On February 22, Huawei released its foldable flagship mobile phone Mate X2, which is equipped with Huawei’s current highest-end 5nm process Kirin 9000 chip, priced from 17,999 yuan.
"We have prepared sufficient production capacity and are increasing production capacity every week and every month." Yu Chengdong, CEO of Huawei's consumer business, said at the press conference. However, due to the insufficient supply of chips, more than 3 million people queued up to make reservations. It was "hard to find a machine" for Huawei, which shows how difficult it is to get one.
It is no exaggeration to say that after other mobile phone manufacturers have recovered, Huawei's cliff-like plunge is in sharp contrast with its previous counter-trend growth. The "core change" has reduced Huawei, which has always been a strong leader. Be the biggest loser.
At the same time, Huawei founder Ren Zhengfei said in an interview that Huawei will never sell its terminal business, pointing out that terminals not only include mobile phone business, but are a collective term for many businesses. "We would rather transfer 5G technology than give up the terminal business" and "Huawei can survive without relying on mobile phones."
In response to the situation, Huawei recently publicly mentioned for the first time its long-rumored "Nanniwan" plan, that is, production self-rescue, including in the fields of coal, steel, music, etc., and stated that Huawei does not rely on its mobile phone business Can also survive.
Duan Aiguo, president of Huawei’s machine vision field, directly broke the news on the Internet, saying that Huawei has launched the “Huawei Smart Pig Farming Solution” and announced that Huawei’s machine vision will focus on smart pig farming, AI-enabled Intelligent upgrade of pig farming.
Harder to buy than Moutai & sales dropped sharply
On September 15, 2020, Huawei’s Kirin chips were officially cut off. Due to the shortage of chips, although the Mate 40 has been priced at 8,000 yuan in many channels, it is still hard to get one. Once it is released, it immediately becomes "sold out". Some users even joked that Huawei phones are more difficult to buy than Moutai phones. Nowadays, 3 million people are queuing up to buy the Mate X2, which is priced at 18,800 yuan. Huawei mobile phones are becoming more and more difficult to grab.
Before the U.S. ban was escalated, according to data released by JD.com in March 2020, Huawei sold 802,000 units, accounting for 38.5%, ranking first; in comparison, the ban took effect Later, in December, Huawei's mobile phone sales plummeted 70% to 266,000 units.
According to the latest sales statistics, in the fourth quarter of 2020, global sales of Huawei mobile phones plummeted by 42.4%, with sales falling directly from 56.2 million units in the fourth quarter to 32.3 million units in 2019. .
IDC statistics also show that Huawei ranks fifth in the global market share, with shipments of 32.3 million units. The market share accounted for 8.4%, which was a significant decline compared with 15.2% in 2019. Prior to this, in the third quarter, Huawei was still ranked second, but fell to fifth place in just one quarter.
Obviously, Huawei’s mobile phone shipments have suffered a great impact. After all, as recently as the second quarter of 2020, Huawei’s mobile phone sales ranked first in the world.
Due to the blessing of 5G technology, Huawei mobile phones have an absolute first-mover advantage, but the reason for the ban has put Huawei mobile phones in an embarrassing and forbidden place without "cores" available, and at least so far, Huawei Still not out of trouble, the situation facing the mobile phone business is becoming increasingly severe.
In order to alleviate the chip crisis, Huawei has restricted the purchase of Huawei mobile phones. Each person is only allowed to buy 2 Huawei mobile phones. It also reluctantly sold all its Honor mobile phones in order to survive.
Recently, the Ministry of Industry and Information Technology showed that a new Huawei mobile phone has entered the network, code-named ANA-AL00, but according to the data, this mobile phone is a 4G mobile phone. Many friends have already flocked to 5G mobile phone products, and even Apple has already released a 5G iPhone.
Of course, some relevant people also broke the news that the design of Huawei P50 is basically completed and will soon enter the mass production stage. and
According to Tencent News, as of the first half of 2020, Huawei has invested 180 billion yuan in chip inventory, which is enough to support Huawei's chip supply for a year.
