TMTPOST:FreeYond YuLei,The mobile phone industry has only metabolism and no king returns


The original article release of TMTPOST media APP

Former title: FreeYond Yu Lei: Mobile phone industry only has metabolism, no king returns

Author: Rao Xiangyu, Wu Honglei

Editor: Zhong Yi

Yu Lei believes that, mobile phones will become an important central hub connecting to the era of technology 4.0.

If someone starts his business in 2022, probably he won't choose to start from the mobile phone industry.

In the last third quarter, 297 million smartphones were sold globally, down 9% year on year, while the Chinese market dropped 21%. Strategy Analytics said that this was the fifth consecutive quarter of year-on-year decline in smartphone sales. The agency predicted that the global smartphone shipments in 2022 will also decline by 9% to 10% year on year.

At the same time, the head effect of high-end smartphone market is becoming more and more obvious. Among the top five mobile phone brands in the world, Apple is the only one that has maintained a positive growth.

However, the above is only one side of the mobile phone industry. As the whole industry enters the cold winter, Yu Lei, founder of FreeYond,and former vice president of Gionee mobile phone, believes that there are still new opportunities in the mobile phone industry. Yu Lei said to TMTPOST media, "Mobile phone is still a personal terminal product with the widest user base. This industry cannot always be those brands. The society must be developing in a spiral way. The mobile phone industry has only metabolism and no king returns."

Why is it still the smartphone industry?

Yu Lei was well known because he was once vice president of  Gionee Group。

At the end of 2015, Yu Lei, as the vice president of Gionee Group,held the press conference for the first time in Gionee's industrial park in Dalingshan Town, Dongguan City. At the same time, Huang Jiaqiang, the bassist of Beyond, was invited to the conference to serve as the platform for   Gionee new product M5 Plus。Now it seems that inviting the media to visit the production line is not new.However, at that time, many Gionee executives believed that there were many uncontrollable factors in this move, and Yu Lei also had great internal resistance and risked being dismissed.

The press conference finally enabled the brand of Gionee to be spread on a large scale at that time.A reference data is that at the beginning of 2015, the average monthly sales volume of Gionee mobile phone in China was only 500000. After the release of M5 Plus,Gionee mobile phone monthly sales directly exceeded 2 million at the end of the year.

Later, depending on Yu Lei's marketing route of holding high, Gionee Group invited celebrity spokespersons,such as Feng Xiaogang, Wu Gang, Yu Wenle, and so on,The brand awareness of  Gionee was further improved. From 2015 to 2017, the annual sales of Gionee mobile phone increased from 30 million to 40 million, and the market share once entered the top four of smart phones.

However, at the end of 2017, the gambling storm of Liu Lirong, chairman of Gionee Group, triggered a run on suppliers, which eventually led to the rupture of  Gionee capital chain. In just one year, Gionee Group went bankrupt.

According to Yu Lei, after leaving Gionee he joined BrainCo, a non-invasive brain computer interface company, as COO. During his tenure, Yu Lei completed the creation of the BrainCo commercialization system from 0 to 1. Later, a fund proposed to acquire Finnish company HMD——Nokia's brand licensor, , and let Yu Lei take the helm to operate the company。

However, the acquisition ended in failure for various reasons. The mobile phone team set up by Yu Lei for this purpose has not yet officially started to operate, and is facing a situation where there is nowhere to go. After a short communication, Yu Lei and the team decided to go it alone and start a new mobile phone brand, namely the current FreeYond brand.

"We believe that there will be several important scenarios in the future era of comprehensive intelligence. One is full body intelligence, which surrounds people; one is full car intelligence, which surrounds cars; and the last is full house intelligence, which surrounds offices and homes."

Yu Lei said to TMTPOST media that he and his team have studied many hardware products for full body intelligence. Finally, the team found that mobile phones are the real needs of people and one of the most critical hubs to connect to the next intelligent era.

Therefore, Yu Lei decided to return to the mobile phone industry.

To achieve this goal, Yu Lei called Yuan Xuanhua, the former chief designer of Gionee, to be responsible for industrial design of FreeYond. At the same time, Chang Shidan-the former CEO of Gionee in India market,Li Jian-one of the elders of Gionee, Zhao Yijun-the former senior product manager of Gionee, Qiu Zhimin,-the Gionee financial director, Zhang Wei-the product planning manager, and Ren Wenchang-the manager of the media department also joined in. Yu Lei revealed that the whole team building process was almost a hit. At present, FreeYond has also obtained an angel round investment of nearly 100 million yuan, led by a state-owned institution.

By FreeYond, Gionee has achieved a certain degree of rebirth.

Latin America, a forgotten smartphone market

After deciding to re-enter the mobile phone industry, choosing which market to enter has become a key decision after FreeYond was established. From the perspective of global market, Europe and the United States are controlled by Apple and Samsung, China and Southeast Asia are the Red Sea of many domestic mobile phone brands, and in Africa, Transsion has become the industry leader at present, .

Finally, we chose the Latin American market because other mobile phone brands lost this market."

Yu Lei told the TMTPOST media that, at present,among the major mobile phone brands only Motorola regards Latin America as the core market, while other brands such as OPPO and vivo regard Southeast Asia and India as key overseas markets.

It is worth noting that Latin America has become the fourth largest smartphone market in the world (the top three are Asia Pacific, Greater China and North America), with the shipment volume reaching 130 million to 140 million units in 2021.

