Can ZTE Mobile's high-level adjustments crack the operator's dependence?
When domestic mobile phone manufacturers were busy releasing new products, ZTE recently announced that it would replace the person in charge of mobile phone business. The veteran Yin Yimin took over Zeng Xuezhong as the general manager of ZTE's terminal business unit. Insiders pointed out that ZTE's coaching change is a decision made by ZTE mobile phones that they are not willing to fall in the domestic market and want to expand their influence in overseas markets, but this is not easy. ZTE once relied too much on the operator channel, and the under-open public channel construction was insufficient, which made ZTE's mobile phone decline with the decline of operators' channels. For the new management, how to get rid of the operator dependence is the key to the successful revitalization of ZTE.
High-level overall adjustment
On Monday, ZTE released a red-headed document, announcing that Yin Yimin, executive director of the company, is also the general manager of the terminal business unit, and is the head of the company's mobile phone business. Zeng Xuezhong, the head of the original mobile phone business who has served for nearly three years, will work as an EVP to assist Yin Yimin. . The relevant person in charge of the ZTE Marketing Department also confirmed this appointment.
This personnel adjustment is also the return of ZTE veterans. It is understood that Yin Yimin was one of the earliest founders of ZTE Mobile, which contributed to the construction of ZTE mobile phones from 0 to 1. Yin Yimin also mentioned in a letter to the mobile phone team, "I am very happy to return to the mobile phone business department after 14 years. I can work with you again. I feel very warm and look forward to working with you to develop and surpass."
The change in the head of the mobile phone business is only part of the overall adjustment of the entire ZTE management. In April this year, ZTE announced that Zhao Xianming was the chairman and president of the seventh board of directors of the company. Shi Lirong, the former president of the company, was no longer the president, but he is still a member of the board of directors of ZTE. In addition, the former executive vice presidents Tian Wenguo and Qiu Weizhao also changed. This round of personnel adjustment has also been seen by the outside world as the largest change since the establishment of ZTE, and nearly 30%-40% of the personnel have been adjusted.
This round of high-level adjustment is dominated by technical talents. It is understood that Zhao Xianming previously served as the CTO of ZTE, and is the leader of many ZTE technologies, such as long-term research and development of CDMA digital cellular mobile communication systems, and independent research and development of GoTa digital trunking systems.
Yin Yimin has been the R&D director of ZTE since 1991. He has been in charge of R&D, marketing, sales and mobile phone business in many fields. Many of ZTE's outstanding products come from his handwriting.
Kang Yi, editor-in-chief of the operator World Network, also said, “Yin Yimin has a strong technical background and is very good at product development. After serving as the general manager of the terminal business unit, it can enhance the strength of ZTE mobile phone R&D.â€
Mobile phone business step by step
In the mobile phone business, compared to Zeng Xuezhong, who is mainly responsible for the domestic market, Yin Yimin has a large amount of global operating experience and is also able to mobilize the company's overall resources. ZTE also stated in its internal open letter that the initiative aims to enhance the strategic position and management level of the mobile phone business. ZTE said that the management of ZTE will be renewed every three years, and the adjustment is in line with the company's normal practices.
However, in the eyes of the industry, the three-year term is about to expire, but more is still dissatisfied with the development of ZTE's mobile phone business. According to the data, the actual shipments of ZTE mobile phones in 2015 were 56 million units, which was less than the 60 million targets set at the beginning of 2015.
It is worth noting that ZTE’s domestic shipments in 2015 were only 15 million units, not only far from Huawei, Lenovo, and Xiaomi, but also in brands such as OPPO, vivo, Jinli, and Meizu. Zeng Xuezhong once admitted in his internal letter that the reason why ZTE did not complete the sales target was mainly in the domestic market.
Industry observer Hong Shibin pointed out that if ZTE is still selling 15 million units this year, it will not be said that the gap with other manufacturers will further widen, and it may even be surpassed by LeTV mobile phones that have been debuted for less than two years. In September, Feng Xing, president of LeTV Mobile, announced a set of figures, and the total sales of LeTV's super mobile phones exceeded 17 million. Previously, LeTV Mobile announced that its total sales volume of super mobile phones in 2015 exceeded 4 million. This means that in the first three quarters of this year, LeTV's super mobile phone sales will reach nearly 13 million.
For ZTE, the mobile phone business is still the top priority of the company. According to the semi-annual report released by ZTE, the revenue in the first half of 2016 was 47.757 billion yuan. According to the business, the operator network revenue was 28.735 billion yuan, and the government business revenue was 4.607 billion yuan, while the smartphone-based consumer. Business revenue was 14.415 billion yuan. The proportion of consumer business is second only to the operator network, and is the company's second pillar industry.
Excessive reliance on carrier channels
Once upon a time, "China Cool Alliance (ZTE, Huawei, Coolpad, Lenovo)" is almost synonymous with Chinese mobile phone manufacturers. Today, apart from Huawei's rising mobile phone market, ranking third in the world and China's first, the other three are struggling in the fierce market competition.
Hong Shibin pointed out that in the past three years of smartphone outbreaks, ZTE’s mobile phone failed to seize the opportunity to take advantage of it. Instead, it was chased by Xiaomi, OPPO, vivo, Meizu and other enterprises. There are two main problems: lack of branding. And publicity, on the other hand, is too dependent on the operator channel.
In terms of branding, Xiaomi has set a benchmark for cost-effectiveness. Huawei has created a mid- to high-end brand image, and LeTV has launched an ecological concept, while ZTE has failed to bring any new ideas to consumers. However, ZTE has made great changes in this regard. In May, ZTE announced that international piano superstar Lang Lang was the spokesperson of AXON's flagship series. At almost the same time, Nubia announced the signing of Cristiano Ronaldo as the spokesperson of Nubian brand image, and launched the concept of high-end business and fashion.
Channels are the root of the problem. In the past, 90% of ZTE’s shipments came from operators, while in e-commerce and open channels, ZTE’s development was slow. Zeng Xuezhong once rethought, in the era of functional machines, seized the core elements of operators and achieved the "China Cool Alliance"; in the popularization period of smart phones, cost-effective, good at online marketing has made Xiaomi; the replacement window since the second half of 2014 OPPO, vivo and Huawei, which have long-term precipitation under the online channel and pursued “light luxury†for work, have also succeeded; ZTE’s response has not been fast enough, and it has become too dependent on the operator’s channel. Later, it gave up too much to this market, but other channels have been built. It is not a day's work, this is a great lesson.
In ZTE's latest plan, we can also see that the terminal business's overall plan this year is to establish 3,000-4,000 stores nationwide, mainly for public channels, that is, to fill the short board. But to achieve this plan, not only a lot of money, but also a long time.
Lu Weibing, president of Jinli, once pointed out that “the Jinli offline channel is a store. We are close to 50,000 in China. In India, there are also 10,000 Indians who can be called Jinli employees. There are 1,000 Jinli employees in Nigeria. This time is very long and very hard."
In the fiercely competitive smartphone market, how to build a channel and ensure the balance in the sales of existing products is a difficult problem for Yin Yimin. In Hong Shibin's view, if ZTE can smoothly pass this period, it may re-emerge and become another Huawei, but if it is not handled well, it may fall further.
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