Some models are out of stock and wholesale prices have skyrocketed. Can Huawei get out of the winter under the constraints of the ban?

More than 10 days have passed since the ban on Huawei on September 15th came into effect. The surface of the water seems calm and the underwater currents are already surging. Many mobile phone wholesalers and retailers told Sohu Technology that due to limited chip inventory, Huawei’s mobile phones are seriously out of stock. “The volume of large merchants is about 15%-20% less, and many models of small merchants are out of stock.” A person familiar with the matter told Sohu Technology: “Huawei’s initial strategy is to give priority to maintaining more important markets when chips are limited.”

Some models are out of stock and wholesale prices have skyrocketed. Can Huawei get out of the winter under the constraints of the ban? 1

Counterpoint’s data shows that in the second quarter of this year, Huawei’s domestic market share reached 46%, which also exceeded the total of vivo (16%), OPPO (15%) and Xiaomi (9%) in the quarter.

Due to limited chips and tight supply, Sun Yanbiao, Dean of the First Mobile Phone Industry Research Institute, believes that Huawei will maintain its market share at about 20%. “Because even if Huawei produces its own chips, it needs a big brand that can carry it. The brand must exist so that it can make a comeback again and quickly become the global hegemon.”

As an absolute giant in the mobile phone industry, the changes that Huawei has encountered not only affect itself, but also profoundly affect the entire mobile phone market. An insider told Sohu Technology: “The entire industry chain has experienced huge fluctuations not only in terms of timeliness, but also in technology, craftsmanship, and stocking.”

“Wholesale price is close to retail price on official website”, some small businesses are “out of stock”

A number of mobile phone wholesalers and retailers told Sohu Technology that due to sanctions, Huawei’s mobile phone supply is very tight, and most merchants have received 15%-20% less goods. The wholesale price has now risen to the highest level, which is close to the official website pricing, and it has dealt a huge blow to unofficial merchants who “fought price wars”.

Zhang Fan has run more than a dozen offline stores in a fourth-tier city in Sichuan. She told Sohu Technology: “We have reduced the quantity of goods by almost 20%. We are doing a relatively large scale and the supply of goods is relatively sufficient. Some small businesses almost out of stock.”

“Our store Mate 30 was out of stock last month, and the big stores here are almost all sold out.” A clerk from an offline multi-brand mobile phone store in Enshi, Hubei, recommended to Sohu Technology that OPPO’s current main recommendation is Reno 4 Series-“The price is very high.”

Boss Lin, who is a mobile phone wholesaler in Huaqiangbei, can send out up to a thousand mobile phones a day and deliver them to the whole country. He frankly told Sohu Technology, “Huawei mobile phones now take almost 15% less.”

Even official stores with natural channel advantages are facing the problem of tight supply. “Now it is difficult for Huawei flagship stores and authorized stores to obtain goods from Huawei. Some regions require that the goods must be matched with integrated products, such as watches, Headphones etc.”

The supply of mobile phones is insufficient, but the demand is not small, which has caused the wholesale price of Huawei mobile phones to rise sharply. It should be noted that the increase in wholesale prices is due to the fact that Huawei’s mobile phones are in short supply, which belongs to the dealer’s spontaneous behavior, and the official price has not changed.

“Huawei mobile phone wholesale prices generally increase by 200-300 yuan. I now take the Mate 30 more than 1,000 yuan more than before. The Mate 30 Porsche model is even more exaggerated, rising by more than 2,000.” The counter owner of a digital square in Shanghai told Sohu Technology.

“Some time ago, Huawei’s mobile phones are priced at almost the same price a day, especially the high-end series. Just like stocks, the price that was sold yesterday cannot be sold at this price today. When the door is opened every day, I ask:’What is the price today?’ In the month we took the price of about 3,700, and it rose to about 4,100 in early September.” said the boss of Huaqiangbei wholesaler Lin.

“Huawei’s mobile phones are now selling one less than one, especially the prices of Mate series and P series phones have been rising, rising but not falling, and the price of OV phones is relatively stable.”

Li Hua, an online mobile phone retailer from Henan, told Sohu Technology that because Huawei’s mobile phones are out of stock and in short supply, their prices are rising rapidly, especially for the Mate30 and P40 series. A mobile phone is estimated to be 700 or 800 higher than before. “Like the Mate 30, the official website price is 4499. The wholesale price was 3,500 when we were the cheapest in Henan, but the wholesale price of this phone has risen to around 4,300.”

Out of the estimate of the price increase of Huawei mobile phones, Li Hua previously stocked 80 Huawei mobile phones at low prices, worth about two or three hundred thousand. The most numerous model is the Nova 5 Pro. He stocked 10 million goods in early September and is expected to make 3 million in a week or two.”

