Rebirth 08: Rise from copycat phones

Chapter 678 Full-Screen Phones with Under-Display Cameras!
The new generation of S22 series phones has been launched globally, but these days you can no longer see large numbers of people queuing up to buy them at Zhiyun flagship stores.

You can no longer even see large numbers of scalpers scrambling to buy up and drive up prices... There are still scalpers, but not many anymore.

The reduction in offline queues and scalpers is a result of multiple factors... it does not mean that the sales of the S22 series phones are low.

In fact, after the S22 series phones were launched, their new appearance, coupled with the advertised AI assistant mode, once again triggered a wave of purchases!

The number of pre-orders on the official online store and major e-commerce platforms is so large that it's reminiscent of the launch of the S15 Max and S16 series phones: a huge influx of pre-orders in a short period of time.

Meanwhile, major distributors are also shouting that there are too many orders and the stock is not enough, and they need more goods!
Although there weren't any exaggerated news reports about long queues, the S22 series phones actually sold out immediately after their launch, reminiscent of the launch of the S15 MAX and S16 series.

Back then, the S15 Max sold over 100 million units in its first year of release, more than both the standard S15 and the S15 Pro.

At that time, the S15 Max was extremely difficult to obtain. Even two or three months after its release, it was still available for purchase through a rush. Scalpers typically sold S15 Max phones at a premium of several thousand yuan.

The following year, when the S16 was released, the S16 Max continued to maintain high sales, and the even higher-end S16 Max Pro was also launched.

Meanwhile, the adoption of 3D face recognition technology in both the standard and Pro versions of the S16 has greatly stimulated the determination of regular users to upgrade and purchase new phones.

In 2016, the Zhiyun S series phones achieved peak sales... That year, the S series phones alone sold a staggering 250 million units! This does not include the older SX/SXL series that were being cleared out of inventory. If we include that series, the S series phones in a macro sense actually sold around 270 million units in 2016.

It will wipe out the entire world!

In addition to the A series, the C series phones were still in production and sales back then... In 2016, Zhiyun Group sold a staggering 320 million mobile phones, setting a company sales record that has yet to be broken... In reality, as the smartphone market entered a period of saturation, Zhiyun's mobile phone sales declined year after year.

The core objective of the Smart Terminal Business Unit within the Zhiyun Group for its mobile phone business is to maintain annual sales of 300 million units. In order to stabilize the sales volume of 300 million units, the company has also vigorously supported the SX/SXL series and the new brand Xinyun, which, to put it bluntly, means entering the mid-range market to maintain sales.

Unfortunately, the smartphone market has become a saturated market, declining year by year. There's no new market, and existing phone users are replacing their phones more and more frequently.

Many users of Zhiyun S-series phones really haven't changed their phones for four or five years or even longer... These die-hard users of old models, who absolutely refuse to change their phones, are driving the people in Zhiyun Group's Smart Terminal Business Unit crazy!
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Now, the newly launched S22 series phones from Zhiyun Group have adopted a brand-new full-screen capsule-style single-hole design, with a capsule-style camera layout at the top of the back, resulting in a huge change in appearance.

In addition, the touting of features such as 3-nanometer chips and AI assistants by Zhiyun Group has attracted many users of older Zhiyun S-series phones to upgrade their devices.

Especially for early users of the S15Max, S16, and S17 series... these three series are the three best-selling S-series phones from Zhiyun Group. At the same time, their performance was a bit overkill for the time, so much so that it is still sufficient for use today.

This has resulted in a large number of die-hard users of these three generations of phones... Even after so many years, many people are still stubbornly clinging to these three generations of models.

Of course, users have their own reasons... The phone's performance is still sufficient. If the screen breaks, you can replace it with a generic screen; if the battery runs out, you can replace it with a generic battery. It still works. There's no need to spend thousands or even tens of thousands of yuan to buy a new phone.

It's worth noting that although the Zhiyun S series phones are expensive, the vast majority of its users are not wealthy; the percentage of truly wealthy users is actually extremely low!

As for the reasons, it's a bit complicated. One simple reason is that most people can't afford a car that costs hundreds of thousands of yuan, but they can afford a mobile phone that costs several thousand yuan.

Ordinary people still care about those several thousand or even tens of thousands of yuan... He can afford the Zhiyun S series phone, but the replacement cycle is relatively long.

Another reason for the large number of holdout users is that the new models of the Zhiyun S series in the past few years have not been particularly innovative, and users lack the external motivation to upgrade.

This year, however, some changes have occurred... On the one hand, these three generations of models are indeed getting old, and most users, no matter how resilient they are, are gradually reaching the point where they need to replace their phones.

It's either too old and worn out, or the storage capacity is insufficient, or it feels a bit laggy.

On the other hand, the S22 series phones have a new look and features like an AI assistant.

As a result, many users thought that since their phones were old anyway, and the new phones that came out looked pretty good, they might as well just switch to them.

