Android smartphones, due to the lack of hardware advantages like Apple's self-developed hardware, are similar to hardware assembly factories. The biggest difference may lie in the system level, and MIUI was the key factor that made Xiaomi stand out in the early days. However, now Xiaomi's system level is not as impressive.
The new energy vehicle track is very similar to the early mobile phone market, where hardware technologies such as engines are no longer the threshold for entering the track. Intelligent driving technology may be the key factor for Xiaomi to make a breakthrough in the automotive field.
Lei Jun's "Advance and Retreat"
Behind the frequent adjustments is the cold wind that Xiaomi faced in 2022. In 2022, Xiaomi's revenue and net profit both declined year-on-year for three consecutive quarters.
The bigger background is that the overall mobile phone market has not been doing well in recent years. According to IDC data, smartphone sales have gradually declined since 2017, and the first two quarters of 2022 even experienced the largest quarterly decline in history, with shipments declining by 14.1% and 14% year-on-year, respectively.
This means that the mobile phone market has shifted from an incremental market to a stock market, and the competition in the mid-to-low-end market, which Xiaomi relies on for survival, has become more intense. While Apple dominates the high-end market, Xiaomi has been struggling to grab a share of the cake.
Counterpoint data shows that in the third quarter of 2022, Xiaomi's shipments declined by 8.8% year-on-year. In addition, according to its financial report, its ASP (average selling price) dropped from 1081.7 yuan in the second quarter to 1058.2 yuan.
Faced with reality, Lei Jun is no longer high-profile. A year ago, Lei Jun stated that he wanted to take the first market share in the domestic high-end smartphone market. Now, Lei Jun says, "Benchmarking iPhone is when we seriously learn from iPhone and the beginning of our chance to surpass iPhone in the future."
In August 2022, at the Xiaomi Autumn New Product Launch Event, Lei Jun announced the latest progress of Xiaomi's car-making: "Xiaomi's autonomous driving will adopt fully self-developed algorithms, fully develop autonomous driving technology, and has already formed a 500-person autonomous driving research and development team. The initial investment is 3.3 billion yuan, and the goal is to enter the first camp of the autonomous driving industry in 2024."
Lei Jun emphasized that the reason for currently focusing on autonomous driving technology is because "there is a basic core judgment within Xiaomi that autonomous driving technology is the key point for the success of intelligent vehicles."