Now, the wholesale price of Huawei mobile phones has almost risen to the top, and the price difference with the official pricing is extremely small. This is a huge blow to unofficial merchants who rely on price advantages to sell Huawei mobile phones.

Li Hua specializes in online mobile phone retail, attracting customers with a price advantage lower than the official website price. He clearly feels the strong impact of Huawei’s insufficient supply of mobile phones and rising wholesale prices on his business. “Probably from the beginning of August, it became obvious that it was really bad.”

“We have lost the price advantage compared to official stores. Customers will turn to official channels to buy. The sales of many peers have plummeted, and the sales of Huawei mobile phones have fallen by 70%-80%.”

Grasp the big and let go of the small, some channels began to adjust

At present, Huawei officials did not disclose specific measures to respond to US sanctions, but a relevant person familiar with the matter told Sohu Technology that “Huawei’s initial strategy to protect domestic and overseas releases.” Various signals indicate that Huawei needs to prioritize protection when chips are limited. More important markets, to maintain a certain market position, to maintain the brand’s long-term presence.

Recently, Huawei’s rotating chairman Guo Ping responded to the US sanctions: “US sanctions have indeed brought great difficulties to our production and operations, but the specific data is still being evaluated.”

Huawei did not disclose too much about its response to sanctions. Regarding the question of “Is there any plan to set the priority of IoT and cloud services higher than that of Huawei’s mobile phone business?” Guo Ping said, “There is no detailed business plan yet. Share with you.”

A person familiar with the matter told Sohu Technology: “Huawei has a preliminary strategy to protect the domestic market and release it overseas. With limited chips, it will give priority to maintaining more important markets. However, Mate 40 will still be listed overseas, so it will take two or three months. The short-term impact is small, and the long-term impact is relatively large, which may affect the operation of the brand.”

“Honor has begun to adjust some channels and personnel, especially in some county and township markets, which were developed only at the end of last year.” A mobile phone channel source from Fujian told Sohu Technology: “The chip inventory is fixed, and the output of mobile phones is fixed. It will decline, and some markets that have not done well in glory will be strategically abandoned.”

Regarding the overseas market, a person familiar with the matter told Sohu Technology: “In some countries with a small market share, Huawei’s team will withdraw, move to larger regions, and withdraw to China. For example, in Belarus and Kazakhstan, which have relatively weak traditional Huawei forces. The country has withdrawn more. But the withdrawal of personnel does not mean closing the store, because the agents are still there, and the stores are still there. The closing of stores is the last thing manufacturers want to see, and this strategy is generally not implemented. These stores themselves are not It is built by the manufacturer, and there is no such thing as closing the shop.”

Recently, Huawei also revealed a signal to focus on important markets at a media exchange meeting. Wang Tao, managing director of Huawei and director of the product investment review committee, said in response to “Huawei’s cuts in research and development funds and layoffs in Australia”: “Australia is a small The market in China has never been a market that Huawei focuses on. Huawei has always leaned high-quality resources to high-quality customers.”

Sun Yanbiao, Dean of the First Mobile Phone Industry Research Institute, told Sohu Technology: “If the inventory is consumed according to the heyday of Huawei and Honor, I believe it will not last a year, or even more than 9 months, because Huawei’s market share is too high. High. If you only maintain the Huawei brand, you can support it for more than a year.”

“Chip manufacturing is so difficult. Huawei recently launched the Nanniwan project, but self-reliance takes time. It takes at least two years. When you want to persist for two years, you may not only give up some sub-brands, but also control Huawei mobile phones and other products. Shipments.”

He believes that Huawei will maintain its market share at around 20%, because even if Huawei produces its own chips, it needs a big brand that can carry it. “The Huawei brand must exist so that it can make a comeback again and become the global hegemon again.”

Spread to the industry chain

As an absolute giant in the mobile phone industry, the changes that Huawei has encountered not only affect itself, but the butterfly effect it brings has also profoundly affected the mobile phone industry chain and the entire mobile phone market.

Will other manufacturers cannibalize the market gap left by Huawei? A sales executive of a leading mobile phone manufacturer told Sohu Technology, “In the short term, the OV series and Xiaomi cannot get more production capacity, and may not be able to grab much market space for Huawei.”

“Not only has the impact on Huawei been relatively large, the entire industry chain has not only experienced huge fluctuations in terms of timeliness, but also in technology, craftsmanship, and stocking.”