However, given that Huawei has not completely solved the chip crisis, Huawei's chip shipments may further decline in 2021. It is not easy to say whether the release of new products can solve Huawei's urgent needs.
Data from Canalys shows that in the fourth quarter of 2020, Huawei (including Honor) shipped 18.8 million units in China, with a market share of 22%. Although it still ranked first, it still ranked first. Compared with the same period in 2019, it fell by 44%, and the lead over the second place was shortened from 22% to 2%.
Of course, Huawei has always emphasized that letting go of Honor does not mean giving up the mobile phone business. On January 26, the day before Huawei officially announced that Yu Chengdong would also serve as president of the Cloud and Computing BG, Huawei had just denied the sale. Huawei Mate and P series mobile phone business.
But the fact is that Huawei will have to face the risk of further shrinkage in its mobile phone business.
The Butterfly Effect of Chips
The ban that started in 2019 is just an "appetizer" and will have little impact on Huawei in the initial stage. But then, until 2020, the US Department of Commerce issued a message requiring all manufacturers that use US technology to prohibit providing chip design and production to Huawei.
Guo Ping, Huawei’s rotating chairman, once responded that Huawei consumes hundreds of millions of mobile phone chips every year. For this reason, Huawei's current strategy is to use limited chips to extend its unlimited business, so it will use limited sales to ensure market participation. Judging from the debut of Kirin 820E, Huawei has done exactly this and can only "squeeze toothpaste" on the chip.
Earlier, some media claimed that Huawei’s mobile phone business could no longer sustain and would sell its mobile phone business. They also said that Huawei as a whole would return to a “government-enterprise” development model and would no longer have direct-to-consumer terminals. business. After that, Huawei quickly issued a response, officially stating that Huawei has no plans to sell its mobile phone business.
But then, Huawei reluctantly divested itself of Honor in 2020. First, in October, it was reported that Huawei was preparing to sell part of Honor's equity for US$3.5 billion, and then in early November, it was reported that Huawei would sell Honor in a package. At that time, the acquirers also made a fuss, with TCL, China, etc. entering the market one after another. Subsequently, on November 17, Huawei officially announced its decision to sell its Honor business assets as a whole.
Prior to this, Honor, as an independent brand incubated within Huawei, has always maintained a relatively independent operation. Huawei + Honor dual-brand operations include the Mate and P series in the high-end market, and the mid-to-low-end market. Honor, in this case, the sale of Honor can be regarded as Huawei's self-rescue from the political suppression in the United States, and this will also change the business structure of Huawei's mobile phones.
Therefore, there are related rumors that Huawei is in talks with a consortium led by an investment company backed by the Shanghai government to conduct preliminary negotiations on the sale of its high-end smartphone brands P and Mate. It is said that negotiations have been going on for several months because of insufficient chip supply.
However, Ren Zhengfei directly stated in an interview that Huawei can transfer 5G technology, but it will never sell its terminal mobile phone business. Moreover, Ren Zhengfei also explained that Huawei’s terminal business is not limited to mobile phone business, as long as it is connected to people and things, such as lidar used in driverless cars, gas meters, water meters, and televisions used in homes, etc.
When asked by the media, "Huawei's mobile phone business revenue is inevitably declining now, and Huawei is also gaining revenue from other new opportunities. Do you think these revenues can offset the decline in the mobile phone business?" If so, how long will it take? "Ren Zhengfei also said, "I think it will be almost this year."
However, form is better than people. Regarding Honor, Ren Zhengfei also said that this is for more. Many suppliers and employment issues should be considered.
Qualcomm CFO Akash Palkhiwala also said at the financial report conference that with Huawei's decline in the smartphone chip market, Qualcomm is ready to raid the 16% chip market share vacated by Huawei.
Judging from the current specific performance of Honor, it is getting rid of the shackles of chips. When the new Honor was released in January, New Honor CEO Zhao Ming said that suppliers such as Samsung, Microsoft, Qualcomm, and MTK had resumed cooperation with Honor one after another.
