The slowdown in the real world has not slowed Huawei's pace.
Whether it is the pace of new releases or the speed of shipments ,Huawei terminals are still moving forward, the first half of the flagship HuaweiP40 series released in the country the day before, announced the national bank price, and also brought smart screen X65 and other new products, and then Huawei consumers BG CEO Yu Chengdong to love Fan, including a number of media interviews, mentioned that even if the epidemic is fierce, sanctions remain, but the growth trend has not been contained.
The interview, originally planned for one hour, has been extended to more than two hours due to Yu Chengdong's talkative and frank attitude. The technical background of Yu Chengdong basically knows nothing and doesn't like to play Taiji like the marketing or marketing background of executives.
Although the opportunity of the interview is due to the release of new products such as P40 series mobile phones, Yu Chengdong started the interview with memories:
Huawei's growth in the field of consumer business in the past ten years has been one or two hundred times, which can not be separated from your support. Huawei has been making network equipment in the past. In this field, there are only ten years (I manage consumer business). In the past eight or nine years, we are grateful for your support and love, as well as the support of consumers and partners. Let's start from A company that can't rank in China has grown into the second largest smartphone manufacturer in the world.
The epidemic did not affect the growth, and ecological products sold well
Ten years of 100-fold growth is the past, the focus of the current Huawei terminal is naturally P40 series. Last year Huawei under pressure, both the P30 and Mate 30 series still sold at 30 million levels worldwide. Huawei the bird-for-cage road continues, but now the global epidemic, let the entire mobile phone industry cliff fall, so how Huawei during this period? Yu said:
I've also learned that some consumers may delay purchasing products, but from the perspective of market performance, we have a lot of support and love for Huawei. So I'm very grateful to the consumers all over the country. In this difficult period, when you buy our products, you give us more support and help, and let us still have a good growth in the Chinese market in the first quarter.
Huawei mobile phones grew well in January, fell in February, and grew a lot in March, so we had a good growth in the Chinese market in the whole first quarter.
The rapid recovery of China's market and economy is also an opportunity. Of course, many export-oriented economies will be affected, but China's domestic demand market is very large, so we need some more innovative products. So P40 series products and smart screens are very competitive. We work at home and study remotely. Our large screen products, PC, tablet and smart screen, will increase in demand at this stage. So at present, the growth rate of our PC and tablet is very large, with more than 100% growth.
We are sure to maintain a good growth in the Chinese market this year. In the overseas market, it must have fallen. In the first half of last year, the overseas market grew rapidly. But in the first half of last year, because the growth rate was too strong, it fell to a very serious time in the second half of last year. Of course, you also know that the United States is still further sanctions. If such a very extreme event happens, it will have a great impact, which is hard to say. But if there is no further adverse event, our consumer business should maintain a good growth throughout the year, which we are confident.
Many third-party statistics also show that by 2020 Q1,Huawei and glory are the most resistant brands, and there are many factors such as Huawei product strategy, brand building and channel building credit for 8N strategy.
1 8N strategy 1 refers to mobile phones ,8 is PC、 smart watches, headphones, speakers, smart screen and other full-scene products, Yu Chengdong in the interview also introduced the sales of other products:
We sell one mobile phone and one other thing at the same time, so the proportion is at least 1:1, and the volume is very large.
Earphone, our earphone experience is very good, I have been using it in my bag. But many consumers haven't used it yet. They don't know that it's a good experience, so it takes time for it to be used by more and more users. Because now we need sound for wechat voice and video, some people can't disturb others with sound for sure. At this time, wireless headphones and noise cancelling headphones are also born. It's a great experience for everyone to take the subway, take a plane or have a fight on the road when they are outside.
I have always said that our future "8" volume will certainly be greater than "1". So we're "1 8" This "is a router connection, which is the ten product categories. We only focus on these 10 products. Other products AI、IoT these are for our partners.
P40 series of products are very strong and the cost is high
During the interview, Yu Chengdong's most voluble, or P40 products:
And the design we P40 is very distinctive, the only one in the world. our camera is also leading, our design is also very special, the whole industry is learning us. leading of our AI ability, etc. Simple stacking, so-called specifications of a certain index, can not create a real high-end brand. actually we also see some other manufacturers also want to do it, we also welcome. But what I want to say is that we need technology to lead and consumer support, otherwise it will not have sales. So we need to really have the brand and innovation can support.
