The stagnation of TCL Communications on September 30, 2016 due to the stagnation of overseas business and the continued sluggish share price, the withdrawal of Hong Kong stocks was seen as a decision to promote change more openly. Today, two years have passed, and TCL Communication is still in trouble.
In the two years after the delisting, TCL communication became "scarred", and the failure of TCL mobile phone transformation brought heavy losses, layoffs, huge losses, and "selling" equity took turns. At the end of last year, Li Dongsheng was even forced to personally serve as the CEO of TCL Communication, and his out-of-control situation seemed to be controlled.
According to the 2018 semi-annual report issued by TCL Group, TCL Communication has significantly reduced its losses in the past two quarters, and its North American business is still profitable. However, it is worth mentioning that such achievements are mainly the result of cost reductions, and it seems that there is no optimism about the future.
As one of the earliest players in China's mobile phone industry, TCL is now a role abandoned by the times, unable to keep up with the development trend of smart phones, and it is difficult to maintain the final position of the domestic market. No one knows, how much hope does TCL mobile phone have in the future?
In terms of knowing, there are good people who have raised such a question - "TCL, can you make a mobile phone?" In reality, Li Dongsheng must have thought about this problem, and it may be more than once.
The "baton" of change is constantly waving, but the results seen are bleak. When Huawei, Xiaomi, OPPO, Vivo and other domestic brands rise strongly, TCL has clearly become a lost member. "The company is big, the direction is wrong, it is very troublesome. It is a little unbelievable to watch the company lose every day." A former employee who witnessed the decline of TCL communication sighed to the times.
The decline period he referred to was 2016, which was the “falling event” of TCL Communication, and the signs of going downhill became more and more obvious. In addition to the privatization of delisting, a revolution has undergone brewing, the end of the process, the beginning of a hasty, and the end of the grass, which has greatly affected TCL communications, and has not recovered.
In December 2015, after leaving Huawei, Yang Lan airborne TCL Communication, serving as the chief operating officer of TCL Communications and the president of China. Yang Wei is good at "philosophical marketing". Well-known examples include Samsung's "Heart-World-W" series, as well as P7 "Junzi Rulan", Mate 8 "Jazz Life", which marks Huawei's successful entry into the high-end market.
The reason why Li Dongsheng chose Yang Lan is that he hopes that the latter can implant "Huawei experience" into TCL and promote the brand image of TCL mobile phone to high-end. The restructuring, the high-level exchange of blood, and the brand transformation plan started under the leadership of Master Yang. The outside world is waiting to see how Yang Hao reversed the dilemma of TCL mobile phones in China.
Li Dongsheng has high hopes for the transformation of Yang Lan and TCL mobile phones. He even bluntly wants to rebuild the competitiveness of TCL communications in the Chinese market. Under the leadership of Yang Lan, TCL put forward the brand concept of “Tout Comme La Vie Like Life”, and launched TCL 750 mobile phones and self-portrait beauty for the four different consumer groups of T, C, L, and V. Mobile phone TCL 520 and "Swords and Hearts" TCL 950 for business people. Whether it is brand tonality, product configuration, or selling price, it has improved several grades than the previous TCL mobile phone.
Brand reshaping is a “long-distance run” that takes time and requires constant capital investment, but Li Dongsheng is obviously eager to see results quickly. Affected by the sluggish overseas mobile phone situation and the restructuring of China, TCL Communication's performance in the first half of 2016 showed a sharp decline, and in the year it rushed to close with a large number of layoffs and losses of more than 1.1 billion. At the beginning of the following year, Yang Lan resigned from TCL Communication.
"The arrival of Yang Lan has made the change of TCL mobile phone possible, but the time given by Li Dongsheng is too short." In the view of industry observer Liu Buchen, the series of changes led by Yang Lan is based on longer-term business considerations, which will inevitably It will increase the investment in a short period of time and increase the losses, but this is in contradiction with Li Dongsheng's hope to quickly improve the operation of TCL Communication.
It is undeniable that the implementation and effectiveness of the new strategy will take time to accumulate. More than a year is not enough to change the situation of TCL mobile phones. What's more, Huawei's P series has been used for 28 months from P1 to P7, and the Mate series has also been used for 20 months.
"The arrival of Yang Lan is an opportunity for the TCL mobile phone. His desire to change is very strong, and he has worked hard, but unfortunately the opportunity has not become a reality, because the time is too short."
