If the difficulty of some things in the world is divided into one level, then making smartphones in China should be at least a five-star "difficult" level. Countless brands have disappeared or declined in the waves of the past few years, and the remaining ones may not be better. It is no longer the thriving market that year.
If there's anything harder than making a smartphone in China, it's making a high-end smartphone in China.
▲ In the second quarter of 2022, the market share of high-end price segment mobile phones has increased significantly year-on-year. From Counterpoint
Before 2022, we can say that vivo is successful in making mobile phones ; but in 2022, we can change our words and say that vivo is also successful in making high-end mobile phones .
The success of high-end products depends on the price, the strength of the product, and the most important thing is of course whether the user will pay.
Thanks to the release of the vivo X80 series, in the second quarter of 2022, vivo's share of the domestic high-end market above 3,500 yuan reached 13%, ranking second only to Apple, which is a 1% increase from the 6% share in the second quarter of 2021. More than double.
▲ China's high-end smartphone market share in the second quarter of 2022. From Counterpoint
At the same time, in the higher-end segment ($600 to $799), vivo product shipments increased by 504% year-on-year. In the second quarter of 2022, the average sales price of vivo's high-end products reached 6,170 yuan, which also hit a new high (according to Counterpoint data).
In the most recent third quarter of 2022, vivo continued to top the domestic market in terms of shipments, gaining a 20% market share. Among them, the sub-brand iQOO performed well, gaining a 4.6% domestic market share in the quarter. As a latecomer to the folding screen market, vivo X Fold is considered a dark horse, helping vivo gain a 17.6% share in the folding screen market, ranking third in the market segment.
▲ China's quarterly mobile phone market tracking statistics. From IDC
It can be said that by 2022, the smartphone market will no longer allow a trace of speculation and luck, and successful market results must be determined by successful business strategies. At the end of 2022, shortly after the release of the vivo X90 series, Hu Baishan, executive vice president and chief operating officer of vivo, accepted an interview with the media and revealed to everyone how vivo accomplishes the extremely difficult task of making high-end products.
It is true that vivo has succeeded in making high-end products this year. It is our judgment as a third party. Inside vivo, there are actually other opinions.
Hu Baishan, executive vice president and chief operating officer of vivo, described this as saying that 2022 is the year when vivo's confidence in high-end breakthroughs is established .
▲ Hu Baishan, executive vice president and chief operating officer of vivo
There is an old saying that has been repeatedly mentioned in the past two years: confidence is more important than gold.
Therefore, it seems that "2022 is the year when vivo's high-end breakthrough confidence is established" does not directly describe success, but it actually has a more profound impact on vivo's subsequent actions. For a large company or an entrepreneur, how much money they earn at the moment and how much market share they have gained are often not the most important and inspiring. Whether the company can have a clear and correct strategy, firm and efficient execution, whether it can go through cycles, and whether it can establish a foundation Evergreen is a more important thing.
Faith itself goes through cycles. So, how did vivo build this confidence that is more important and rare than gold?
The confidence to go through the cycle comes from long-term persistence, trial and error and positive feedback.
During the bubble period of various industries, we have seen too many "inflated expectations" and "mysterious confidence", and then experienced big waves washing the sand and receding waves, and naked swimmers appeared.
Regarding the high-end business, in Hu Baishan’s view, vivo has been insisting on it:
We have been insisting on doing high-end. I remember clearly that this year marks the tenth anniversary of the X series. The price of the X1 on November 20, 2012 was 2,498 yuan. This time, the starting price of our X90 series has reached 3,699 yuan, and the top configuration has reached 6,999 yuan. The price of each generation of X It is constantly going up.
