The domestic mobile phone that was once as famous as Huawei has been “resurrected”, and it is said that it will return to the first echelon within three years!

Coolpad mobile phone, which has been silent for a long time, has returned to the public eye as “New Coolpad”.

“The ‘new’ of the new Coolpad is reflected in the new team, new capital and new strategy.” Chen Jiajun, chairman of Coolpad Group (02369, HK), said at a media conference held recently.

Once upon a time, Apple and Samsung represented overseas mobile phone brands, and the domestic ones were the leader of “China Cool Alliance”. From 2012 to 2013, “China Cool Alliance” together accounted for nearly half of the market share, while the market share occupied by vivo was still “other”, and OPPO and Xiaomi were just starting. In 2013, Coolpad ranked among the top five in the world for the first time, and its shipment volume was once higher than that of mobile phone brands such as Nokia and BlackBerry. However, with the sharp shrinkage of the operator’s customized subsidies, the four major brands that occupy half of the domestic mobile phone market have been rewritten.

In recent years, Coolpad, which has continued to lose money, has been actively trying to save itself, but with little success. Since the beginning of this year, Coolpad has made frequent moves in the domestic market, hoping to find a revival opportunity in China, the world’s largest market. “There are huge market opportunities now, and our goal is to return to the first tier within three years,” said Chen Jiajun. But what makes the outside world curious is how Coolpad can advance its new strategy in the fiercely competitive domestic market? Now, is there any hope for Coolpad?

The domestic mobile phone that was once as famous as Huawei has been “resurrected”, and it is said that it will return to the first echelon within three years!

Image source: Photo Network-500553887

Return to the domestic market with a new identity

According to previous statistics from major institutions, although other manufacturers have worked hard to seize the market share left by Huawei in the past few months, so far, there has been no recognized “Huawei successor”, and the scale of Chinese mobile phone companies is gradually becoming transparent. , the head company cut most of the cake.

According to IDC data, in the second quarter of 2021, China’s smartphone market shipped about 78.1 million units, down 11.0% year-on-year. Among them, the top five smartphone manufacturers accounted for 81.9% of the market share, while the top five smartphone manufacturers accounted for 66.5% of the market share in the same period last year. The “Matthew effect” in the mobile phone industry is very obvious.

Returning to the domestic market at such a time seems to be more challenging. Chen Jiajun believes that there are some deep opportunities in the industry at present. “First of all, hardware iteration is slowing down, and it is difficult to differentiate based on hardware alone. In this context, new brands have the opportunity to catch up with top brands in terms of hardware, especially in terms of systems and services; secondly , supply chain risks are rising. In 2021, the predicted sales volume of the entire mobile phone industry will surge, coupled with the shortage of chips on the supply side, stockpiling and speculation will prevail. At the same time, the growth of the demand side is not as good as expected. This gap between supply and demand, It may bring the risk of supply chain fluctuations. Coolpad is light-packed and has more room for adjustment. Third, the shrinking stock will bring opportunities for channel changes.”

In order to compete for a place in the fiercely competitive domestic market, Coolpad has made preparations in three aspects: new team, new capital and new strategy.

A few days ago, the announcement of the appointment of senior management personnel issued by Coolpad Group showed that from October 8, 2021, Qin Tao was appointed as the senior vice president of the group, and Hu Xing, Li Yujing and Sima Yunrui were appointed as the vice presidents of the group. Judging from the resumes of the four people published by Coolpad Group, the four executives all had Xiaomi working backgrounds before joining Coolpad Group.

Among them, Li Yujing is the vice president of Coolpad Group and the president of the hardware product center, responsible for product planning, hardware research and development, supply chain and quality management. He has more than 15 years of experience in product research and development and supply chain management in the communication industry. As of December 2020, he has successively served as the product director of Xiaomi Group’s mobile phone department and the director of the group’s staff department, responsible for Redmi mobile phone product line planning, hardware product system strategic planning and other businesses, and is known as the “Father of Little King Kong” in the industry.

Coolpad also introduced new capital. On October 4, Coolpad Group announced that it had signed a share subscription agreement of HK$833 million. This financing was led by SIG, an internationally renowned investment institution, and followed by Honghui Investment Co., Ltd. and other institutions and individuals. Among them, Honghui Investment subscribed 800 million shares, which were indirectly wholly owned by Chen Jiajun. “Since the end of last year, Coolpad Group’s financing in the capital market has exceeded HK$2.1 billion.” According to Chen Jiajun, “After the SIG subscription and warrants are completed, these funds will also be used for Coolpad to establish new business channels and expand lines. Online and offline business channels, as well as sales and marketing of the mobile phone business.”

How will it compete for a place?

With the return of the new Coolpad, the company’s new strategy has also surfaced. According to Coolpad’s plan, the company will start from three aspects: channel, supply chain and system innovation.

In terms of channels, Coolpad does not adopt the common distribution channel model in the industry, but a digital channel management model. Chen Jiajun believes that the distribution channel model established 20 years ago needs to go through layers of agents, which is costly and inefficient. Moreover, it is unsustainable to rely solely on hardware sales to earn the price difference. Digital channel management can change these pain points. “Our channel model can carry out big data management for the vast number of service stations, with high efficiency and low cost, and creatively share Internet revenue with channels, allowing partners to obtain more stable and long-term returns. More importantly, we It is based on active users in the entire region to share Internet benefits and policy incentives for service station owners, solving the problem of cross-selling that has plagued the industry for decades.” Chen Jiajun said.

The reporter noticed that Coolpad has increased its exploration of the sinking market. According to Chen Jiajun, “From June 2021, the channel construction of Coolpad’s township service stations has started, and so far more than 1,400 service stations have been established.” Behind the development of the sinking market, Coolpad’s mobile phone’s current positioning is reflected. In May of this year, Coolpad released its first mobile phone, the Coolpad COOL 20, starting at 699 yuan.

In the early days of Coolpad’s return, supply chain support was crucial, especially in the context of the lack of cores that swept the world. “We give priority to using domestic components for those with domestic components. Our mobile phones have achieved localization of 80% to 90% of components.” Li Yujing believes that there are several trends and opportunities for current chips. “The second-generation semiconductors will switch to the third-generation semiconductors. The third-generation semiconductors represented by gallium nitride and silicon carbide have entered everyone’s life, which is also an important area for our future layout.”

It is understood that Coolpad is currently trying a new supply chain cooperation model and joint research model. For example, write the name of the domestic mobile phone camera operating system supplier on the back camera of the mobile phone. Qin Tao, senior vice president of Coolpad, said, “We hope to let more people know the heroes behind the industry chain. Everyone only knows the mobile phone brand, which is unfair to the supply chain.”

At the mobile phone system level, Coolpad’s direction is to lead the next-generation operating system. “In the past six months, our Linux kernel core branch code contribution has ranked among the top 2 Chinese mobile phone brands.” Qin Tao said that in the future, Coolpad will continue to unswervingly invest in research and development on the operating system.

It is worth noting that when talking about Coolpad’s development goals, Chen Jiajun said bluntly: “Our goal is to return to the first echelon within three years.” It can be seen that Coolpad, which once occupied a place in the global market, is very ambitious to return to the domestic market this time, but in such a fiercely competitive environment, the final result remains to be verified by the market.

From the beginning of this month to October 15, Coolpad Group rose about 26.47%. As of the close on October 15, Coolpad Group closed at HK$0.43 per share, down 7.53%, with a total market value of HK$4.645 billion.

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