Some industry veterans have also stressed to Times Finance that TCL and Huawei are different. When Huawei P7 launched "Jazz Life", it was in a rising period. At this time, it launched a product with high-end business, and the timing was right, but the TCL mobile phone The style of the product is more difficult to match with life like a sword. What's more, the mobile phones made by home appliance companies generally have a stereotype of "low grade, no technical content".
The key battle was rushed to the end, and under the difficulties of internal and external affairs, Li Dongsheng had to personally take charge of the seal.
Unable to support the Chinese market
Unable to attack the domestic market has always been the heart disease of TCL communication. It is necessary to know that as the first batch of enterprises entering the mobile phone field, TCL mobile phones once reached the top domestic mobile phone market many years ago, and brought 80% of profits to the entire TCL Group. Li Dongsheng said that "the mobile phone saved me."
The turmoil in the Chinese market in 2016 reflects the urgency of TCL Communications' desire to get rid of excessive dependence on overseas markets. Before the delisting, TCL Communication has experienced a performance dip in overseas markets. In the first half of 2016, due to the downturn in overseas markets, its performance in Europe, the Middle East and Africa, and Latin America fell sharply.
In recent years, overseas markets have always been the focus of TCL communications, with total sales and sales in major markets such as North America, Latin America and Europe accounting for 70% to 85%. According to research firm Gartner, in 2015, TCL communication mobile phone shipments were 79 million, ranking fifth in the world, and maintaining the top sales of Chinese mobile phone manufacturers overseas.
However, there is a great hidden worry behind the brilliant data--the imbalance between the intelligent machine and the function machine. In the era of smart phones, the sales of TCL Communication's function machines is still larger than that of smart phones, but most of its smartphones are entry-level, which causes its ASP (average sales price) to fluctuate between 30 and 50 US dollars for a long time, and the profit is low.
In the overseas market, TCL once again thought of the domestic market, but in fact, the domestic market is the "dysentery" of TCL mobile phones for many years, and the repeated "drugs" have not been cured.
A similar situation has been staged in 10 years. In 2008, TCL Communication's overseas sales were in trouble due to the financial turmoil. TCL once invited Yang Xingping, who has the title of "Father of China's Smartphones", to help him tide over the difficulties. . It is worth mentioning that Yang Xingping's "boutique strategy" attacked the domestic 3G market is still advanced today, but Yang Xingping only stayed for more than a year in TCL Communication. Since then, TCL Communication is still dominated by overseas business.
Entering the era of smart phones, the Chinese market is full of vitality. In 2011, with the rise of Xiaomi, Huawei and other domestic brands, domestic mobile phones finally ushered in the second spring. At this time, TCL took advantage of the competitive 1000-yuan market. But unfortunately, its pace seems to always be slow.
TCL's series of mobile phones, such as Dongdong Gun, Mo Mo, and Le Fun, which have been launched in response to the trend of Internet mobile phones, have failed to make a big splash in the market. Entering 2016, the domestic mobile phone market began to show a trend of branding and high-end, no longer dominated by the low price segment. At this time, TCL Communication's transfer of the gun head for brand upgrade and transformation is obviously a step later. In the absence of advantages in channel and product strength, the rapid transition in a short period of time made TCL unable to return.
In fact, since returning to the domestic market, TCL's products and channel strategies have always focused on operators. “The strategy at that time was to ship, and the goal was to achieve the top 5 in China. Operators have rebates, and sales will be easier.” TCL Communications The city manager told Time Capital that until the arrival of Yang Lan, TCL mobile phones turned to open market channels.
However, in 2014, the channel structure of the Chinese smartphone market was abrupt, and 4G became popular, and operators no longer subsidized terminals. In that year, the sales pattern of China's smart phones also changed, from 70% of operators' channels to 40% of operators' channels, 35% of offline channels, and 25% of network channels. In the next year, the online market became saturated, and the new market has become an offline open market dominated by third- and fourth-tier cities. In China, the operator channel is no longer the “iron rice bowl” of mobile phone manufacturers.
A mobile phone user who used to be a member of the TCL Iron Powder Community told Time Finance that it has been using TCL mobile phones since 2013 and lasted for more than three years. For TCL's product launched at the time, he commented: "As a domestic brand, its own production line, workmanship is OK. But in the choice of materials, subject to cost, durability is poor, more importantly System optimization did not persist, performance dropped too fast." In his view, TCL did a lot of function machines before, and did not keep up with the pace of entering the smart machine era.
