Life is not easy, where is the future for terminal manufacturers in the 5G era?

From the 1G analog communication era to the 4G mobile broadband era, the number of mobile terminal manufacturers worldwide has reached a peak, and has gradually fallen to a low point in recent years. The glory and demise of mobile terminal manufacturers objectively reflects the changes in communication history.

In the 5G era, from "people connected" to "things connected", mobile terminal manufacturers will be further concentrated, and the world's attention will gradually shift from the top 10 to the top 5. Many manufacturers have become victims in this historical change. The once well-known mobile phone brands and models have become a thing of the past, including Nokia and Motorola, which each occupied half of the communications world in the GSM era. Such giants still cannot escape the impact of technological iteration.

In a world of communication terminals with corpses floating everywhere, all major terminal manufacturers are facing the same soul-searching question: Life is not easy, where is the future of terminal manufacturers in the 5G era?

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The Birth of the Overlord

In 1980, the big guy called "mobile phone" was just a "communication tool for the nobility". At that time, there was only one manufacturer that could produce this "brick-sized" mobile phone, which was Motorola, which was once prosperous but now almost extinct.

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In 1983, Motorola Dyna TAC 8000X was launched. This mobile phone was the product of Motorola's ten-year hard work, and in a sense, it was an important symbol that changed the history of world communications. At that time, Motorola invested more than $100 million in research and development and spent ten years to create a super phone that could "charge for 10 hours and talk for 30 minutes." At that time, the price of this phone was $3,995, and it was once sold for about 50,000 yuan on the domestic black market.

The "mobile phone" that Motorola truly entered the Chinese market with was the Motorola 3200, and its domestic selling price at the time was more than 30,000 yuan. Compared with the current thousand-yuan phones and the currently higher-priced Huawei 5G folding screen phone Mate X (European market price: 2,299 euros, Chinese selling price: rumored to be around 15,000 yuan), I'm afraid only terminal manufacturers know the taste of it.

In the early 1990s, GSM in Europe began to gain momentum, and China began to build GSM in 1995. Although many people were discouraged at the beginning due to the expensive terminals and telecommunications charges, what happened later made this matter appear "unexpected". One important reason why it was unexpected was that most people at that time did not think that this kind of "noble communication" could go smoothly in China.

At that time, most authoritative domestic institutions predicted that by the year 2000, the number of mobile users would reach 100 million.

However, this was not a good thing for Motorola, which almost dominated the world at that time.

Collective autism

The story of Motorola is definitely a microcosm of the history of mobile phone development. The subsequent story after "terminal intelligence" is not only about Motorola, but also includes the "copycat heyday" in the 3G era. It is a heroic and tearful history.

In the GSM era, Nokia emerged from nowhere in Finland, Europe, and as the 2G era changed to the 3G/4G era, the "unparalleled talent" Apple took scissors and began to shave the world. At the same time in China, domestic brands also gradually came onto the historical stage. At the end of the 3G era, perhaps Xiaomi was planning to unify the "copycat market" and Huawei was working hard to make a living...

Although the domestic mobile phone market was not optimistic in the early days of 1G and 2G network construction, in the era when high technology means high value returns, mobile phone terminals have absolutely huge profit margins. However, after the National Development and Reform Commission completely liberalized production licenses, countless suitors poured into this "gold mine", and the profit of mobile phones plummeted from 100% at that time to about 5% now.

3G ushered in the era of smart phones, but cheap technology made mobile terminals "leftover". After the advent of 4G, the technical difficulty of mobile phones has become increasingly difficult, and product concentration has become higher. After experiencing the "China Cool Alliance" era and the chaos of hundreds of companies, domestic mobile phones have become more concentrated.

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According to statistics, at the peak, the number of mobile phone terminal models produced in China could reach 5,000+ per year, while last year there were only more than 700 models. Smartphones have changed the appearance of mobile phones, from the flip phones, slider phones, and sliding screen phones of the previous decade to the water drop screens, full screens, punch-hole screens, and ejection cameras in recent years. In terms of appearance, terminal manufacturers can only rely on higher technology to optimize the details.

