Fortunately, time has given us the answer, and the answer was just 10 years after Xiaomi was founded.
From the product business structure to business model, Xiaomi has responded strongly to the outside world: Xiaomi can not only be a cheap mobile phone with extremely high performance price ratio, but also bring it to the field of high-end mobile phones, forming a situation in which Samsung, Huawei, apple and Xiaomi dominate the world; Xiaomi is not only a mobile phone company, but also a unique business ecology of Xiaomi.
Some people say that as long as the value is there, it will show slowly, and it will always be self-evident.
Indeed, since last year, Xiaomis share price has been climbing. Up to today, its share price has reached a new high of HK $20 per share. It seems only a matter of time before it reaches a record high, or this is just the beginning.
Xiaomis tenth year is exactly the year when Xiaomis mobile phone has been firmly established in the middle and high-end industries. Lei Jun has just accomplished the high-end thing. All the past is a prelude, from which Xiaomi needs to make its ecological moat more profound. Therefore, Xiaomi has carried out strategic upgrading from mobile phone + aiot to mobile phone xaiot, which has a multiplier effect on Xiaomis ecology.
ASP increased nearly 12% year on year, and Xiaomi high-end has become
In August 26th, millet semi annual report disclosed that a series of data indicators showed that millet became the Internet plus manufacturing company that took the lead in the recovery of the epidemic. Net profit and net profit in 2020 are expected to exceed the market by 43%. Hong Kong stock Xiaomi group (01810. HK) rose 11.43% as of August 27, spurred by the strong performance of the semi annual report.
Since the implementation of mobile phone brand splitting strategy in 2019, it has been less than two years. Why did Lei Jun manage to accomplish this in a short time?
Now, judging from the second round, Xiaomis high-end success has benefited from two aspects: first, the general trend of the high-end mobile phone market; second, Xiaomis penetration into the high-end market with its consistent technological and product strength.
Lets look at the general trend of the high-end mobile phone market. According to the report released by counterpoint research, a market research organization, in recent years, the demand for high-end models among global consumers is increasing. In the third quarter of 2019, the proportion of mobile phones between $600 and $799 reached 43%, up 39% year-on-year. Mobile phones between $800 and $999 accounted for 21%, up 59% year-on-year.
Therefore, Xiaomis entry into the high-end market is not only the layout of its own strategy, but also the general trend.
So, in the face of Samsung, Huawei and apple, which are already in the high-end mobile phone market, how should Xiaomi, a latecomer, play?
In fact, in order to cut into the high-end market and fight the battle of preparation, Xiaomi has made full technical exploration before Xiaomi 10 comes out in February 2020, including mobile phone form, image technology, charging technology, etc. For example, Xiaomi 9pro5g took the lead in entering the domestic 5g market, and Xiaomi cc9pro made a breakthrough in 100 million pixel photography technology.
When Xiaomi 10s supreme commemorative edition appeared, its technology content was even more capable of playing. It topped the DxOMark list with a total score of 130 points, the worlds first 120 times ultra long focus low light level camera, and its photography ability was the worlds top. Among them, the 120W graphene based lithium-ion fast charging battery is particularly attractive. It can charge 41% in 5 minutes and 100% in 23 minutes.
With the precipitation of technology and products, the excellent performance of Xiaomi 10 series in the market is expected.
In February 2020, the Xiaomi 10 series mobile phones will be delivered with more than one million in less than two months. During the Jingdong 618 Shopping Festival, Xiaomi 10 won the sales champion of 3500-4500 price segment. Xiaomi 10 supreme commemorative edition was sold for the first time on August 16, with sales amount exceeding 400 million yuan in 10 minutes.
In the overseas market, the shipment of high-end mobile phones priced at 300 euro and above increased by 99.2% in the second quarter.
Reflected in the financial report, Xiaomis average global smartphone price (ASP) increased by 11.8% year-on-year. In terms of revenue, this offset the impact of the decline in mobile phone shipments in some regions caused by the epidemic, and improved profitability.
More than that, Xiaomis success in cutting into the high-end mobile phone market means that among the users of Xiaomis ecological services, there are not only large base users who pursue the ultimate cost performance, but also more and more high-end consumer groups join in, which will enhance the commercial liquidity of Xiaomi ecology.