We also tried Xplay at that time. I remember that we released the first generation of Xplay in May 2013, followed by Xplay3, Xplay5, and Xplay6. At that time, X wanted to play a small screen, and Xplay wanted to play a large screen with better performance. Later, we found that there was a problem with this road, so we quit Xplay and started to work on NEX. We worked on the first generation NEX and the second generation NEX, and later found that the direction of NEX was also problematic. Whether it is Xplay or NEX, they are doing things on a short track, not long-term. Now for bar PCs, we only stick to the X digital series, with video and OS as the two most critical starting points. Of course, the appearance design also retains the original leading edge, and this aspect is always moving forward.
Just like the prophecy about eating steamed buns, it doesn’t mean that the first three steamed buns are meaningless. There is a process of trial and error and sublation. To be a high-end mobile phone brand, you will be educated by the market in the end, and then you will realize that high-end is a process of accumulating a lot.
In long-distance running, there is a state node called "exercise limit point, referred to as pole", which refers to the fact that runners will feel short of breath, heart rate increases, and limbs are weak during the middle and early stages of long-distance running, so that they do not want to continue running. , once you persist in this "extreme point", you will enter a stable period where your steps are brisk and your rhythm is under control.
In a marathon, there may even be multiple such "poles". Therefore, for vivo, which is currently on a long track, they may have passed through such a "pole" and came to the right rhythm.
▲ vivo X90 Pro+
Two keywords for vivo to be high-end: "strategic control point" and "leading strategy"
In fact, vivo's persistence and trial and error on the high end have some intertextual relationship with the 2022 vivo developer conference held not long ago, which is mainly reflected in their long-term pursuit. If the technical route and product route are not long-term, Then you should find a long-term replacement.
For example, on the APEX 2020 concept machine, there are many technical concepts that represent the future: under-screen camera, 120° full-view integrated screen, micro-head & full-focus coverage, 60W wireless fast charging…
In the end, the result we see is that on the X series, vivo retains the camera function and fast charging function that are strongly related to the experience, while abandoning the technical concept that is strongly related to the form.
No matter how big an enterprise is, its resources are limited, and it is an inevitable choice to do something or not.
Our perspective can be a little closer. In the recent generations of the X series, what vivo has done and what it has not done. Huber Hill said:
We can think of a SoC as consisting of two parts. Part of it is the public architecture. Every year, ARM releases the latest general-purpose CPU architecture. Like other open ecosystems, including Android-based games and applications, these are all open ecosystems. There is also a closed-loop ecology. Imaging is a typical closed-loop ecology. There are dedicated ISP processors, dedicated APUs, dedicated imaging algorithms and chips. You don’t need too many people to participate, and you can do a good job of the entire ecology.
In this closed-loop ecosystem, it doesn’t make any difference whether we make SoC or not. In the future, if we invest about 200 people, we will be able to better connect various industrial chains, including ARM, Qualcomm, MediaTek, etc.
However, the dedicated part is a field that tests the capabilities of each company and requires a large investment of resources. We have invested more than 1,000 people in optical imaging. The entire OS team now has more than 3,000 people, covering professional teams such as artificial intelligence and underlying algorithm transformation, which brings the fluency of use.
For the public part, we invest less; but for the part dedicated to vivo, we invest more to focus resources better.
▲ Hu Baishan at the vivo media communication meeting
From a macro perspective, it means that vivo does not make platform-level SoC chips, and does not do open ecological layout; but it can make co-processor chips (currently related to imaging), and it can do bottom-level modification and optimization of the system that is closely related to daily use. .
Focusing on the just released X90 series and its OriginOS 3 system, we can see where vivo puts its investment.
The imaging capability of mobile phones, fundamentally speaking, is that the light reaches the image sensor (CMOS) through the lens, and the light information becomes electronic information, and then the electronic information is processed and restored by chips such as the image information processor (ISP), and presented on the screen.
If you want to enhance the imaging capabilities of mobile phones, you need to strengthen the capabilities of this entire link and pave the road wide and smooth.
So what did vivo do with the X90 series of images?
