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Huawei sells cars, life and death speed

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Article | AI Blue Media Collection, Author | Wei Xiao In the face of force majeure, Huawei can only find another way out. Shanghai Auto Show on April 19. When the Tesla female car owner stood on the roof to defend their rights, Huawei’s consumer business CEO Yu Chengdong was also there. But obviously, he didn’t have much thoughts on this matter. He has more important tasks. The only time he has to go to the exhibition is not as good as a knife, such as taking a picture of the auto exhibits of major manufacturers with his mobile phone. This is one of the instincts of people in the automotive industry. Yes, both of Yu Chengdong’s feet have entered the automotive industry. If we say that five months ago, when Huawei internally adjusted the smart car solution BU to the consumer BG directly in charge of Yu Chengdong, the outside world did not have a clear perception. On April 20, one day later, Yu Chengdong personally proved this. On the same day at the Huawei flagship store on Nanjing Road, Shanghai, at the Smart Travel Huawei Smart Selection Tasting Conference, Yu Chengdong officially announced that Huawei will sell cars next. After that, there will be new car products based on Huawei Smart Selection to carry out dual-channel joint sales, which will be sold in Huawei’s offline flagship stores and Huawei Mall, and will be available for consumers to purchase and experience together with Huawei mobile phones, smart screens, PCs and series of smart selection . Yu Chengdong also became Huawei’s chief car sales officer, actively endorsing Huawei’s car sales on Weibo, and became active again. For technology companies such as Huawei, the new energy vehicles are inevitable. From a very early time, Huawei has begun to deploy in the fields of smart car systems, and has reached in-depth cooperation with a number of automakers. However, when it comes to Huawei nowadays, selling cars has a tragic meaning for self-help. Yu Chengdong said frankly: After many sanctions by the United States, Huawei’s mobile phone business has encountered very large supply challenges. As this kind of high-frequency, just-in-demand, massive, and high-value product, mobile phones can make up for this lack of sales, and the only thing that can be compared is smart electric vehicles. Although the sales volume is not as big as that of mobile phones, the unit price is high and the sense of value is high. Obviously, Huawei is still helpless in selling cars to a certain extent. After all, the 12 offline flagship stores and more than 5,000 experience stores are somewhat idle in the absence of sufficient supply support. Fill holes Huawei needs to fill in the deficiencies caused by the ban on its mobile phone business. According to Huawei’s 2020 annual report, Huawei’s growth has slowed sharply in 2020, with annual revenue of 891.4 billion yuan, a year-on-year increase of only 3.8%. In the previous three years, Huawei was able to achieve year-on-year growth of about 19%. Who slowed down Huawei’s growth? The answer is self-evident. It is the multiple sanctions, especially against Huawei’s rapid growth in consumer business in recent years. In 2016, when Yu Chengdong called out “kill Apple in three years and Samsung in five years”, the outside world thought he was talking unrealistically, but the facts proved that Huawei soon surpassed Apple in shipments. And it only took three years to close the distance with Samsung infinitely. According to Huawei’s 2018 financial report, Huawei’s consumer business surpassed the operator’s business for the first time, becoming the largest pillar of Huawei’s revenue. In 2019, Huawei’s consumer business achieved sales revenue of 467.3 billion yuan, a year-on-year increase of 34.0%, accounting for 54.4% of overall revenue. Among them, in the field of smartphones, in 2019, Huawei (including Honor) smartphone shipments exceeded 240 million units, a year-on-year increase of more than 16%, of which 5G mobile phones shipped more than 6.9 million units. According to the reports of market research institutions IDC and StrategyAnalytics, Huawei (including Honor) smartphone market share reached 17.6% in 2019, firmly ranking the top two in the world; 5G mobile phone market share is the world’s first. If it weren’t for the ban, in 2019, Huawei’s consumer business would be the number one in the world, and it would continue to advance in 2020. But unfortunately there is no if. In 2020, the growth rate of Huawei’s consumer business has fallen sharply. The financial report shows that in 2020, Huawei’s consumer business achieved sales revenue of RMB 482.9 