Five-year-old Xiaomi: What are the flaws, how to find a patch?

The most dangerous foam is often the brightest. Before the market slows down and cools down, every tech company should turn around from the buzz of passion and find its own flaws and patches.

There is nothing shameful about admitting flaws. Before the advent of Apple's iPhone, smartphones were synonymous with BlackBerrys. If you find your flaw early, Jim Bellsley, the father of BlackBerry, may have become Canada's richest man. In 2012, it wasn’t Apple but Samsung that defeated Nokia as the global mobile phone dominator. If you find your flaws early, Samsung will not be so painful in the past year, and it will continue to be crippled by apple and millet to erode market share.

The real strong are good at learning from their opponents, rather than taking risks in a popular bubble carnival. Without a store system, Xiaomi’s high-end strategy cannot be successful. Enter the field of smart homes, but all the hypotheses of Xiaomi are not established. It is a dead point for Chinese internet companies that they can't do their dirty work. Millet's flaws and patches not only gave Lei Jun's advice, but also gave a backlash to the so-called "Internet thinking."

One of the flaws: lack of store system

If Steve Jobs had a daunting “reality distortion field” on his body, Apple’s 437 stores around the world are physical versions of this twisted force field. Last year, through a follow-up survey of more than 200 retailers in the United States, Apple’s average sales per unit area ranked first, with average sales per square foot of $4551, more than 50% of Tiffany's average sales. , is 3 times that of Coach. On the other hand, Xiaomi emphasized that its advantage is light assets and no offline sales channels. In fact, this is precisely the flaw of Xiaomi.

Just as the iPod reinvented the music industry, the iPhone changed the mobile phone industry, and the iPad destroyed personal computers, the Apple Store also rewritten the retail industry. There is no doubt that Apple is one of the most successful retailers in the world. Starting this year, Apple will no longer disclose retail figures in its annual report. Therefore, this will be our last chance to sort out Apple's data for the past 14 years. This data allows us to understand how important the store is for the construction of the Apple brand.










In the 14 years from 2001 to 2014, Apple’s turnover totaled 835.5 billion U.S. dollars, of which stores’ cumulative contribution was 108.5 billion U.S. dollars, accounting for 13%. Apple’s profits totaled 176 billion U.S. dollars, of which 22.7 billion U.S. dollars came from stores, which is basically the same as the turnover. The peaks of these two proportions have not unexpectedly fallen in 2008, that is, the year when the global financial crisis broke out. It was also in that year that the iPhone sold more than 10 million units. In the 13 years from 2002 to 2013 (Apple failed to provide complete data for 2014), a total of 1.9 billion guests visited Apple Stores, with an average of 400,000 people per day, and each contributed an average of US$343 in turnover. .

If the success of the Apple store is reflected in how bright the sales figures are, it may be too shallow. The Apple Store has gone beyond the concept of a store and has gone beyond the concept of an experience store. Here, one of the most expensive commercial areas in a city is not a place to sell things, but a place where guests forget to return. Apple treats every visitor like a princess. In fact, only about one out of every 100 visitors actually buy Apple products. What are the other 99 visitors doing? Experience and experience every spice in apple flavor.

From Jobs's patented glass staircase, to the "Genius Bar" in hotels like the "concierge", to wireless checkout "experts" walking around in T-shirts, visitors feel that other physical stores cannot Feel the experience. With EasyPay, a self-service checkout function, consumers do not have to pay in line, and they can even buy a favorite product without saying a word with Apple employees. A brand willing to establish emotional connections with customers often has strong stickiness. This stickiness, which is loyalty, is the best catalyst for profit.

Earlier this year, Xiaomi released Xiaomi Note, which broke the pricing strategy of Xiaomi’s mobile phone for the past four years at a maximum of RMB 1,999. For the first time, Xiaomi made a tentative step toward a high-end market of more than RMB 3,000. Objectively, Xiaomi completed the integration of the low-end smartphone market in China in four years. To expand to the high-end market, this can be regarded as a pragmatic strategy. However, the more you go to the high-end, the more the store system becomes more and more important.

When Apple opened its first store in 2001, Apple's four products almost filled 6,000 feet of storefronts. At that time, it was predicted that within two years, the Apple Store would extinguish the lights at a painful and expensive price. Fourteen years later, the apple store's lighting has spread over more than a dozen countries around the world and has become a symbol of urban charm. In the establishment of corporate brand, the store plays a vital role. The store is a face of the brand. For Xiaomi, it is not enough to support Xiaomi’s high-end strategy by only relying on the home of Xiao Mei and hundreds of third-party repair sites.

The construction of a store requires a lot of investment. According to the data disclosed by Apple, Apple spent an average of US$370 million annually in retail sales from 2003 to 2014. This figure peaked in 2012 at $858 million. For Xiaomi, instead of spending big money on acquisitions of small technology companies, it is better to patiently build its own retail and maintenance system, so that the brand Xiaomi appears in the most expensive locations, appearing in the periphery of luxury goods stores. If retail business can contribute 10% of Xiaomi sales and profits, this is the best layout before the arrival of the winter.

The second flaw: All assumptions into the smart home are not established

Our home is the next major city that global technology giants are trying to take over. Last year, a report by the British Juniper Research Company predicted that by 2018 the global smart home market will reach US$71 billion. China's smart home market is a leader in the Asia-Pacific region.

Smart home is the third type of market that is tied with companies and individuals. Its product category is more complex than the first two types of markets. Therefore, it is unlikely that one company will dominate this market. Smart homes are part of the Internet of Things. Consumer electronics manufacturers such as Samsung have begun to promote their smart home strategy. The timetable established by Samsung is that by 2017, all Samsung TVs will become IoT devices, and all Samsung hardware devices will support the Internet of Things within five years. Samsung is the first mainstream consumer electronics manufacturer to provide complete smart home ecosystem products and technologies.

