Note: hunting cloud millet release Note top-of-the-line version, breaking the original price system, lei jun tweeting claim that teams can make better after a few years in mobile phone products, but this is just surface, millet and deeper strategic considerations. Here is Yin Sheng of its thinking, reference for industry:
the author: Yin Sheng WeChat (jia zhi – xian)
yesterday (January 15), millet has released two paragraphs into the high-end market in the new product — 5.7 inch screen of millet Note standard and top-of-the-line version, prices broke through two thousand yuan and three thousand yuan respectively. For the China mobile company is known for it’s price, a move that is somewhat unusual.
but for its rival, should feel the chill – whether South Korea’s samsung, or local Chinese rival huawei. Aside apples here, both from apple minimum price products there is still one step away, moreover, apple seems to never aggressive of millet every otherwise why it still not come up with any decent corresponding action?
Yin Sheng (WeChat male jia zhi – xian) think, millet that means at least 4:
1, absolutely not allow local competitors in the high-end brand value , such as huawei in the past year have begun to pay off in the middle and high end management, established in the market segment and the strategic intention of tidal flats position has been open, once the formation of climate, huawei can use the market relatively high profit to subsidies in future attack of the low-end, forming the answer for a long time.
2, for samsung, millet attack on the high side, means that it either, as to the low end of the campaign to respond to, or more stick to high-end, and get out from the low end (at least distraction), which is the millet wants.
3, millet to high-end users to increase the average value of a single user. millet have been hoping that investors see it as an Internet company, and the Internet company valuation is one of the most common index value by the user. Apple’s single user value at about $900, Yin Sheng in another article thought millet single-user value at about $300 (corresponding to the average price of the two companies), if it is to continue to improve the value of a single user, improve the product’s average selling price is the most direct way.
4, which is the most important, millet a key of the entire business model, the user must produces strong dependence to their products, or its value will drop sharply, and rely on May ultimately from millet exclusive service platforms, but on the platform of the exclusive service form before, it needs to other sources of differentiation , high-end brand image, and increase a point source is the best, otherwise, once the low-end products due to competitive factors, such as goods, and services are still young, the whole business logic might be stuck.
the place on put together is narrated, millet into high-end, offensive stance defense in the mid-range of both the status. But a local Chinese rivals such as huawei, window of opportunity may be closed at the end of 2015:
once millet users reach a certain size, will be able to form a service income support product sales. I is based on the premise that if millet reliable data, by the end of 2014 millet sold a total of about 87 million mobile phones, if millet can get in the user to add a $2015, if do not calculate without the user’s repeat purchase, with beautiful MIUI authorized third party users, when using, then its unique users is expected to close to two.
if the data is reliable, millet by applying distributed in 2014 revenue estimates more than 1 billion yuan, if 2015 millet can be distributing each user’s income doubled again (with millet chain growth, it is possible), so 2015 is expected to bring nearly 5 billion yuan of the distribution of income, about 5% of the income for the millet.
5% estimate is millet and local Chinese competitors more optimistic net profit level, so, if millet like, it can almost completely sacrificed the profits, on the phone through the service income subsidies to its, so that it would be on their own without loss, will be almost all the local rivals into loss of competitive position. At that time, the initiative will be entirely in the hands of millet.
this will also let the samsung are in a very difficult choice: if it doesn’t want to profit is a drag on, will have to give up the low-end market. It also needs to calculate a bill, from millet in the industrial chain of (by selling parts), or with millet to soldier – even at the expense of profit of spare parts. So far, there has been no see which point it is like an Internet company, it is very likely to make it miss the product scale advantage into platform scale advantage of opportunities.
of course, all this is the premise of millet company can, in the case of a slowdown in China’s smartphone, through overseas expansion is still to keep more than 60% increase in sales, I continue to believe that huawei in the international market have a better chance – or samsung accelerated retreat, leaving more space. At the same time, samsung, Google, and those who have largely given up mobile phone business, but the company holding the key patent, are likely to become a spoiler.
in addition, if huawei in industrial chain, such as chip layout can scale as soon as possible, this will to win it some time, but fundamentally, it still must face up to the ecosystem of the millet pattern – it will eventually change of mobile phone product pricing benchmark.