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Source: Caijing.com
Author: Ann burning10/11/2020 23:55
On November 10, the Honor mobile phone, which has been in the whirlwind, added “cut” rumors. News from foreign media showed that Huawei will sell Honor mobile phone business. The buyer includes a small company consisting of Digital China, three state institutions, TCL and other companies. According to the shareholder camp, the source said the transaction price is based on Glory’s 6 billion yuan profit last year and 16 times the price / earnings ratio, which is about 100 billion yuan, and the highest it can reach 200 billion yuan.
Regarding the aforementioned news, Caijing.com asked the executives of Huawei and Honor, but no response has been received at press time.
Survival with broken arm
Honor is a key part of Huawei’s dual-branding strategy for terminals. After the Internet mobile phone heatwave of 2010, Honor anchored the low-end way to enter the market, focusing on the young market, backed by Huawei’s solid supply chain system and the advantages of self-developed chips, Taking gradually gaining the upper hand in comparison with Xiaomi, becoming Huawei’s most valuable “second card”.
According to data from research institutes, Honor accounted for around a quarter of Huawei’s global shipments in the third quarter of 2020 and even a third to China.
If it weren’t for the US government ban, Honor would have had to violently expand overseas markets as originally intended to provide a firmer push to Huawei terminals.
Under the ban, Huawei’s self-developed chip Kirin series lost TSMC’s foundry. The latest flagship chip in the Kirin 9000 series is expected to ship no more than tens of millions of pieces, all of which will be released for the first time by Huawei’s Mate40 series. “The Honor mobile phone is facing a situation where a core has not been available for a long time and the breakdown is imminent.
If Honor manages to become independent of Huawei, the supply of parts will not be limited by the US ban, which will help Honor grow its business and mobile phone suppliers. Previously, Dahua Technology, which was also on the U.S. Department of Commerce entity list, divested part of its automotive chip business and set up an independent company to manage it, with positive results. Therefore, from the point of view of many analytical institutions, the sale of Huawei’s glory is a win-win situation for all parties. As Tianfeng International analyst Guo Mingchi said, brand development is extremely difficult: if Huawei sells Honor, it can keep this brand and help the Chinese electronics industry become independent and controllable.
However, an industry analyst told Caijing.com that although Biden will focus on the handover issue after winning the election, it cannot be ruled out that the new glory will also be included in the list of entities in the future.
They have been saying for a long time
In fact, the rumors of glory splitting were long-standing.
Before the US ban, Honor’s success had already impacted Huawei itself. Younger designs, increasingly advanced flagship chip cycles, and extremely high price-performance ratios have made the twins a certain degree of sales. Let’s fight.
In the low-end product line, Huawei’s Nova and Changxiang series are not as loud as the flagship series and share the market share of the 1000-2000 yuan price range with the Honor Digital series and the V series. above are against OPPO and vivo. Although the popular series of “has achieved certain results, it cannot be considered a complete success.
Therefore, since the beginning of 2019, Honor has chosen a more extreme development strategy: to create another Honor in overseas markets. It has also been since this year that the iteration of Honor’s new machines in the domestic market has slowed down and more core personnel have been relocated to emerging markets such as Malaysia and Thailand.
The ban brought everything to an abrupt end. With the advent of the outbreak, most of Honor’s employees withdrew from China. Since the new machine can’t get chips, their work focuses on Honor’s IoT product line. After the launch of the new smart life product in May of this year, in September, Honor again held a new autumn launch of a new smart life product. Behind the strategy for the overweight IoT complete scenario is the frustration that the new machine cannot be released as planned.
According to the news, with the sale of Honor’s shares, Honor’s mobile team will usher in a major staff restructuring. Wan Biao, COO (Chief Operating Officer) of Huawei’s consumer sector, will join Honor and He Gang, the former president of Huawei’s mobile terminal product line, will serve as COO of Huawei’s consumer business. Yu Chengdong, CEO of Huawei’s business terminal, will not join the spin-off company Honor.
Influence geometry
Through these sales rumors, the industry has once again recognized Huawei’s very high decision-making power to “break a strong man’s arm”. In fact, the sale of “Golden Son” is the most effective way for Huawei to maintain cash flow. There was the new H3C first and Huawei Marine later, both of which had to keep hundreds of billions of R&D investments each year.
After the sale, Huawei may give up some market resources and transfer them to Honor, such as the Nova and Changxiang offline series, which will focus on making the P series, Mate series and Porsche design successfully enter the high-end market. .
A source told Caijing.com that Huawei’s terminals will also expand the market for autonomous driving and car cars in the future, although they “don’t build cars”, but will work to make cars “smarter”. Behind the major business changes are Huawei’s terminal ambitions.
Honor, which is a self-supporting portal, will have to face the bloody mobile phone market alone. It has lost Huawei’s hardware support and technical decentralization policies. Honor will face some degree of aphasia in camera algorithms, multi-device collaboration, and other strengths, but through the market resources released by Huawei It’s not hard to keep the share and the hard way is still in the future. But it should be emphasized that the introduction of the glory of state power will have the opportunity to go public with a high valuation – this is a new path that could not be achieved with Huawei.
Faced with Huawei’s market-oriented thinking, headphone manufacturers are also making changes. In 2019, there are not a few brands that divide the sub-brand. In order not to repeat the glorious mistakes, the independent operation of the sub-brand will become the top priority in the future.
Take Oujia Group as an example, its three mobile phone brands can already see obvious conceptual distinctions: OPPO focuses on the medium-high end, with the Reno series for volume, Find the series to explore the high-end; realme is committed to being a popularizer of 5G mobile phones, new models 5G reached one thousand yuan; OnePlus points to high-end brands and is unique in taking into account the main foreign markets.
During this year’s Double 11, Huantai Mall, which integrates the three main brands, began operating. The meaning of integration is evident and there may be more noticeable changes in the future.
Like OPPO, after many difficulties, vivo incubates iQOO and the Xiaomi Redmi spin-off undoubtedly hopes that the second card can grab some of Huawei’s fading market.
As for the acquisition part, how to get the effect of 1 + 1> 2 in the current saturated competitive market situation will further test its operational capabilities. The aforementioned buyers were less involved in the mobile phone business before, therefore, some insiders believe the buyer may also act as a “nanny role”. After Huawei’s industrial chain stabilizes, it may regain its glory.
But in any case, this action undoubtedly represents a major reshuffle of the Chinese smartphone market. Some people strategically retire in the short term, while others are determined to move forward. Countermeasures by domestic manufacturers will influence this battle. The final direction.
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