billion, a year-on-year increase of only 3.3%, and its proportion in overall revenue also narrowed slightly to 54.2%. At the same time, in this financial report, Huawei’s consumer business did not disclose the shipment volume of Huawei (including Honor) smartphones, but highlighted Huawei’s “1+8+N” full-scene terminal connection. An obvious fact is that this year, Huawei’s mobile phone business has declined significantly. According to the 2020 global smartphone shipment report released by IDC, Huawei became the mobile phone manufacturer with the largest decline in shipments that year, with shipments of 190 million units, a year-on-year decline of 21.5%. At the same time, with the gradual escalation of the ban and the consumption of the original chip stock, in November of this year, in order to save itself, Huawei sold its sub-brand glory in desperation. This further means that Huawei’s mobile phone market share will continue to shrink. In Q1 this year, the signs are already very obvious. According to the Q1 global smartphone shipment report released by Strategy Analytics this year, the top five in the world no longer have Huawei, and the latter has become the “other”. For Huawei, this is indeed an unacceptable fact, but it has to be accepted. In the face of force majeure, we can only find another way out. Automobiles are just a piece of fat for Huawei to fill the gaps in consumer business. Not build a car From the industry’s perspective, Huawei’s participation in the automotive industry has a certain foundation. First of all, it has been in the field of Internet of Vehicles for many years. For example, as early as 2009, the research and development of in-vehicle modules was started; in 2014, Huawei established a car networking laboratory; in 2015, Huawei attracted eight manufacturers including Ericsson, Intel, Qualcomm, and Audi to establish a 5G car communication system. The technology alliance starts with the communication technology that it is good at, integrates AI chips, computing platforms, cloud services and other service modules, and then provides a complete set of services for smart car data. and many more. Based on the accumulation in the ICT field over the past years, Huawei Smart Car BU has penetrated into the core areas of smart electric vehicles, including five business segments: smart driving, smart cockpit, smart network, smart electric, and smart car cloud. Among them, in terms of electric drive system, vehicle power supply, battery management system, etc., Huawei has launched mass-produced products and realized commercial use. Secondly, as Yu Chengdong said, Huawei has brand endorsements and also has offline channels. Huawei’s consumer business has established 12 flagship stores and more than 5,000 experience stores around the world. With such channel advantages, Huawei can approach and get close to consumers by changing the geographic distance between traditional 4S stores and consumers. In Yu Chengdong’s words, Huawei’s car sales are not at the same level as Mercedes-Benz, BMW, and Tesla. These can indeed support Huawei’s car sales. But obviously, the market has another imagination about Huawei selling cars, that is, whether Huawei builds cars or not. Even if Huawei has given the answer many times. In 2019, Huawei clarified its positioning as a “incremental component supplier for connected cars” and an intelligent driving strategy of “focusing on ICT technology to help car companies build good cars”, and conveyed a strong signal to the outside world that it would not build cars. In November last year, when the smart car BU was assigned to Yu Chengdong to take charge of the consumer BG, Ren Zhengfei issued a statement emphasizing “who will build a car in the future, interfere with the company, be transferred out of the job, and find another job.” At the same time, when the official car sale was announced this year, Huawei executives including Yu Chengdong also reiterated: Huawei does not build complete vehicles, but intervenes in the industry as an ICT (information and communication technology) supplier. Huawei should not only help automakers build good cars, but also help automakers sell good cars. It is time and again to draw a clear line between car building. At least so far, it can be confirmed that Huawei’s entry into the smart electric car track is to become a supplier of China’s automotive OEM core component technology company. How to understand it, in the dimension of new energy vehicles, Huawei’s goal is to help Xiaomi build good cars! This is still a feasible way. The problem is, it’s hard to say if you can build a car in the future. After all, the Internet has not been a day or two since the overthrow of the previous plausibility.