The industry said that the low threshold of the mobile phone industry has drastically reduced the gross profit

“More money, less money, and more money”, and industry insiders describe the current status of the domestic smart phone market. On the one hand, HTC, Motorola and other well-known manufacturers "self-advancement" into the thousands of machine market, on the other hand, Baidu, Shanda and other domestic Internet companies to kill "strategic" spoiler, low-cost access to the mobile phone market. Data show that compared with Apple's gross profit margin of over 50%, the gross profit margin of many domestic mobile phone manufacturers is between 10% and 20%. According to industry insiders, the entry threshold for the mobile phone industry is relatively low, but the competition in the mobile phone industry is also very fierce. Although many brands are listed each year, many brands have also closed down. In order to break through the current situation where Chinese mobile phones only earn money and make less money, having a good product is the only way out.

In the past thousands of yuan domestic machine market, local brands relied on cost control and price war to occupy most of the market share. In the face of explosive growth in the smart phone market, not only did Internet companies want to get a slice of the market, but also some internationally renowned manufacturers. "Let's lay down" to enter the market.

According to statistics, the gross profit margin of local handset manufacturers is mostly between 10% and 20%. In contrast, Apple's gross margin is over 50%, and other international well-known manufacturers are around 30%. In this regard, the industry analysts said that the current market is still to win by volume, and some companies even earn money without making money. Although the profit rate of high-end machines is obvious to all, but Apple's status is difficult to shake for a while, and many companies also hope to open the market with cost advantages.

Domestic mobile phone Yulong Cool Group's parent China wireless financial report data shows that although 3G smart phone shipments hit a record high in 2011 and drove the company’s revenue to increase substantially, its net profit dropped by 43.5% year-on-year, and its gross profit margin also decreased by 9.6% year-on-year. . In response, the company explained that the Coolpad market expanded to the low-end, mass-market mobile phone market in 2011, while the fierce competition in the low-end and mid-range mobile phone markets resulted in lower average selling prices.

Similarly, the 2011 annual report of ZTE showed that the gross profit rate of terminal products was 15.18%, down 3.81% year-on-year. At the same time, the company's revenue increased sharply while the profits decreased by 36.62% year-on-year. In 2011, ZTE realized a net profit of 2.06 billion yuan, compared with 3.25 billion yuan in the same period of last year. .

Internet companies have upset <br> <br> but the fierce market competition has not diminished the enthusiasm of domestic manufacturers to enter, because the whole industry chain of intelligent machine hardware requirements for software-related higher, including Lenovo, ZTE, Huawei and other well-known manufacturers have instead Forces, continuously launched smart machines to enter overseas markets.

At the same time, domestic Internet companies, including Baidu, Xiaomi, and Shanda, are rushing out halfway and have introduced low-cost hardware devices. There was also news yesterday that Baidu and Foxconn were approaching the low-cost 1,000-yuan smart phone market.

It is understood that mobile phone devices of Internet companies are generally produced through foundries, often attracting consumers with relatively low price and high allocation, and then achieve profitability through other value-added Internet services. Taking Shanda as an example, the grand launch of the e-book was to subsidize its investment in hardware through content charges.

According to industry insiders, due to the lack of a complete mobile phone production line, R&D, and after-sales services, internet companies still face many problems in manufacturing mobile phones. At present, most companies still only have a "strategic" layout.

Industry: Local phone gross profit fell by more than 5 percent of new phone <br> <br> European integration Tang Fan Marketing Communication Center (IMC) director, said the domestic mobile phone in 2005 to 2010 was the era cottage blowout, there has been no Less brand, but by 2011, China's local mobile phone brands have decreased a lot, and the local mobile phone gross profit space has fallen by more than 50%, which is the result of fierce market competition.

According to Tang Fan introduction, in the past, in a mobile phone shop in a second-tier and third-tier cities, there were 20 to 30 cell phone brands and 300 cell phone models. The total number of brands will not exceed 15 and the number of cell phone models will not exceed 200.

Why are there so many companies in the market that are so competitive? According to industry veterans, the entry barrier for mobile phones is mainly low. If you just make a mobile phone, 2 million yuan will be enough. The Internet companies launch their own-brand mobile phones, and their specific approach is to choose mobile phone manufacturers to cooperate to bundle their application services. The market is generally "drinking the meaning of alcohol", the purpose is to occupy the mobile Internet terminal entrance, to ensure that the various products and services can be directly pushed to consumers.

Yang Qun, a veteran in the industry, said that Chinese mobile phone manufacturers must have their own epoch-making good products before they will appear in the market and drop 80 companies.

(This article Source: Dayang - Guangzhou Daily Author: cable Hasty segment Chen group)