Some media also learned the latest news that the cooperation between Honor and Qualcomm is under negotiation. Earlier, the CEO of Qualcomm China said: Although the Honor brand has existed for a long time, the new brand will be spun off. Honor is a new company, and the members of New Honor are themselves industry professionals. Cooperation with acquaintances will definitely go smoothly.
Now, after such a long time, Honor will launch the Magic series again. With the help of supply chains such as Qualcomm, MediaTek, Aisid and Songlian, this series is bound to continue to impact the high-end mobile phone market. .
As for Huawei itself, recently, there is news that Huawei’s Wuhan chip factory has officially obtained the upper limit and license for 4G chip supply. However, in the past year, the proportion of China’s 5G mobile phones has exceeded 50%, the market for 4G mobile phones has become smaller, which makes it meaningless for Huawei to produce and launch 4G mobile phone products even if it obtains a license.
A senior executive of a listed company in Huawei’s supply chain revealed that Qualcomm has obtained a license to sell 4G chips to Huawei. "(The 4G chip license) was obtained two days ago, but the 5G chip has not yet received the license."
If the license is really obtained, Huawei's supply capacity for 4G mobile phones will be stable. Even if it is less than the current technical level, it is much better than having no chip available.
Yu Chengdong and Huawei’s strategic changes
The mobile phone industry as a whole may not see many substantial changes in 2021. Competition among mobile phone manufacturers is still very fierce. Of course, Huawei The impact of the choked chip supply may still be the biggest variable in the mobile phone industry.
However, for Huawei itself, it may be the best choice to rearrange its layout and explore more new areas.
In this case, Huawei chose Yu Chengdong to "carry the weight" of the cloud business.
His arrival is also the first time Huawei has changed its core leadership since the establishment of Cloud BU in August 2017.
One thing worth noting about this personnel adjustment is that before taking charge of the cloud and computing BG, Yu Chengdong had served as the head of Huawei’s consumer BG and the director of the IRB (Investment Review Board) for smart terminals and smart car components. This means that Yu Chengdong will take over Huawei's three major businesses: mobile phones, automobiles, and cloud computing.
"Which product line Yu Chengdong goes to will become the star and the main product line," a veteran Huawei Cloud employee told Tech Planet. Huawei seems to be letting Yu Chengdong, who can win the battle, move from C-side to B-side business. It must not only compete with Apple in the fields of mobile phones, tablets, computers, etc., but also compete with Internet giants such as Microsoft in the fields of cloud computing and AI.
Yu Chengdong’s speech at the Mate Links to 8 types of Huawei terminal products such as PCs and tablets and N types of Huawei ecological chain products.
In addition, Huawei’s new direction is to provide hardware services. Hongmeng OS is such a product. Hongmeng OS is open to Midea and other manufacturers to provide basic services, just like the early days of Android. Ren Zhengfei also reiterated that Huawei will not expand its business areas, but mainly expand the application of electronic systems and software computing systems in different industries.
Ren Zhengfei also recently responded to the Nanniwan project for the first time. In his view, Huawei's "Nanniwan" plan means Huawei's production is self-rescuing and self-sufficient, including its technological breakthroughs in various fields such as smelting, smart screens, PC tablets, etc. It is intended that Huawei can survive without relying on its mobile phone business.
Duan Aiguo, president of Huawei’s machine vision field, took the opportunity to show the outside world that Huawei’s machine vision has launched a smart pig farming solution. Duan Aiguo said that Huawei's machine vision will work hard on smart pig farming, and the solutions are already ready. It needs to use the eyes of wisdom to perceive everything, and AI enables smart upgrades in pig farming.
In this way, various fields such as computers, steel, smart screens, and tablets are expected to be included in the Nanniwan project. Machine vision, AI, big data analysis, etc. involved in smart pig farming may also be part of it.
Then, the significance of the Nanniwan project to Huawei is very critical, because it means that Huawei is well prepared to deal with all difficulties and achieve technological breakthroughs in many fields. It seems that even if there is a solid technological fortress in front of it, Huawei will do its best to break it.