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Lenovo dilemma 10 years of R & D costs less than HUAWEI one year

Lenovo's poor performance is seen as the reason for the change. According to the IDC report of the international well-known research company, Q3, Q4, and Q1 in 2015 were 12.8%, 9.5% and 8.2% in China's market share in 2014, and the share of the mobile phone was declining. In 2015, Q1, Lenovo Mobile China market shipments 8 million 200 thousand units, compared with 2014 Q1 decreased by 22%, ranking from second to fifth.

In the 2011 fiscal year, Lenovo's mobile revenue was 804 million dollars, still losing money. The total revenue and operating profit of China's market are $10 billion and $507 million respectively, including $9 billion 200 million and $523 million for personal computer services, and a loss of $15 million for non PC business. In China's non personal computer business, mobile business is the absolute main body.

"After that, the group may realize that the route of the boutique is not feasible, instead of moving towards the sea of machine tactics. "A Lenovo researcher recalled that in the middle of 2011, Lenovo began to sacrifice profits and launch a lot of low-cost mobile phones," which is just like PC's market strategy.

This strategy has been effective at the beginning. In fiscal year 2012, Lenovo's smart phone shipments exceeded 7 million, an increase of 1070%. In the 2013 fiscal year, Lenovo continued to grow by 300%, with 28 million shipments.

However, Lenovo Mobile had to sacrifice profits in order to implement the tactics of the machine and sea. In the 2012 fiscal year, Lenovo's mobile phone sales increased by 10 times and only increased 85% revenue growth. Mobile sales increased from 800 million to 1 billion 484 million dollars. Moreover, the financial report shows that in fiscal year 2012, Lenovo lost 69 million dollars in the non personal computer business (mainly mobile phone business) in China.

In 2013, Lenovo Mobile revenue reached $3 billion 39 million, but China still lost $50 million.

It is worth mentioning that, thanks to the experience of supply chain management accumulated in the PC era, lenovo mobile phone costs continue to decline. In the first quarter of 2013, the scale effect of lenovo mobile phone became apparent, and mobile phone business began to make profits. In fiscal year 2014, Lenovo shipped 50 million, flat 9 million, and earned 5 billion 657 million dollars. The non personal computer business in Lenovo made a profit of 17 million US dollars.

But it needs to be pointed out. "70% of the shipments of Lenovo cell phone come from the operators' channels. "The Secretary of the Chinese Federation of mobile phones told reporters:" and, because of the breakthrough of the operators channel, the lenovo mobile phone has gradually abandoned the operation of open channels. "We need to point out that because of the accumulation of PC era, case wallet for iphone 6 plus Lenovo has more than 5000 offline stores in China, as well as a large number of agent points and maintenance points. But these channels, which are far beyond other mobile phone brands, have not contributed much to mobile phone business.

In 2014, Lenovo MIDH business structure adjustment, responsible for China region sales, channel MIDH China business department general manager Feng Xing, transferred from MIDH. After that, Feng left Lenovo in the middle of 2014 and moved to music. He left with almost all of the operators.

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Lenovo has neither VIVO nor OPPO's leading social channel, nor is it the leader of millet and glory in the Internet mobile phone business. Lao said, Lenovo has become the biggest victim of mobile phone channel reform.

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In early 2013, CEO Yu Chengdong, a HUAWEI consumer business, said publicly: "we can't make rats in rice jar. "After that, HUAWEI began to cut down the low-end mobile phone business. In the middle of 2014, Yu Chengdong once again said: "relying solely on the channels of operators to push a lot of low-end mobile phones is bound to be a no return. "After that, HUAWEI P7 and Mate 7 high-end mobile phones began to emerge.

In addition, HUAWEI will honor the series of mobile phones as an Internet brand, competing with millet online. In the second half of 2014, HUAWEI invested huge sums of money in building offline channels and opened more than 300 service stores nationwide. In 2015, HUAWEI will create more offline channels.

The same for the beneficiaries of the operators of the beneficiaries of the ZTE, is also adjusting, the brand is divided into three brands of cool, big God and ivvi, the independent operation of the operators, the Internet and social channels, and reduce the ultra low end of mobile phone shipment, from the pursuit of shipments to the pursuit of profit. In the earnings report, cool said: "ivvi ranks third in China's e-commerce channel sales. "

"20142015 years, millet, glory, Meizu, music began to rise online, vivo, OPPO dominate the line, HUAWEI also online follow-up. From the product level, we are also beginning to hit the high-end market. "Lao Yao pointed out that the mobile phone market is constantly changing.