“The mainstream CPUs used in the OV series and Xiaomi’s Redmi series are MediaTek. Huawei previously purchased 120 million 5G chips from MediaTek. MediaTek fully supplies Huawei. However, after September 15, the sanctions were upgraded, and MediaTek was unable to provide it. Goods for Huawei. Faced with the additional orders from OV and Xiaomi, MediaTek currently needs time and needs to adjust material preparation, process adjustment, and production line adjustment. Because the CPU procurement cycle is the longest 10 months, this capacity shortage will probably last until next year June.”

Sun Yanbiao believes: “No one knows how much Huawei will shrink. Those who are prepared at this time will be the recipients later.”

On September 7, Liu Bo, President of OPPO China, sent an internal letter stating that the overall sales of OPPO China this year are expected to increase to 100 million units, and sales in the second half of the year will increase by more than 30%.

A person familiar with the matter revealed to Sohu Technology: “Market sources say that OPPO has already placed an additional 70 million chip orders with MediaTek. The OV series and Realme will probably reach 280 million units next year.”

“Grab nova first, then P, then Mate, step by step.” Li Rui, CEO of Nuowei Consulting, told Sohu Technology: “Like the Reno 4 series currently promoted by OPPO, it is clearly against Huawei’s nova 7 series.”

Compared with the domestic market, Sun Yanbiao believes that the overseas market has less competitive pressure and is a big cake for domestic manufacturers, “because Huawei’s strategy must be domestic first and then overseas.”

Will there be a big change?

Of course, from the perspective of the major mobile phone manufacturers’ publicity strategies, they have maintained a more cautious attitude. After all, they do not want to stand up as a target at this time.

However, the pattern will inevitably change. Counterpoint data shows that Samsung accounted for 22% of the global smartphone market in August, while Huawei’s share was 16%. The market research company said that this is the largest gap between the two sides since February this year. Some analysts predict that Samsung’s mobile phone business’s operating profit in the third quarter was 4 trillion won, more than twice that of the second quarter.

Counterpoint data in the second quarter showed that the iPhone 11 topped the list of best-selling models in China, the United States, the United Kingdom, and Japan. The changes in Europe are also very obvious. In the second quarter, Xiaomi’s smartphone shipments in the European market increased by 64.9% year-on-year. The market share ranked among the top three for the first time, and Huawei fell to fourth.

In May of this year, OPPO announced that it had reached a cooperation with the operator Vodafone, and the entire line of products entered the Vodafone European market. In Europe, mobile phones are mainly sold through operator channels, which means that Huawei’s European market will be further captured.

From the perspective of domestic consumers, the scarcity is more expensive, especially the “out-of-print chip” has attracted many users’ desire to buy. The enthusiasm of most users for buying machines has not decreased due to sanctions, but has increased.

A customer of a Huawei authorized store in Shanghai Xintiandi told Sohu Technology when buying a machine: “I am interested in the P40. This time I passed by mainly to take a look. I have not considered the impact of chip sanctions and simply like this brand very much.”

The counter owner of a digital mall in Shanghai told Sohu Technology: “It is expected that the new Mate 40 in October will be very expensive to obtain in the secondary market, and it will not make much money because it will definitely be in short supply. The clerk at Huawei’s store told me that now Many customers have already paid in advance to book Mate40.”

However, there have also been cases in the market that some Huawei mobile phone users are worried about after-sales and switch to other brands of mobile phones. The manager of an OPPO store in Beijing told Sohu Technology, “Customers who encounter Huawei now will switch to OPPO mobile phones. Most of them come to buy high-end models. They are worried that some parts of the mobile phone cannot be replaced after the phone is broken due to the sanctions, but the number of such customers is not particularly large. They encountered three or four in about a month.

Not long ago, Huawei’s rotating chairman Guo Pingping said: “Huawei is now experiencing great difficulties and continues to be suppressed, and the specific impact is still being evaluated. Survival is our main line.” Huawei’s consumer business CEO Yu Chengdong also said, “Huawei Because of the lack of chip supply for smartphones in China, our smartphone shipments this year may be a little less than 240 million units last year.”

Even in a desperate situation, Huawei still has not given up on exploring new growth paths, such as the rapid growth of its IoT business. “An important reason why we still achieved revenue growth in the first half of this year is that our non-mobile products, such as PCs, watches, bracelets, etc., have achieved rapid growth. We are China’s largest smart watch factory and the largest wearable. Terminal manufacturers.” Yu Chengdong said.

Not long ago, Huawei also officially announced Hongmeng open source. Next year, Huawei’s smartphones will fully support the Hongmeng system. Huawei’s performance on the “ecological road” that Samsung, Microsoft and other technology giants have not followed.

At the same time, Huawei made it clear that it “will continue to maintain its investment in HiSilicon, maintain the stability of its human resources policy, and continue to recruit outstanding talents to help Huawei tide over the difficulties.”

This “winter”, Huawei “lives toward death.”