And the number of users who think this way is not tens of thousands or hundreds of thousands, but tens of millions worldwide...

Zhuyun Group has stocked up on a large quantity of S22 series phones, even setting a new record!

According to data reported by some news media, Zhiyun Group has placed orders for more than 100 million screens for the S22 series mobile phones with its suppliers. Among them, the orders for the screens of the two high-end versions, S22Max and S22Max Pro, reached 40 million and 20 million units respectively.

The stock of screens for high-end models has reached 60%.

This is also the main reason why Zhiyun S series mobile phones have achieved high revenue and profit in recent years, with its high-end models accounting for a very high proportion of sales.

Of the 100 million screens ordered, a large portion has already been put into production and used to supply the S22 series phones. The remaining tens of millions will be put into production and supplied to the market in the next month or two.

Zhuyun Group estimates that it will sell 100 million units, including inventory preparation before the market launch and production capacity for three months after the launch!
The goal is simple: to sell as many phones as possible during the peak of the new model's release and popularity, aiming to achieve a small portion or even more of the annual sales volume in just two or three months.

Otherwise, after a few months, when the market cools down, consumers will lose their impulse to buy, and the market will become a regular replacement market.

Of course, this also posed a huge challenge to the production of the entire S22 series of phones...

However, Zhiyun Group has the world's most advanced supply chain, and with technological advancements, the factory's flexible production capacity is also increasing.

In the past two months and the next two months, the core contract manufacturer that provides OEM services for Zhiyun Group, namely Weiku Industrial, has adopted a full-capacity production mode, with production lines running 24 hours a day... This period is also the busiest time of the year for Weiku Industrial, and it is also the time when the number of employees in its various factories reaches its peak.

After these busy months, we will enter a period of stable production.

Xu Shenxue did not handle these supply chain matters personally; instead, Gu Zhiming, the head of the supply chain, was responsible for them.

Gu Zhiming is quite adept at managing the supply chain!

Over the past decade, the intelligent supply chain he led the establishment of is the world's largest, most efficient, most technologically advanced, and even most rigorously managed supply chain.

This is a supply chain system with its own independent satellite communication network... It even has its own supercomputing center to manage the massive supply chain data.

The entire supply chain connects hundreds of factories, and the core equipment in these factories is even equipped with sensors that upload various key data such as output, yield, and efficiency to the supply chain system in real time.

Even if a small parts supplier in a third-tier city has a problem with its production line, the supply chain management center at the headquarters of Zhiyun Group can know immediately. The system will mark the problem immediately, contact the supply chain manufacturers for timely handling based on the severity of the situation, or activate the backup plan in time.

This supply chain includes not only the production module, but also parts transportation, finished product transportation, and sales.

The components from supplier A will be produced strictly according to the production orders issued by the supply chain system.

The logistics and transportation system will allocate vehicles or aircraft as needed to transport the goods to the next contract manufacturer on time.

After the three major contract manufacturers produce the products, they will arrange various means of transportation to transport the products to the designated locations according to the scheduled time and deliver them to channel customers.

After receiving the phone, the channel customer puts the product into the warehouse and then sells it. This warehouse entry and sales data will also be uploaded to the supply chain management center in real time. The system will know as soon as the phone is connected to the Internet and activated.

The supply chain system of Zhiyun Group is a comprehensive management system that manages raw materials, components, assembly, transportation, inventory and sales.

And it covers the entire globe! This is a supply chain management system that would make even four-star fruits drool!

Of course, they can only drool over it, but they can't imitate it...

Apart from behemoths like Zhiyun Group, it's actually difficult for other companies to emulate this level of supply chain... or even necessary to emulate it.

The reason why Zhiyun Group dares to invest heavily in such a top-notch supply chain system is that improving the efficiency of the supply chain by just a few percentage points can bring about cost savings of billions or even tens of billions of dollars.

For smaller companies, doing this would mean the money saved on supply chain costs would be less than the cost of supply chain investment... It's not worth it and completely unnecessary.

Many things are not necessarily better the more advanced they are; rather, they should be done according to the specific circumstances.

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With the S22 series phones selling well, Xu Shenxue was somewhat relieved... In recent years, the revenue and profit of the S series phones have remained stable, but sales have been gradually declining, which has been a source of concern for him.

After all, a continued decline in sales is never a good thing.

The S22 series phones are doing quite well this year, and there is hope that the sales of S series phones will stop declining year by year.

However, this is still not enough. To recreate the glory of the S15 Max and S16 series phones, it is necessary to launch top-notch technological innovations that can impress consumers and create a buying impulse.

In response, the technical team in the Smart Terminal Business Unit is betting on under-display cameras/sensors, attempting to create a truly full-screen phone: hiding 3D face recognition, cameras, and other sensors under the screen, completely abandoning the screen punch-hole technology solution...