The T* coating in cooperation with Zeiss can effectively reduce stray light and ghost images; the Abbe number of the customized ultra-high-transparency glass lens is as high as 81.6 (the Abbe number is used to measure the degree of light dispersion of transparent media, the higher the value, the lower the dispersion); The 1-inch IMX989 image sensor has a larger photosensitive area; optical image stabilization ensures stable optical path imaging; the self-developed V2 chip has been reconstructed and upgraded, with faster image processing, stronger AI computing power, and greater data throughput…
Compared with the vivo flagship three years ago, vivo has almost reconstructed the entire imaging architecture, and has carried out all-round upgrades on the coating, lens, image sensor, image module and processing unit in the entire link.
Inside vivo, there is a term called "strategic control point". Hu Baishan explained it this way:
Our way of doing things, to put it bluntly, where we want to build an advantage, we invest a lot of resources.
Perhaps the analogy of marching and fighting is more appropriate. The "strategic control point" is a battleground for military strategists in vivo's cognition. How to obtain this place, you can have millions of troops by yourself, or you can work together to occupy it with your partners. For example, vivo's cooperation with Zeiss and Sony on video is like this.
The above is vivo's "leading strategy" to seize the "strategic control point". As mentioned earlier, resources are limited and troops are precious, so vivo also has an "alignment strategy". In this strategy, Hu Baishan also gave an example:
For the display screen, we adopt an alignment strategy, because our control is weak in the display screen, which mainly depends on Samsung and BOE, their ability to continue to invest, and their personnel are much more than ours. Of course, we will do traction in this, for example, users have requirements for eye protection, to reduce some blue light, and for example, the sun is very strong today, can the brightness be made higher, etc. But to what extent? In fact, we have no control, we are more waiting for this technology to mature.
In fact, this year's two generations of X80 and X90 series products, not only has vivo adhered to the main line of products and designs since the X50 series, but also implemented the two strategies mentioned above by Hu Baishan more deeply.
▲ vivo X80 series
As for the result, Hu Baishan did not use market data to confirm it, but looked at it from the perspective of consumer choice. He believes that it is precisely the persistence and accumulation of the "leading strategy". After ten years of evolution, the gap between vivo's flagship machine and Apple's products has narrowed, and some parts can even overtake, such as night scenes and portrait shooting, which will attract people. corresponding consumer groups. Even Apple's safest moat-system, vivo is also determined to invest heavily and catch up; including the time difference in the field of folding screens, these longer long boards and unobvious short boards can help vivo have the confidence to go Compete with the best players in the industry in the high-end market.
On the long track, vivo sees farther than before
The current vivo has a total of four long tracks: design, image, system and performance; among them, design and system are the basic requirements of the product, and the image and performance are respectively focused on the vivo X series and iQOO digital series. presented.
"Leading strategy" and "alignment strategy" can be regarded as a kind of allocation of resources in space. In terms of time dimension, vivo also faces the choice of resource allocation.
The long-termism of many manufacturers always gives people the feeling of "paying lip service but not delivering". Most of the manufacturers choose short-term strategies due to the current operating pressure.
Here, vivo, as a company, can provide a sample of transition from currentism to long-termism in operation. Huber Hill said:
The mobile phone industry was a high-growth industry in the early years. Many needs of users were not met, so we rushed to catch and apply technologies that were easy to meet. This process was the same from 2012 to 2018.
But for the current vivo, there are fewer and fewer technologies that can be used immediately, and the technical threshold is getting higher and higher.
In the early stage of smartphones, the product progress route was very simple: CPU single-core changed to dual-core, dual-core changed to quad-core; the screen went from 320P to 480P to 720P and 1080P; the memory went from 256MB to the current 16GB and even 24GB; The game has long been unsustainable, the competition dimension of smartphones has become more subdivided, and the numbers are no longer confusing: a 100-megapixel camera may not be better than a 50-megapixel camera; 1080P and 2K screens often have their own advantages and disadvantages.