Counter trend growth password: from mobile phone + aiot to mobile phone xaiot
In the face of such challenges, millet in the first half of the year, especially in the second quarter, handed over a counter trend growth response. In terms of revenue and net profit indicators reflecting business scale and profitability, in the second quarter of 2020, revenue increased by 3% to 53.5 billion yuan year-on-year, 8% higher than the expected data, which exceeded 4% of the expected data; the net profit in the second quarter of 2020 was 3.4 billion yuan, significantly exceeding 43% of the expected data.
Among the 53.5 billion yuan of revenue in the second quarter, the contribution of smart phone business was 31.6 billion yuan, that of IOT and consumer products was 15.3 billion yuan, and that of Internet services was 5.9 billion yuan.
In order to find out the code of Millets growth against the trend, we need to make the observation perspective more granular.
In terms of market share, the market share in the second quarter of 2020 has increased from 8.4% in the first quarter to 10.1%. As mentioned above, Xiaomi has a firm foothold in the high-end mobile phone market this year, which has boosted the ASP of Xiaomis mobile phone. As a result, Xiaomis mobile phone business revenue in the second quarter overcame the adverse impact of the decline in mobile phone shipment caused by the epidemic, with a slight drop of 1.2% year-on-year.
In addition to the slight decline in smartphone business revenue, IOT, consumer goods and Internet service revenue were all in reverse growth. In particular, Internet service revenue reached 5.9 billion yuan, up 29% year on year.
Reflected in the number of devices and users, as of June 30, 2020, the number of connected devices of Xiaomi IOT platform has reached 271 million, with a year-on-year increase of 38.3%. In June 2020, the monthly living users of Xiaoai reached 78.4 million, with a year-on-year increase of 57.1%.
In terms of Internet services, in June 2020, the number of monthly active users of MIUI reached 340 million, a year-on-year increase of 23.3%.
The above core business is actually the intelligent hardware + efficient channel + Internet iron man business model confirmed at the beginning of Xiaomis establishment. In this epidemic, it embodies its vitality.
Take intelligent hardware as an example. Xiaomis IOT products focus on the technological life of users, and their categories have become more abundant in recent years. Its popular with kitchens and kitchens.
In particular, since the birth of Xiaomi, its channel construction is different from that of traditional mobile phone manufacturers. This epidemic has hindered offline sales channels. The efficient online channels built by Xiaomi in the past helped Xiaomi overcome this dilemma, which is one of the reasons why Xiaomis mobile phone business has been less affected in the first half of the year.
Standing at the node of the new second venture, Xiaomi chose to upgrade its core mobile phone business again, from mobile phone + aiot to mobile phone xaiot. Mobile phone and aiot are not simple addition and juxtaposition relationship, but to play a multiplier effect, consolidate millet ecological moat.
In the past product data of Xiaomi, there is an insight that the retention rate of Xiaomi mobile phone users bound to IOT devices on the Xiaomi IOT platform is higher than that of non IOT users. The number of devices linked by users on the platform also increased by more than 25% on average after one year, which shows the stickiness of users brought by Xiaomi aiot platform.
Therefore, Xiaomis mobile phone and aiot must be symbiotic, promote each other, and play a multiplier effect. Therefore, we can see that Xiaomi has launched the Xiaomi wonderful enjoyment scheme to strengthen the interconnection between equipment.
Based on the confidence in Xiaomis new strategic mobile phone xaiot strategy and Xiaomis performance in the high-end mobile phone market, research institutions have raised their expectations.
In the latest research report, China Merchants Securities (Hong Kong) predicts that the shipment volume of Xiaomi smart phones will increase from 130 million in 2020 to 144 million / 150 million in 2021 and 2022 (increased by 10% and 4% respectively), MIUIs Mau will reach 450 million and 530 million in 2021 and 2022, respectively, and the realization value of Xiaomis Internet users will also be released.
Therefore, China Merchants Securities (Hong Kong) proposes to buy Xiaomi in case of any falling stock price, because we expect that the stock will be revalued as time goes by and Internet users are cashed in.
Source: Wang Fengzhi, editor in charge of Netease technology channel_ NT2541