Recently, Huawei, Samsung and others have successively designed flexible screens, and Nubia has made watch-style wearable smartphones. Although these have become important selling points for smartphones in the 5G era, from the perspective of the development of the entire industry, it will take a difficult process to make them reach a common level.

As for the whole machine manufacturers, it is more like a war without fireworks. Motorola, once the synonym of mobile communication technology, is now becoming less and less related to this concept. In 2018, there were still 273 mobile terminal manufacturers "alive", but after the Year of the Pig, the statistics in Q1 show that there are only 148 left. Not only that, the production volume of the top 5 brands still firmly occupies only 80% of the total domestic production, and the other 100 brands share the remaining share.

The smartphone terminal market is already saturated, and the outward transfer of productivity has become a trend. At present, the potential of mobile phone terminals can only be tapped through technology upgrades, replacement of old and new machines, and development of multiple terminals for one person, but such a "human connection" market is no longer a blue ocean. Earlier, Samsung withdrew from its factory in Tianjin, and other factories also showed a trend of moving to Indonesia and other places.

Life is indeed not easy for domestic terminal manufacturers!

settle down

If you become rich, don't forget your friends. This is the truth for suppliers who embrace big brands. But it is no longer the case for terminal manufacturers of independent brands.

For a terminal manufacturer, it is very important to see the trend clearly.

We often say that 4G changes life, and 5G changes society. In the 4G era, the demand was streaming media, a way of transmitting while playing. In the final analysis, 4G services are mainly on the consumer side, while the difference of 5G lies in industry applications and the Internet of Things.

I once visited a famous domestic female mobile phone manufacturer, which has carved out a market in the field of smart phones by virtue of its exclusive and customized positioning. However, it seems inappropriate to define it as a smart phone terminal manufacturer now. At present, their product line has begun to widely deploy the Internet of Things and artificial intelligence, and is involved in applications in smart cities, smart home robots, etc.

The smart terminal market in the 5G era has just started! Why do you say that?

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According to Counterpoint statistics, global smartphone shipments fell 7% in the fourth quarter of last year and 4% for the whole year. In contrast, IDC research reported that the number of smart wearable devices in the fourth quarter of last year was 2,269 units, a year-on-year increase of 30.4%.

The future of smart terminals is no longer limited to mobile phones. Although smart phones still occupy a high share, with the change of market demand, single smart phones will no longer be the entrance to smart life in the future. Some time ago, the rumor that Huawei was manufacturing TVs also caused a big sensation. However, every time such news was exposed, Huawei would come out to refute the rumor that what they were making was not TVs, but large-screen smart terminals.

Smart terminals are not only used in smart homes, but also as the entrance to the future smart era, whether it is smart cities, smart communities, smart transportation, or some other smart environments. It is certain that after smartphones, the market for a variety of smart terminals in the 5G era will be a blue ocean.

Terminal manufacturers heading west need support from noble people

The trend of industrial transfer of smart terminals has caused terminal manufacturers to gradually move westward and to inland areas.

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Most terminal manufacturers would like to set up their research institutes in central cities such as Beijing, Shanghai and Guangzhou, while their production lines prefer to retreat to the hinterland. One reason for doing so is to get close to core technologies and to reduce costs. However, it is obviously not easy to maintain advantages under the impact of emerging markets such as Indonesia, after all, this is closer to the market.

Inland areas are facing the same transformation pressure as Indonesia and other regions, and attracting investment has become the most direct and effective way. These regions often have common characteristics: local production labor costs are not high, and technical requirements are not too high. In recent years, many inland cities have begun to compete for talent and attract investment. For terminal manufacturers who have retreated to the second line, their mature smartphone terminals can make better choices for them to welcome the arrival of the 5G era.

Summarize

In the digital and information transformation period, the cold winter of smart terminal manufacturers has just arrived. Along the way, countless terminal manufacturers have died due to the iteration of communication technology, the struggle between industries, or the market and capital pressure during the industrial transfer. In this way, enterprises need to seize the advantages in industrial migration, find another round of opportunities before the arrival of 5G, and make full use of 5G to expand new functions and new forms of smart terminals.