In addition to channel and product issues, brand aging is also an important reason why TCL mobile phones are difficult to revitalize in the local market. For a long time, TCL Communication has implemented a dual-brand strategy. The overseas market is mainly supported by the Alcatel brand acquired in 2004, and the domestic market has always been the main brand of TCL.
The TCL brand has also been brilliant in the early 21st century, but the mobile phone market at that time does not require high-tech technical support. It only needs to quickly introduce functional machine products to the market, and it can get a place with diversified marketing gimmicks. Even some manufacturers even have factory tests. Do not bring the product to market. It is not difficult to see that the success of mobile phone brands including TCL in that era is more accidental.
However, in the era of "the radish is fast and not washed", the quality of TCL mobile phone products has been successively in question. It is said that the repair rate of 3-6 months is as high as 50%. “TCL mobile phone overdrafted its brand in the most brilliant time”, Liu Buchen said, from this time on, the image of TCL mobile phone in the hearts of the public has plummeted.
Nowadays, when it comes to TCL, the first impression of the outside world is home appliance enterprises, and home appliance companies generally lack the genes for doing mobile phones. From Konka and Skyworth to the recent Gree, there are no successful cases in which home appliances companies can do mobile phones. In the current mobile phone market, which needs to fight for R&D and technology, it is more difficult for home appliance companies to compete with mobile phone manufacturers.
TCL mobile phones have been difficult to find in the domestic offline stores. Times Online has found that in the TCL official mall, only two models of mobile phones are on sale, namely TCL 750 and BlackBerry KEYone, all of which are priced at over 3,000 yuan. ;inJingdongIn the "TCL mobile phone" search page of the mall, most of the presented are entry-level smartphones under 600 yuan; in the Tmall mobile communication flagship store, there are only two models on sale (TCL 950, TCL V760), display The price is 1899 yuan and 1299 yuan respectively. For the phenomenon that only two models are on sale, the customer service indicates that the goods are out of stock and the old models have been discontinued.
TCL's Li Dongsheng and Lenovo's Yang Yuanqing have too many similarities. Even on mobile phones, they have the same style. Both of them hope to see results quickly, and both are keen to acquire.
After the first glorious time, TCL acquired Alcatel, which became the main force of TCL communication in the next ten years. Judging from the performance of TCL Communication in the past few years, if you did not acquire Alcatel, TCL probably fell silent as many early domestic mobile phone brands. It is no exaggeration to say that Alcatel has made TCL communication alive.
In terms of feature machines and entry-level smartphones, TCL has Alcatel. As for the high-end market that has been delayed, TCL has two acquisition cards.
In January 2015, TCL Communications acquired the Palm brand from Hewlett-Packard. In December of that year, it also obtained a long-term license to use the BlackBerry brand. At this point, TCL Communications operates a total of three brands, TCL, Alcatel and Blackberry.
Multi-brand strategy is also the main strategy of China's smart phone manufacturers. Counterpoint research director Yan Zhanmeng pointed out in an interview with Times Economics that the entire mobile phone market has been relatively slow to change since 2015. In this case, technology cannot quickly promote mobile phone sales and Development, therefore, it is necessary to market for different users through different sub-brands, different product designs, and different channels.
In other words, sub-brand or multi-brand strategies can help mobile phone manufacturers expand their markets. However, unlike Huawei, Xiaomi and OPPO, many brands of TCL are acquired through acquisition. The other brands of the above-mentioned manufacturers are brand-new brands. After gaining a foothold in their own brands, they target market segments and specific A brand established by the consumer group. In contrast, the cards held by TCL are aging and weak.
Since the domestic failure in 2016, BlackBerry has become the main layout of the TCL mobile phone business in the domestic market, but today, the smart phone with keyboard has been out of the mainstream aesthetic, and the BlackBerry is more like a niche brand with a sentimental route. It is difficult to capture a day. Statistics show that in 2017, the annual shipment of BlackBerry was only 850,000 units.
Market research firm Counterpoint analyst Shobhit Srivastava pointed out to Times Financial Analysis that the main problem with BlackBerry is price. For the user, the same price can have a better choice and a higher configuration. "The security features are not enough for some users to pay a higher price."
As for Alcatel, Shobhit Srivastava believes that ASP is difficult to improve is the main challenge. "In the mature North American market, consumers have improved their psychological price for mobile phones, but they chose other brands instead of Alcatel."