And our cameras are far ahead of our peers. Our camera cost is also more than US $100, which is just the cost of this part of the camera, very expensive. In fact, the gross profit of the price we sell is very low. Our P40 Pro high refresh screen and our operating system kernel are optimized to be silky smooth and power saving. Our 90hz screen is smoother than the 120Hz experience. And charging. We need to ensure the safety. Our charging safety technology is obviously a lot ahead of others.
And you can see that the P40 mobile phone we released this time is 6.1 inch, but my screen is bigger than the 6.58 inch mobile phone, so the grip and endurance are very strong, and the experience is very good. So it seems that our price performance is very high. Although we are high-end products, our price performance still has obvious advantages.
Huawei's annual R & D cost is close to 20 billion US dollars. In the top three companies in the world, and in all companies in the world, I estimate that if this growth continues, it will probably reach the top one or two in 2020. The R & D cost issued by other manufacturers is not in the same order as us at all. They are increasing by several billion yuan, and we are spending 20 billion US dollars on R & D. I said that R & D investment and innovation are still for user experience, because other manufacturers, such as operating system kernel, can't optimize it at all. So to build a high-end brand, we must take the lead in high-end design and innovation, and truly bring subversion to the user experience. You can use our mobile phone to watch concerts, watch football games, take distant things, zoom, and take photos at night, which really surpasses the ability of human eyes.
A camera cost of more than $10 billion and a Huawei company's annual R & D cost of nearly $20 billion are particularly noteworthy. According to Yu Chengdong: the decline in Huawei gross margin is because the cost is growing too fast.
The annual report for 2019, released by Huawei, showed revenue of 858.8 billion in 2019, up 19.1% from the same period last year; net profit of 62.7 billion, up 5.6% from the same period last year; R & D expenses of 131.7 billion, up to 15.3% of revenue; and R & D expenses of the last four years (2016~2019) accumulated to 458.9 billion, accounting for 14.8% of total revenue for the same period.
"We can not use American devices"
This year, Huawei mobile phones are under pressure from abroad, on the one hand, because of the epidemic, on the other hand, because of the sanctions. That's why Huawei mobile phones have started from the inside to the outside, such as replacing GMS with HMS services, and more autonomy and "de beautification" of parts and components. So, how is this going?
Yu Chengdong said:
Huawei mobile phones include not only domestic devices, but also Japanese and Korean devices, as well as American devices, because different configurations are different.
We can not use American devices because we have made a complete replacement. But we still have a small number of American devices, because we have a cooperative relationship with American companies, and we continue to create a lot of business value with them, creating a lot of business and value for American companies. The current situation is caused by the sanctions of the United States Government, and we are still using the device of the United States because past partners have given us a lot of support, help and care for their business. It is certainly possible to achieve a complete replacement for American devices. Chinese enterprise ability is stronger and stronger, a lot of things can be done by themselves, we also give domestic manufacturers more opportunities.
The U.S. wants to impose further sanctions. I think this is a great damage to the global industry, because this society is interdependent. I believe that American companies can't do without China's things. Chinese companies can't do without the U.S. things. In today's globalized world, everyone depends on each other. If we oppose this, it will cause great damage to both sides.
As can be said ,Huawei has more than ordinary enterprises "counter-business ". If there is no sanctions ,Huawei mobile phone probability will become the first in the world. However, failure to become the first does not mean that Huawei have no other gains, Yu Chengdong said:
In the field of intelligent terminals. The US sanctions make us become a hardware company without ecology and a company with ecology.
We hope to become a great enterprise in the future, far ahead of the opponent. This is my dream and pursuit, we will persevere in the continuous efforts to struggle, I am stupid than others, but we can work harder than others, more enterprising, we are not afraid of backwardness, we have to continue to accelerate, our ability to continue to accelerate, eventually in all fields can surpass peers. You are not the first of every class, how can you be far ahead of the first, I ask my team to do the first of every class. I ask my team to strive to achieve first in every item, and our entire product may experience to surpass the opponent.