The 1 billion bet made by Lei Jun and Dong Mingzhu in 2013 has been the most talked about anecdote in the technology circle in the past few years.
This year, there have been a lot of new developments in the bet between the two. One of the most important changes is that in the past it was a revenue duel between Xiaomi as a new economy company and Gree, an old manufacturing company; now it has become a competition between the two technology giants in terms of their contribution to the manufacturing industry.
In May, Lei Jun and Dong Mingzhu successively stated that they would renew their bet to promote "Made in China". In Xiaomi's 10th anniversary speech in August, Lei Jun brought up this topic again. Recently, Dong Mingzhu responded: "Lei Jun can't win"
"One billion bet" Because in the fifth year - 2018, Xiaomi's revenue did not exceed Gree's, Lei Jun also admitted that Xiaomi lost. But after renewing the bet, will Xiaomi lose to Gree again in smart manufacturing? Judging from Xiaomi's current progress in the smart manufacturing industry, it is very likely that Xiaomi will not fail again this time.
Xiaomi’s “intelligent manufacturing” cannot be underestimated
As a technology giant that has risen rapidly from the smartphone industry, Xiaomi also has A common problem among mobile phone manufacturers is that product production relies heavily on OEM and OEM production, and their own production capabilities are insufficient. There is nothing wrong with this in itself. After all, in addition to Samsung, industry leaders including Apple and Huawei also take the OEM route.
However, Xiaomi has two major flaws compared to other giants, which gives it more motivation to get involved in the manufacturing industry.
First, Xiaomi’s control and bargaining power over upstream manufacturers are not strong enough. Because of its rapid rise and short development time, Xiaomi's brand influence is actually not very strong among OEMs. For the same reason, Xiaomi is even more dependent on suppliers for core technologies. With the two superimposed, Xiaomi will inevitably be more vulnerable to upstream manufacturers
Second, Xiaomi's own profit margin is low, and it is difficult to do well in the foundry model. Before Xiaomi's impact on the high-end market failed to achieve results, the profit margin of Xiaomi's hardware products could only be maintained at an extremely low level. Therefore, after adopting the foundry model, Xiaomi could only reduce costs, including foundry manufacturing, while ensuring user experience. Fees, material costs and even research costs. There is always a tightrope to walk between user experience and cost, and Xiaomi will inevitably overturn occasionally.
These two problems that Xiaomi needs to face with its foundry model have long put it under great pressure, but at the same time they have also provided it with the opportunity to penetrate deeply into the industry chain. Strong upstream momentum. So a long time ago, Xiaomi launched an offensive in the manufacturing field. For example, Xiaomi launched the "Ecological Chain Plan" at the end of 2013, some of which are suppliers and OEMs.
Of course, it is only recently that Xiaomi has really made big moves in the manufacturing industry. At the World 5G Conference in November 2019, Lei Jun suddenly released a blockbuster news, announcing that Xiaomi's own "future factory" with an annual production capacity of 1 million mobile phones will soon be put into production. Lei Jun said that Xiaomi's future factory uses automated production lines, 5G networks, robots, big data and other technologies on a large scale. Its production efficiency is 60% higher than that of traditional factories, and it can automatically produce 60 mobile phones per minute on average.
In Xiaomi’s 10th anniversary keynote speech in August, Lei Jun said that the first phase of Xiaomi’s smart factory has been officially completed and put into production. It has a fully automated production line and can produce one million units per year. The "black light factory" of high-end mobile phones. The first product produced is the transparent version of the newly released Xiaomi Mi 10 Ultra Commemorative Edition. At the same time, he also revealed that Xiaomi Smart Factory will have a second phase in three years.
Recently, Lei Jun further stated that, except for the placement machine, all production equipment in the second phase of the smart factory are self-developed by Xiaomi or companies invested by Xiaomi. In other words, Xiaomi can not only build its own smart factory, but also develop and produce smart manufacturing equipment by itself. In the field of smart manufacturing, Xiaomi has reached the top and bottom.
Gree has a deeper foundation in intelligent manufacturing
As an old home appliance giant, Gree started from a higher starting point in the manufacturing industry than Xiaomi. a lot of. Therefore, although Gree entered the smart manufacturing track in 2013, with more than 20 years of manufacturing experience as a basis, Gree started with smart equipment.