At the same time, in the second quarter of 2022, Latin America is the only market maintaining positive growth in the global smartphone industry's downward trend. In the second quarter of 2022, the market share of smart phones in Latin America will be 43.5% for Samsung, 19.6% for Motorola, 14.0% for Xiaomi, 4.9% for Apple, 2.2% for OPPO, and 15.7% for other brands.

In addition, according to the data provided by Yu Lei, the urbanization rate in Latin America has reached 78%, the penetration rate of smart phones is 72%, the penetration rate of the Internet is 70%, the number of online shoppers exceeds 300 million, and the unit price of e-commerce customers in major markets is between $120 and $160.

"So we can see that Latin America has a population of 650 million, which is less than half of Africa's, but its population quality is quite high. Latin America's per capita GDP far exceeds that of Africa and Southeast Asia, and the market size of smart phones exceeds 200 billion yuan RMB."

Yu Lei said that for FreeYond, to achieve initial success in the Latin American market, it is enough to defeat Motorola, which is far simpler than competition in other markets. "From the current situation of Motorola, its failure is almost inevitable."

In fact, in addition to Motorola, FreeYond, as a start-up brand, still needs to consider whether domestic mobile phone manufacturers will refocus on the Latin American market in order to obtain new market growth in the context of the decline in global smartphone shipments, so as to slow down the decline in shipments. Yu Lei gave a negative reply to this.

According to Yu Lei, on the one hand, in Latin America, mobile phone products below $250 account for about 67% of the market share of smartphones. The absolute quantity in this price range even exceeds that of China. In terms of cost-effective products, large domestic manufacturers have no special advantages. On the other hand, the markets of China, India and Southeast Asia are already very large, and the market share has also increased by 1%, which is unmatched by Latin America.

"The domestic mobile phone manufacturers will certainly pay more attention to Latin America, but they will not regard it as the main battlefield in a few years, because the Chinese and Indian markets have already been a drag."

Yu Lei said that the low-end market did not help the revenue and profit performance of domestic manufacturers. For domestic manufacturers, Latin America belongs to the chicken rib market; For FreeYond, this is a chicken leg market.

Objectively, since the industrial chain of smart phones is mainly concentrated in China, and Latin America is the region farthest from China on the earth, it will take a month to ship goods, which also makes Latin America the island with the weakest smartphone competition.

Sun Yanbiao, consultant of Chaodian think tank, analyzed to TMTPOST media and said that the global mobile phone market is generally affected by the economic environment, and there is a great opportunity for the low-end smartphone market in Latin America. The FreeYond team has rich experience in supply chain channels, marketing and product making, which is very promising overall. In addition, when consumer electronics is relatively bad, it is also the best early stage of development, as long as there is no problem with the funds behind it.

Enter the market with cost performance ratio,get tickets for the next era

"For the Latin American market, what we want to do is to seize the market through the ultimate cost performance ratio." Yu Lei told the TMEPOST media.

Take FreeYond's two products for example,F9 and M5, The F9 processor is 8-core 1.6GHz, the rear camera is 13 million pixels, and the battery is 5000 mAh. The price is about $100. The price of Redmi 10A in similar configurations is about $150. The M5 is priced at about $137 in a similar configuration to Realme C35 and Redmi Note11E, and the actual selling prices of the latter two are about $197 and $184.

At present, Latin American users do not have strong brand awareness of smart phones, and the market is full of smartphones of various small brands. It's like six or seven years ago in china, the domestic smartphone market was full of "big cola" and "small pepper" brands. This market is the environment Yu Lei and his team are most familiar with, and many past experiences can be applied.

On the mobile phone display in Mercado Libre, the leading e-commerce website in Latin America, there are only simple text descriptions and specific configuration parameters of mobile phones, and there is no complex display as that of domestic e-commerce websites. This is obviously good for FreeYond, which focuses on cost performance and has excellent parameters.

According to Yu Lei, the key to making such cost-effective products is to master the core components of FreeYond. The core components of mobile phones account for 70% of the total cost of mobile phones.

"The entire R&D system does not match the development of mobile phone brands from high-end to low-end. Because the R&D system is actually for high-end, it only pays attention to the R&D and market of several flagship phones, and they do it at the low-end relatively casually. Unlike our current 100 or 200 dollar mobile phones, the entire company's energy is spent on this, which is a completely different concept."

Yu Lei said that FreeYond may not be as good as large mobile phone brands in general, but it will have advantages over competitors in some areas.

At present, FreeYond's market positioning is Latin America, including Colombia, Chile, Mexico, Peru and other countries, after gaining advantages in product strength. In terms of sales channels, FreeYond has chosen to focus on online sales. We also chose video and advertising as the main publicity methods, and signed a global strategic partnership agreement with TikTok; For offline channels, the main mode is national agents.

"Although the competition in the mobile phone industry is very fierce, even if it is a stock market, there is no industry that can compare with the stock market except automobiles. The data we can see is that the annual sales volume of smart phones in the world is 1.3-14 billion units, and there is a market of about 1 billion units apart from China."

Yu Lei told the TMTPOST media that the cost-effective products are only the initial stage products of FreeYond. After ensuring the survival of the company, they will gradually cover the full price products including high-end markets.

Looking to the future, Yu Lei believes that mobile phones will become an important hub connecting to the era of science and technology 4.0. At the same time, the annual ownership of overall intelligent hardware devices will reach 100 billion. To get the ticket to the next era, "mobile phone is a central smart terminal product that must be broken."

Chinese original link: https://www.tmtpost.com/6314317.html

Choose your Website