Compared with North America, Alcatel faces more challenges in other overseas markets, including the threat from Chinese mobile phone manufacturers to accelerate their expansion. Yan Zhanmeng pointed out that Alcatel is currently being affected by the competition of OPPO and vivo in the Asia-Pacific region, and facing the threat of Huawei and Xiaomi in the European market.
According to the mobile market report released by Counterpoint in the second quarter of 2018, Huawei (including glory) and Xiaomi ranked among the top five in the European smartphone market with 21% and 5% market share respectively, whether it is the smartphone or function market in Europe. Alcatel (including TCL and BlackBerry) were not seen in the top five, while in the same period last year, Alcatel still ranked fourth with 4% of total shipments. In the Asian market, in addition to Samsung, Huami OV has occupied half of the country.
In addition, Palm, which has not had a new move since it was acquired by TCL in 2015, has a comeback. This year, news about the recovery of Palm, the mobile phone brand acquired by TCL, will be heard. But the latest development is that a foreign startup has obtained Palm's brand license from TCL and released a super mini Palm Android phone.
"The acquisition of Plam has been useless. First, there are ideas for entering the US market. Second, I want to use it to negotiate the negotiation of Alcatel's renewal cooperation." A former employee of TCL Communication Marketing told Times Finance.
It is understood that TCL's acquisition of Palm is limited to brands and does not involve employees and patents. To some extent, this is TCL's plan to truly own its own international brand, because both Alcatel and Blackberry brand licenses are time-limited.
Therefore, even if TCL communication holds multiple cards, each brand has more difficult problems and it is difficult to make further breakthroughs.
Li Dongsheng has been in charge of TCL Communication for nearly a year, but TCL's mobile phone business has not shown any obvious signs of recovery.
TCL Communications publicly stated that it will continue to improve its operating performance, reduce costs and increase efficiency, increase gross profit, control operating costs and improve operational efficiency in 2018; optimize business processes, improve liquidity turnover efficiency; improve product strength, focus on product lines, and increase single products Sales; improve mobile Internet service capabilities, enhance competitiveness; build technical advantages in communications related fields such as AI and 5G.
But at the moment, there are not many actions to be taken. In fact, the business of mobile phones has come to the present day, and the importance of R&D and technology has become more prominent. "There is technology for research and development, product for technology, product for market, and market for enterprises. Therefore, whether a company can ultimately develop depends on technology and R&D." Liu Buchen concluded.
Since the beginning of this year, the domestic four mobile phone oligarchy Huami OV has been particularly fierce in mobile phone innovation: screen fingerprint recognition, three-camera mobile phone, “very scary” GPU Turbo technology, Dual-Turbo technology, and abandoning Liu Haiping’s dual track Periscope structure, automatic lifting camera and so on.
For mobile phone manufacturers, in order to stand out from the crowd, in addition to brand marketing and channel management, it is necessary to increase participation and establish advantages in design, supply chain management and even chip design. But for TCL, these are still shortcomings.
In order to mitigate the impact of loss of communication performance, on September 30, 2017, TCL Group transferred 49% of TCL Communication to HK$490 million to introduce strategic investors with industrial background and business resources. Compared with the delisting a year ago, the valuation of TCL Communication's nearly half-equity sale has shrunk by 90%.
In the first half of 2018, TCL Communication achieved sales revenue of HK$4.66 billion, accounting for 8.95%, down 32% year-on-year, while Huaxing Optoelectronics, TCL Electronics and TCL Appliances each accounted for more than 20% of sales.
According to the restructuring plan, the future TCL Group will reconstruct the market value with Huaxing Optoelectronics as the core. Currently, TCL Group intends to split the consumer electronics terminal business into the Hong Kong TCL Multimedia listed company platform. This means that TCL communication is expected to be integrated into TCL Electronics (formerly TCL Multimedia), and to some extent, TCL Communication's position in the company is being marginalized.
Like many current technology companies' ideas and plans for future development, mobile phones and other terminals will be an important entry point for future smart home, Internet of Things and other concepts. They will not give up their mobile phone business and support themselves because they do not want to miss opportunities.
Yu Chengdong, CEO of Huawei's consumer business, predicted that there will be only 3-4 mobile phone manufacturers in the world. Although it is too early, the mobile phone market is beginning to show a trend of increasing brand concentration, while the market share of other brands will only be squeezed.
In front of the TCL mobile phone that has been eagerly chasing, the window of the new era of mobile phones may be slowly closing.