Xiaomi believes that smart home will use mobile phones as the only core and terminal. This assumption is not valid. The topological structure of smart homes in the future is likely to be decentralized. All electronic products are smart and do not need mobile phones to carry control functions. It is not only unnecessary to operate everything with a mobile phone. Even a connected phone can be realized by a smart watch. It's still a mystery what cell phones degenerate, but there is no doubt that the role of mobile phones will be greatly weakened, and their only value is the app.

Xiaomi's second assumption is that its operating system will help it gain a foothold in the smart home field. This assumption does not hold. Those trying to tap into the smart home market are the top tech giants such as Google, Apple and Samsung, and no one smart home maker will lock their operating system on Xiaomi. Third, Xiaomi believes that its huge smartphone user base will become a smart home user. This assumption is even less true. Consumers who can afford to use smart homes are definitely not Xiaomi’s current user base. According to a report from Tencent last year, the survey results for 50,338 valid samples showed that nearly 60 percent of the smart homes are willing to spend 50 million yuan to 10 million yuan.

Taking a single product into the smart home market is a logical strategy. Earlier this year, Google acquired Smart Thermostat manufacturer Nest for $3.2 billion. Google has the world's largest Internet search engine and mobile operating system, android, and through the Google Now voice assistant to open the joint of the two. Google has integrated Google Now in Nest, trying to control smart devices through human-machine interfaces such as voice. Apple has kept its strategy and mysticism. The HomeKit home automation platform released last year has not seen much progress so far, but Apple is obviously aiming to control the smart home platform. These international giants are eyeing smart homes. Xiaomi can only get his competitors out of a cell phone. I don't see this reason.

Among all products, cars and smart phones are the ones that have the most profound impact on human life. I suggest that we pay more attention to intelligent networking cars. According to statistics, 25 to 54-year-old Americans spend 1.2 hours a day in cars (China's figure should far exceed the United States), and it is expected that the number of connected car shipments in 2018 will approach 70,000 units. Since it is a smart home, since it is an intelligent connected car, why the key to open the house is not the car key?

Three flaws: dry can not be dirty work children tired

The universal nature of Chinese Internet companies is that they are unwilling to work hard and work hard. This is exactly their dead spots. On the line, they danced in a long-sleeved manner and made a lot of money. The offline business investment is large, the cycle is long, and the results are slow. Many companies that are keen on internet thinking are dead when they are offline. The same is true of millet.

The word "dead service" is the easiest to say. It is not difficult to write a book. The hardest part is to make these four words and do it. If you can't do it and don't make it, it's just "flicker." The realm is very high and the strength is very far away. Such companies are prone to collapse. In the past four years, Xiaomi's successful rapid expansion has benefited more from the growth of the smartphone market. However, in the process of growth, Xiaomi's internal strength has not improved. If we take the Lenovo Group as a reference, Lenovo, with its huge business opportunities in the personal computer market, has not given up its accumulated internal strength while vigorously marketing, and has taken a step-by-step approach to global PC hegemonism. In contrast, Xiaomi, today's advantage is almost exactly the same as it was three years ago. Apart from marketing, there is no other advantage.

I do not oppose Internet thinking. We must have Internet thinking but we must also have technical knowledge. I agree that "the pig will stand at the mouth of the air will fly", but the wind will come and go, the wind will stop also from time to time, the smart pig should start from the moment of the wind began to try to grow their wings.

Whether apple or millet, as long as it is a commercial organization, it is the same dictionary. Without sufficient profits, companies cannot have strong vitality. For the question of hardware not making money, Xiaomi's explanation is to make money from software. But if you look at Apple, revenue from software and services (including apple store and iTunes) accounted for only 8%, 9%, and 10% of net sales in the past three years. It can be seen that it is not easy to make money from software. Apple is such that Xiaomi cannot be an exception. In the smart phone industry, money still comes from hardware. For all manufacturers ready to enter the mobile phone market, this rule should be kept in mind.

A profitable customer is a good customer. If companies always maintain low-end customers, creating a beautiful ecosystem is useless because low-end customers lack spending power. They may be keen on mobile games, but they will not be users of smart homes.
It's a real test for millet to test high-end mobile phones. If Xiaomi can successfully erode the high-end users of Apple and Samsung, it is a very promising company. If the effect is not good, it is another matter. Mobile phones are more expensive than expensive. For people who can afford Apple, the price is not a problem. They bought an Apple mobile phone and bought the latest Apple mobile phone. One of the reasons that could not be opened was that Apple embodied identity and social status. Behind this is the complex mentality of the middle class in China eager to identify.

If you do not snatch Apple users, Xiaomi's outlook is not optimistic. However, how many people are willing to afford Apple to give up Apple to buy millet? This is not a guessing game. It takes time to answer this question. In any case, this is a hard-fought contest and a battle of life and death.

For giants such as Apple and Samsung, the Chinese market is more and more important. They may do something that foreign companies did not dare to do before. For example, starting from the end of March, Apple will launch its trade-in program for the first time in mainland China. Expanding its retail network in China is also one of Apple’s goals for the future. Samsung’s recent moves show that it intends to abandon its efforts in the low-end market, and in early March launched a curved screen and high-end mobile phone flagship products with mobile payment capabilities. It can be imagined that using technology as the touchstone, the competition of high-end smart phones will become extremely intense.

Xiaomi's advantage lies in seizing the growth of the low-end and mid-range smart phone market. The disadvantage is that the expansion is too rapid and there is no intention to cultivate its own core competitiveness. The competition for smartphones has become hot and has reached a point of terror. The last straw that killed the camels was not the low-end mobile phone market but also a few spoilers, but the general trend was gone and the camel was still dancing in the street.