycle of mobile phones has become longer, and the corresponding budget for purchasing phones has also been reduced. Therefore, mid-range phones have become the choice of more people. Faced with the industry’s tightening period, major manufacturers must also pay attention to this market.

On the other hand, the mobile phone industry has also affected the mobile phone supply chain. Due to the reduction in downstream shipments, the current supply chain prices are at a low point. Manufacturers can also “downgrade” some of the technologies and configurations used for high-end products while reducing costs. Another factor is that when there is no obvious improvement in technology, manufacturers can only increase the attractiveness of mid-to-low-end products by “downgrading” technology.

The vivo V1+ chip equipped in the iQOO Neo8 series

For example, OPPO has also placed its collaboration with Hasselblad in the imaging field on some OnePlus phones. And Xiaomi has also partially provided many imaging patents and algorithms previously developed to its Redmi models. Vivo has also put the V1+ chip that was previously only used in the X series flagship onto the new iQOO machine, which is a manifestation of the increasingly fierce competition in the terminal market. And this “flagship technology mid-range” behavior will also appear on more mid-range models in the second half of the year.

Prior research by Counterpoint found that in the global smartphone market in 2022, Apple is still dominant, accounting for 85% of the global smartphone market’s profits. Although in terms of sales, manufacturers such as Xiaomi, OPPO, and vivo rank high, and domestic smartphone manufacturers account for about 60% of the global market share, their profits are still far less than Apple’s.

However, even with low profits, in the current stock market of China’s smartphone industry, manufacturers are still very competitive. In the mid-range smartphone market, where the price war is most evident, Redmi Note 12 Turbo, OnePlus Ace 2V, and realme GT Neo5 SE are all fiercely competing. At Redmi’s launch event, it repeatedly targeted OnePlus Ace 2V and Ace 2, and then the realme GT Neo5 SE also targeted Redmi.

Redmi K60 has a maximum discount of 500 yuan

In particular, the Redmi Note 12 Turbo and realme GT Neo5 SE, both in terms of configuration and price, are very similar, clearly trying to grab users from each other with lower prices. Although the price war may reduce the profit margin for manufacturers, for consumers, being able to buy a new machine with balanced configuration and large capacity for less than 3,000 yuan is indeed an attractive proposition.

Realme GT Neo5 SE

Although some analysis agencies predict that the mobile phone industry may usher in a recovery in the second half of 2023, there are also voices pointing out that from the current global economic environment, the recovery of the mobile phone industry may be slower than we expected. If the industry still cannot achieve significant growth, the challenges facing mobile phone manufacturers in the second half of the year will still be very severe. For those manufacturers who need to maintain revenue and profit through sales volume, price wars may still be an inevitable path.

During the 618 promotion, the mobile phone industry seems very lively on the surface, and some manufacturers have also advertised “the largest discounts in history”. However, from a series of actions and the development trend of the industry in the first half of the year, the various discounts and promotions of the manufacturers during the 618 promotion also reflect some development trends and changes in the mobile phone industry in the next six months.

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