Mr. Shi Zhenrong, the founder of Acer Group, proposed the famous “SmilingCurve†theory in 1992 to “recreate Acerâ€. According to this theory, the most lucrative areas are concentrated at the two ends of the value chain – technology, R&D and brand, market, assembly, and manufacturing at the bottom of the curve, which is the lowest profit level.
In terms of manufacturing capabilities, China has been strong enough to have no rivals. China produces 60% of the world's cement, 45% of steel, 50% of glass, 25% of cars, 40% of ships, 70% of smartphones, 90% of laptops, 80% of air conditioners, 65% of refrigerators. ......
However, as revealed in the “smile curveâ€, assembly and manufacturing are only at the bottom of the value chain. Without the core technology and market brand capabilities, after consuming a lot of manpower and material resources, the manufacturing company can only obtain the profit of Weibo. Objectively, you can only "make clothes for others."
Although China's color TV industry (the whole machine enterprise) has achieved a breakthrough in technology and market in the past five years, while the scale and market coverage have been continuously improved, the profit level has been continuously lower, and it has not completely bottomed out from the "smile curve". walk out.
Nail Technology noted that in 2012, the profit rate of the six major domestic color TV companies was still around 3%, but this data has been declining in the past five years, and the profit margin in 2017 is only about 1%.
According to Ovi Cloud.com, the volume of retail sales in China's color TV market in 2017 was 47.52 million units, down 6.6% year-on-year; the retail sales volume was 163 billion yuan, up 4.5% year-on-year.
If the retail sales amount is 163 billion yuan and the profit rate is 1%, the overall profit of the color TV machine industry is only 1.63 billion yuan. It should be noted that at present, there are more than 20 brands (including Internet brands) participating in the competition in the color TV market, and the average profit per family is less than 100 million yuan. In fact, industry profits cannot be equally divided, and the head brand will occupy most of the industry's profit share, and most brands will be in a state of low profit or loss.
Color TV companies do not make money, so many brands are struggling, and some Internet brands even delisted directly. However, the difficulty of the whole machine enterprise does not mean that the industry chain is in a difficult situation. In fact, the panel companies in the upstream of the industrial chain earned a lot of money in 2017.
According to Nail Technology, LCD panels began to increase in price from March to April 2016, lasting 14 months. The price of some peak sizes rose by 90%, and the overall price reached 40%.
The price increase of the panel is also transmitted to the whole machine market. Nail Technology noted that the price of LCD TVs rose by 12% in 2017, and the average price rose from 3,200 yuan at the beginning of the year to 3,500 yuan at the end of the year. However, it is obvious that the increase in color TV sets is not as large as the panel increase.
From the point of view of profit, the days of panel companies are very rich. In the first three quarters of 2017, the profits of the world's six major LCD panel factories reached 11 billion US dollars. The consulting firm estimated that the full-year profit in 2017 will reach 14 billion US dollars - 15 billion US dollars, close to 100 billion yuan!
The profit of the whole color TV machine industry is less than 2 billion yuan, the total profit of the six panel companies is nearly 100 billion yuan, and the profit of panel companies is 50 times of the profits of the whole machine enterprises!
The color TV industry must be sustainable and healthy, and the panel companies should not be allowed to be unique. The color TV enterprises must raise their profit levels as soon as possible. Ding Shaozhi, the founder of the economic observation and the founder of Nail Technology, believes that to improve profitability, color TV companies need to pay attention to the following five points:
The first is rational competition. Under the condition that the profit rate is very low, we must resolutely put an end to the simple and rude price war, and do not take the old road of "sacrificing profits for the market" to avoid harming others.
The second is to focus on high-end. Focus on 55-inch and 65-inch large-size high-end markets, accelerate the upgrading of new display technologies, accelerate product structure adjustment, and increase the profit margin of single products.
The third is to unite upstream. The panel is a heavy asset industry. The whole machine enterprise can strengthen the alliance with the upstream through self-construction and shareholding in real time, and enhance the industrial early warning and risk control capabilities.
The fourth is to broaden the profit model. Based on the current status of smart TV popularization, color TV enterprises should develop from a pure hardware profit model to a profit model of soft and hard, and increase the operating income of the OTT.
The fifth is to expand overseas markets. The domestic market is basically saturated, and the focus of the incremental market can be tilted overseas. It should be noted that the OEM's approach is still that there is only a lack of profit on the scale. It is necessary to strengthen the global layout of its own brands and enhance the brand premium level.
The “smile curve†is terrible for the current color TV manufacturers, but as long as they insist on technological innovation, insist on developing their own brands, and the industry forms a relatively consistent action goal, then walk out of the bottom of the “smile curve†and occupy the ends of the curve. High value is not impossible.
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