How to get the Meizu to go out of the difficult profitable vortex

Tencent Technology Wang Pan reported on January 25 that Mei Zhang, the founder of Meizu Technology, appeared in the company's annual meeting to deliver a new spring speech. He said that Meizu's sales exceeded 20 million units in 2015, and proposed that the company's goal in 2016 is "steady growth and profit generation." , advance into the IPO."
It is said that this is the first annual meeting of Huang Zhang, although the introverted Huang Zhang did not disclose more details of "stable growth, profit creation, and advance into the IPO", but its listing plan has already begun to take shape before this.
A month ago, Li Nan, vice president of Meizu Technology, announced the 2015 record in the media communication meeting: the total sales volume exceeded 20 million, and the annual growth rate was 350%. On the grounds of "satisfaction over sales", Li Nan also announced that Meizu will control its sales growth in 2016. It is estimated that the target sales will be 25 million units, which will only increase by 25% compared with the 350% increase last year.
On January 4 this year, Meizu Technology issued a statement announcing that it will lay off employees. The departments involved are not clear, and the layoffs will not exceed 5%.
Mei Yongxiang, president of Meizu, said in an open letter that behind the rapid growth, the current size of Meizu has grown to nearly 4,000. He explained the layoffs as saying that in order to build a good team, he quoted Jack Welch's 2-7-1 theory that Meizu could eliminate 10% of the tail each year.
The change caused by the return of the Yellow Chapter Meizu was once a company with a strong yellow chapter color, and always pursued the ultimate product, but did not care about other things besides the product, even sales, originally in their own world. Very moisturizing. It was not until the advent of Xiaomi’s mobile phone in 2011 that it caused a wave of turmoil on the calm lake of Meizu. However, the stubborn Huang Zhang left the waves from the outside world, and I did not move.
Another domestic mobile phone manufacturer Huawei is completely awakened, and it is also the end of 2013.
Meizu, who knows what to do, is indeed a bit late for his founder, Huang Zhang. I finally returned to the company in February 2014, and announced in September that the newly released MX4 mobile phone sold for 1799, which is 700 yuan lower than the high-cooled MX3. Meizu also released a new sub-brand "Charming Blue" in December of that year, which spoiled the market of thousands of smart phones.
It is not difficult to see that with the return of Huang Zhang, Meizu has obviously begun to follow the trend. Learn Xiaomi to take the high cost performance mode, launch the thousand yuan mobile phone brand charm blue, introduce Ali strategic investment, and then enter the high-end mobile phone market after Huawei Xiaomi.
The sub-brand positioning of Meizu mobile phone has also become clear. Charm blue is a youth product that is priced at the thousand-yuan machine market. MX is a mid-end with super cost-effectiveness, while PRO is its high-end brand. With the clear positioning of the brand, it is no longer surprising to prepare for the listing.
How to stabilize growth and create profits?
From the point of view of sales, Meizu Technology undoubtedly handed in a satisfactory answer in 2015, and its mobile phone sales surged by 350%, even surpassing ZTE in China. However, in 2016, the probability of its sales growth rate continuing to reach 350% is almost zero, and its actual growth rate is bound to be far worse than last year.
For the reason that 2016 growth target is not high, IDC analyst Yan Zhanmeng said, "Meizu knows to move forward, it is not so easy." There is no plan to do too much in overseas markets, and it is impossible to bring new quantities. The overall 2016 The strategy is no longer radical.
For Meizu, too much depends on the low-end mobile phone charm blue, its profitability has yet to be proved. It should be pointed out that the vast majority of Meizu’s 20 million sales still come from the thousand yuan brand mobile phone charm blue. According to statistics, from January to October 2015, Charm Blue, as the main product of Meizu in this price segment, has accounted for more than 70% of Meizu's total sales.
At the same time, the average market price of Meizu's mobile phone market dropped from 1,900 yuan in 2014 to 1,200 yuan in 2015. This has also been questioned by the outside world as Meizu is trading at a low price.
Some analysts believe that the current competition in the domestic thousand yuan machine market is becoming increasingly fierce, and even has reached the point of losing money and making money. Although Meizu’s sales have grown substantially last year, it is not easy for domestic mobile phone manufacturers to make a profit. From Meizu’s choice of layoffs, it can be judged that its current profitability is not satisfactory.
Guo Lingping, CEO of TCL Communication, pointed out in an exclusive interview with Tencent Technology at CES that Xiaomi is currently selling red rice mobile phones at the cost of mobile phone materials, while Charm Blue and LeTV are selling at a price lower than the material cost price. In other words, every time Meizu sells a charm blue mobile phone, it has a certain loss.
However, Li Nan, vice president of Meizu Technology, told Tencent that LeTV did have subsidies, but Charm Blue did not subsidize. Li Nan said that the charm blue is low-margin, but there will be a high-capacity version and a gift box to increase the gross profit.
Can high-end mobile phones help Meizu successfully go public?
An important reason for Meizu layoffs is that after the introduction of Ali investment, the company can grow rapidly, and then it may consider landing in the capital market, while layoffs can reduce expenses and help the company make a beautiful financial statement.
In the case that the low-end thousand yuan machine is difficult to make a profit, domestic manufacturers who have fought for hundreds of dollars have begun to discover that the high-end mobile phone market is still controlled by Apple and Samsung, and the vast majority of the mobile phone market profits are divided. But there are not many players with strength in this field.
As a result, Huawei and Xiaomi each released Mate7 and Xiaomi Note top version to target the high-end mobile phone market, and Meizu naturally did not want to let go of this opportunity. Meizu wants to go public, and can only rely on Pro5 and new high-end mobile phones to bring long-term profits to the company.
Li Nan had previously said that most of the funds invested by Alibaba in Meizu at the beginning of last year have not yet been used, and then a large amount of funds has become the basis for its development. "We will not use the charm blue to defend, and there will be great changes in the design of high-end products next year."
"I believe that Pro5 mobile phones do not have a benchmark brand in China's high-end mobile phone market." Li Nan said that Meizu PRO5 does not cost, not seeking sales, because Meizu's current monthly mobile phone sales of nearly 3 million units is enough to survive in the mobile phone market. .
However, its inherent brand image will still become a constraint for the company's development. Meizu had previously targeted high-end mobile phones of around 3,000 yuan. However, with the sharp price cuts in 2014 and the beginning of the confrontation with Xiaomi, its brand image has changed. People gradually began to equate "Meizu" with "price-performance ratio", which will be To some extent, it affects the sales of Meizu's high-end mobile phone PRO5.
According to the list of China's 400 richest people released by Forbes in October last year, the founder of Meizu Technology, Huang Zhang, was ranked 206th with the co-founder and president of Xiaomi Technology, Lin Bin, for 8.57 billion yuan.
After the news of Meizu’s listing, some media also compared it with Xiaomi’s current valuation, pointing out that Xiaomi’s mobile phone sales last year exceeded 70 million units, while Meizu’s more than 20 million units believed that its valuation should be Xiaomi’s. About 1/4 will cost more than $10 billion.
However, Xiaomi was successfully raised with a rapid growth of 45 billion US dollars. With the sales of mobile phones less than expected last year, the external doubts about its valuation decline are endless, and there are even reports that Xiaomi had a previous round of valuation. 2/3 tried to finance. Meizu also faces a slowdown in growth this year, so its valuation cannot be compared with the valuation of Xiaomi's high growth.
In addition, Xiaomi has not released Xiaomi 5 last year, relying on other models to rush to 70 million units. The number of mobile phones released by Meizu in 2015 has reached its peak, and will definitely decrease in 2016.