In fiscal year 2015, Lenovo Mobile and tablet shipped 87 million 600 thousand units, phone cases that make your phone bigger with a total sales of $9 billion 142 million. The average price per terminal is about $100 and $650, which is even lower than that of millet. In 2014, millet mobile phone shipped 61 million 120 thousand, revenue of about 74 billion 300 million, the average selling price of about 1200 yuan.

"In fact, Lenovo is also building the 'flagship machine'. However, the software R & D process of the flagship is exactly the same as the Millennium machine. From the project to the software seal in one quarter of time, "the development team of the flagship, the R & D team has almost no right to speak, it is the leader of the product team." "

However, the above research and development staff believe that "Lenovo's R & D is not taken seriously at present. R & D investment is very low, R & D budget is also difficult to pass the examination and approval. "

According to the 20062015 fiscal year's report, Lenovo's annual R & D expenditure accounts for 2.6% in the 2015 fiscal year and less than 1.9% in the rest of the year. Over the past 10 years, Lenovo has invested $4 billion 405 million in research and development costs, less than HUAWEI's R & D spending last year. In 2014, HUAWEI's R & D expenditure was 40 billion 800 million yuan, and R & D revenue accounted for 14.2%.

Although Lenovo is different from HUAWEI's overall business structure, the gap is still surprising. Even compared with the cool, vivo and other mobile phone manufacturers, Lenovo is also slightly inadequate. In 2013 and 2014, the proportion of cool research and development revenue was 3.56% and 2.91% respectively.

But for Lenovo, it may not be easy to increase R & D investment. After acquiring IBM servers and Motorola business, Lenovo's net cash flow is negative: $28 million. Moreover, in recent years, Lenovo's net profit margin has always been below 2%. Increasing R & D investment is bound to affect profit performance.

At the end of 2014, Interbrand, a well-known consulting firm, announced the "Best Global Brands" in 2014. HUAWEI ranked 94 in the list, becoming the first Chinese brand to break into the 100 strong brands. And Lenovo was not on the list.

"Lenovo's marketing thinking is also in the PC era. Lao Yao pointed out: "millet, HUAWEI and Ali have already established a very mature internet marketing system, but Lenovo still has no independent marketing team. "

"In the past two years, the Lenovo situation is not satisfactory, but because of the wrong route, its competitiveness is still strong. "A mobile phone manufacturer told reporters:" talent reserves, enterprise volume, supply chain control, channel management experience, the acquisition of patents, make your own phone case at home these other mobile phone manufacturers are not able to compare. "

At present, Lenovo has built 6 manufacturing bases in China, India, Indonesia and South America. Through the supply chain around the world, Lenovo can produce more than 100 million mobile terminals each year.

In addition, after the acquisition of Motorola, Lenovo's overseas business has been supplemented. Gartner released the 2015 Q1 global smartphone sales report. In 2015, Q1 Lenovo's global mobile phone sales increased 18 million 880 thousand, an increase of 13% over the same period last year. Although the market share dropped from 5.9% to 5.6%, Lenovo remained at the third place in the world.

In addition, Lenovo has high hopes for new executives. After Liu Jun, Lenovo Group CEO Chen Xudong, a newly established intelligent Hard Suits Inc magic workshop, took over as president of mobile business group. Yang Yuanqing evaluated Chen Xudong's "likes to taste, likes to try, likes adventure, has an open mind", and said: "these are Lenovo Mobile needs some spirit. "

But it needs to be pointed out that the magic workshop is only half a year old. On the Lenovo TechWorld in May 28th, the magic workshop was officially unveiled. However, there are only four products, such as intelligent socket, Bluetooth sound box, mobile power supply, etc., all of which are OEM, and such products as millet and HUAWEI have already been released.

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On the same day, the magic workshop also announced the launch of mobile phone products, the mobile phone brand ZUK, will be available in the second half of 2015.

Leme, ZUK, Moto, combined with the high-end mobile phone brand Vibe launched in 2013, and Lenovo Group will have four flagship brands, and the number of brands exceeds the other mainstream mobile phone manufacturers. In addition to the problem of "changing thinking", the market positioning and resource allocation of the four brands will also become a puzzle for Lenovo.

"Chen Xudong may not be able to mobilize the resources of Lenovo, which is not conducive to the revival of Lenovo. Lao Yao pointed out that Lenovo's own problems can not be solved by replacing management. Restructuring, planning products, reshaping the image, best iphone 6 grip case and reforming channels are not enough, and every step takes time.

He believes that during the transition period, Lenovo Mobile Phone continued to decline in China, is inevitable. And Moto, may be the lifesaver of Lenovo. Before the successful transformation, Lenovo can only rely on Moto to maintain its position in the industry. (editor Lu Aifang)

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