After several years of development, Gree has developed key technologies in the fields of industrial robots, CNC machine tools, intelligent logistics and warehousing, intelligent detection, and automation integration. The independently developed high-performance servo motors and drives for industrial robots have reached the "internationally advanced" level, and the servo motor's power density, overload capacity and other performance indicators have reached the "internationally advanced" level.
In addition, Gree's intelligent equipment has entered the market while satisfying its own intelligent manufacturing transformation and upgrading, helping other manufacturing companies optimize and upgrade their products in intelligent manufacturing. In 2019, as an external export product, smart equipment brought Gree more than 2.1 billion yuan in revenue.
Compared with Xiaomi, Gree’s current achievements in the field of intelligent manufacturing are undoubtedly higher. Even in the first phase of the Xiaomi smart factory that has been put into production, it is difficult to say whether any smart equipment from Gree has been used.
However, competition in the field of smart manufacturing is completely different from traditional manufacturing. Manufacturing capabilities such as R&D, design, technology, and production are important, but in the era of smart manufacturing, manufacturing and sales The connection between services will be closer, so the capabilities of other aspects of smart manufacturing companies must also be fully considered.
Taking flexible production as an example, in order to adapt to more personalized market consumption trends, flexible production capabilities that can quickly adjust production according to market changes have become an essential skill for intelligent manufacturing companies. However, flexible production not only tests the ability to control production, but also tests the ability to control the market.
In a comprehensive intelligent manufacturing competition like this, who can win better between Xiaomi and Gree?
Will Xiaomi have a chance to surpass Gree in the future?
Comprehensive comparison of the supply-side control capabilities and consumer-side control capabilities of Xiaomi and Gree is actually a very interesting topic, because they each have asymmetry at a single level. Competitive advantage, but under comprehensive assessment, the development of intelligent manufacturing may be evenly matched.
In terms of manufacturing capabilities, Gree, which has exported smart equipment, has an absolute advantage over Xiaomi. After all, Xiaomi’s global shipments of mobile phones exceeded 100 million units in 2019, but the annual production capacity of Xiaomi’s smart factory is only 1 million units. In other words, Xiaomi’s self-produced production capacity covers less than 1 million units. For a long time to come, Xiaomi still cannot Get rid of the OEM model.
But in terms of market control, Xiaomi, which has been deeply involved in the Internet for many years, is also far from being comparable to Gree. Xiaomi Youpin, a subsidiary of Xiaomi, has become the leading e-commerce platform in China; Dong Mingzhu started to engage in e-commerce live broadcasts this year due to the epidemic, and Gree's online channel development has really improved. Comparing the two, it can be easily seen that Xiaomi has a significant lead in online consumption channels. Of course, marketing channels are only one aspect. Having Internet thinking, being based on Internet genes, and proficient in Internet gameplay are the essence of Xiaomi's ability to better control market changes.
The comparison and competition between Xiaomi and Gree can actually represent two different ways of playing the two camps of intelligent manufacturing.
Xiaomi, Alibaba, Tencent, Baidu, etc. belong to the cross-border flow of the Internet. They are generally more user-minded and more sensitive to market changes. They often work in cloud computing, artificial intelligence, and industry. They are better at advanced Internet technologies such as the Internet, but lack the technology and experience accumulation in the manufacturing industry
Gree, Midea, Haier, Hisense, etc. belong to the traditional manufacturing upgrading stream. They are often in the manufacturing industry. The industry has deep accumulation, but it is not very good at cloud computing, artificial intelligence and other technologies. Compared with Internet marketing channels, it relies more on traditional distribution and distribution channels. There are many layers of isolation between it and users, and it has no influence on the market. Change is relatively slow.
In the field of intelligent manufacturing, if we want to discuss the cross-border flow represented by Xiaomi or the upgrade flow represented by Gree, which one will win? So in the short term, it is obvious that players with upgrade streams will have greater advantages, but in the long run, I am afraid that Internet cross-border streams will overtake traditional upgrade streams.
In fact, in the sixth year of the "1 billion bet", it was also the first year that Xiaomi's smart factory started production - in 2019, Xiaomi's total revenue exceeded Gree, although this has little to do with the smart manufacturing of the two, it can be regarded as a sign.