Although they've come up with some kind of "smart capsule mode" to beautify the screen's punch-hole, it still can't change the fact that this isn't a true full-screen phone.

However, it's impossible for Zhiyun Group to abandon 3D facial recognition on its S series phones.

3D face recognition is a signature technology of the Zhiyun S series phones, and it is also an extremely secure and convenient unlocking technology. It is impossible to abandon it before a better technical solution emerges.

Previous under-display ultrasonic fingerprint unlocking solutions failed to replace 3D face recognition technology...

It requires 3D face recognition, a full-screen display without punch holes, and the image quality of the front-facing camera... and then you also need the screen to maintain a good display effect, which is very contradictory.

This places extremely high demands on technology...

In fact, other mobile phone manufacturers are also conducting research in this field, and some have even developed phones with under-display cameras. However, because they cannot balance display quality and front-facing camera image quality, they have not caused any significant market changes.

Engineers from the Smart Terminal Business Unit of Zhiyun Group have also conducted technical research in this field for many years, and now Xu Shenxue has received news that the technical team has obtained a technical solution.

Xu Shenxue, who was particularly concerned about this... or more precisely, about the sales of the subsequent S-series phones, personally went to the technical team's laboratory to see their technological achievements.

The head of the technical team introduced their research results to Xu Shenxue: "We have adopted a brand new material layer."

"When this material is used normally for display, it is no different from a regular screen display. However, when a specific frequency of current is applied, the internal molecular structure of this material changes, and it becomes transparent, with high light transmittance."

"Our idea is to use this coating material in the sensor area of ​​the screen, and change its display and transparency according to the current driven by different frequencies."

"When displaying normally, the screen maintains a normal current. When 3D face recognition and cameras are needed, the current of the screen coating in this area is changed to make it more transparent, so that the camera can capture high-definition images."

"In this way, normal display and switching between sensors and cameras can be achieved within the sensing area!"

"In our experiments, the results were outstanding and have reached the standard for commercial use!"

As he spoke, the person in charge gave a demonstration... It was just a lonely screen with a whole bunch of various parts and equipment connected to it.

As the demonstration began, the screen lit up and a short advertisement video for Zhiyun Group started playing.

Then, the display effect under different colors was demonstrated, which looked no different from a normal screen, and the image quality was still very high.

There was no visible color difference between the sensing area and the other normal screen display areas; they were seamlessly integrated, and no difference could be discerned. At least, Xu Shenxue's naked eye could not perceive this difference.

However, as the operator adjusted the equipment and changed the screen current in the sensing area, the sensing area stopped displaying and became transparent. Through this small transparent area, the lens of the camera behind it could be seen.

Subsequently, the experimenters performed 3D facial recognition unlocking and took photos.

Unlocking was very smooth, and nothing unexpected happened.

Next, we'll check the photo quality taken with the front-facing camera in this mode...

To make a better comparison, the researchers also used photos taken by the front-facing camera of an S22 Max Pro for comparison.

Xu Shenxue personally stepped forward and zoomed in on the photos for comparison... but he couldn't find any obvious differences between the two.

The imaging quality is great!
This means that the light transmittance in the sensing area is quite high, probably reaching a level close to that of glass.

After repeatedly comparing and examining the materials, Xu Shenxue exclaimed, "This material is quite good; it looks like it has already met the usage standards!"

"Can we start mass production now? What are the costs?"

Someone immediately replied, "Mass production is possible, but the yield rate is still low and the cost is relatively high. We've estimated that using this material to make a screen will cost an extra seven or eight hundred yuan!"

Xu Shenxue said, "The extra seven or eight hundred yuan in cost is not really feasible for the standard and Pro versions, but it is still possible for the Max and Max Pro versions!"

"When your business unit comes up with a plan for a new model, discuss it with the marketing department to see how to incorporate this new technology!"

"Now that the new technology has been developed and can be mass-produced and commercialized, we should find a way to use it!"

"Currently, all mobile phones have punch-hole screens; it's time to change that!"

Xu Shenxue is well aware that the smartphone market has now entered a saturated market, with sales gradually declining. A major reason for this is that smartphone technology has stagnated in terms of innovation... For several years now, the changes have been nothing but the same old thing.

Without new technologies and groundbreaking innovations, consumers will naturally ignore you, and the lifespan of mobile phones will become increasingly longer.

However, if an innovative technology were to drastically change the form factor of mobile phones, then consumers' enthusiasm for purchasing would surge again.

Now, this truly full-screen phone may become such a product!
Xu Shenxue is quite looking forward to this.

Even if the market landscape cannot be changed, it is still very important to further solidify the leading position of the S series phones and stabilize revenue and profits in the smart terminal market.

The smart terminal and content ecosystem business built around the S series phones can contribute $400 billion in revenue to Zhiyun Group every year. Even a company as powerful as Zhiyun Group cannot afford to give up this business.

(End of this chapter)