Vivo and Hu Baishan thought about this huge question lying in front of Android mobile phone manufacturers:
In the OS field, the Android camp used to use hardware to stack, but there is always an upper limit to stacking hardware, and the cost of stacking is getting higher and higher. After stacking 16GB, is it necessary to stack 24GB next? This is problematic.
During the heap process, the larger the data, the larger the calculation, and it consumes power to run. The greater the power consumption, the hotter the machine. This contradiction has already begun to arise, so why do we invest heavily in the bottom layer of the OS? It is because in the past in the entire Android camp, the bottom layer was not well sorted out. In the past road repairs, you will find that the more curved the road is, the wider the road needs to be built.
Therefore, the "unfair scheduling" and "in-place resurrection" mechanisms in OriginOS 3 have been developed to solve the problem of increasingly large system applications and insufficient mobile phone memory.
In fact, this is a typical question of whether to treat the symptoms or the root cause. Palliative treatment is the current approach, which is enough to add a little more memory this year than last year, while the root cause is long-term approach, which is solved from the bottom of the system, benefiting now and benefiting in the future.
This kind of behavior with a higher level of cognition, longer consideration of the future, and greater investment is becoming more and more common within vivo.
Hu Baishan compared vivo’s investment model in the time dimension to a pyramid. The lower the bottom of the pyramid, the closer it is to the present. Generally speaking, the more manpower is invested; The manpower input is also less.
Basically, the more human beings focus on the present, the shorter the pyramid and the less predictable the future will be. Taking the image field as an example, vivo is building up the pyramid. Hu Baishan said:
From the perspective of the video track, in the past, 70%-80% of the work (personnel) worked within a year, but now only 50%-60% of the work (personnel) within a year, so my future goal is within a short period of time The most important thing (personnel allocation) will become 40%-50%. With the total number of people unchanged, the short-term personnel will be gradually reduced. To put it bluntly, half of the people do short-term things, and the other half do long-term things.
In the end, vivo and Hu Baishan hope that after this kind of migration of talents and resources to the top of the tower, every track in the future can be laid out to a five-year dimension.
Now, vivo has begun to do this systematically, and the most typical action is the establishment of the vivo Central Research Institute.
Vivo has a production-research gradient relationship of "production generation, reserve generation, and research and development generation", which means that in 2022, the X90 series has already been produced, and the technology of the next-generation X100 (hypothetical name) has been reserved and can be put on the production line. Technology for the next-generation X110 is already being developed in various departments.
Then the main work of the central research institute of vivo is to consider the technologies of the 4th and 5th generations on the basis of the 3 generations of "production generation, reserve generation, and research and development generation".
Hu Baishan further explained the thinking logic behind this:
Our resource investment in the upper layer of the pyramid for more than three years and five years is much larger than in the past. I also think that only if we continue to invest in this area, our related capabilities will continue to iterate.
Capacity building is like this. (Step 1) First, you need to know, for example, which direction you think the industry should develop in the future; (Step 2) After knowing, it depends on whether you have the ability to do it; (Third step) how well did it perform?
The core of this is, do I want to do this thing well? For vivo, our understanding of users and the building of industry capabilities are constantly increasing. It may be that my cognition is at the middle level, and my ability is at the lower level. After my ability rises, my cognition will rise to a higher level, and my ability will in turn drive the improvement of cognition, which is a continuous spiral iron triangle cycle. I believe that as long as the capabilities of each of our core enterprises and leading enterprises in major industries are gradually built, the comprehensive capabilities of our country will be strengthened.
For the media participating in the interview, this conversation is more like everyone is taking the "fruit" that vivo has achieved good results in the high-end market in 2022, and going to seek the "cause" from Hu Baishan, the executive vice president and chief operating officer of vivo.
But conversely, for business operations, what we think of as "fruit" is not the "fruit" that the company ultimately pursues. If the goal is to be high-end, high-end for the sake of high-end is likely to form a kind of absurdity.
If the goal is customer satisfaction, long-term success, or even a higher-level pursuit, then high-end success is a signpost on this road, and companies will pass by sooner or later.
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