In the tech industry, cross-industry innovation is a common phenomenon. There are opportunities for mutual inspiration, learning, and collaboration between different sectors, as well as the potential for competition, challenges, and disruption. In recent years, the crossover between two major fields, smartphones and smart cars, has become increasingly prominent.
Particularly in the Chinese market, smartphone manufacturers like Xiaomi have announced forays into electric vehicle manufacturing. Huawei, on the other hand, has taken a different path by collaborating with Seres to develop Wanjie, while deeply cultivating the smart car business and achieving great success.
Meanwhile, in the automotive sector, Geely has taken a decisive step by acquiring smartphone manufacturer Meizu to create a better car-infotainment interaction system. NIO, on the other hand, has opted to manufacture its own smartphones and successfully launched its first product, the NIO Phone.
Manufacturers' frequent cross-industry moves inevitably lead to pondering: why do smartphone manufacturers choose to make cars, while car companies start venturing into the smartphone industry? What kind of business logic and social development trends are involved in this?
Xiaomi's foray into the automotive industry: Completing the final piece of the intelligent ecosystem puzzle
Xiaomi is an internet company with smartphones at its core, but its product range is diverse, covering multiple fields such as smart homes, wearables, and IoT, forming a vast intelligent ecosystem.
Xiaomi's vision is to "enable everyone to enjoy a better life through technology." To achieve this vision, Xiaomi continuously expands its product lines, from headphones and smartwatches to air conditioners and washing machines, even toothbrushes and hairdryers, constantly exploring new markets, meeting user needs, and even being jokingly referred to as the "Xiaomi grocery store."
In March 2021, Lei Jun, the founder, chairman, and CEO of Xiaomi Group, declared "battle for Xiaomi cars" during a launch event, officially announcing the company's entry into the smart electric vehicle field. Lei Jun stated that this would be his "final major entrepreneurial endeavor in life," expressing his willingness to stake all his achievements and reputation accumulated throughout his life on this project. He personally leads the team in the fight for Xiaomi cars.
Xiaomi's foray into the automotive industry serves as both a supplement and extension to its presence in the smartphone market. With the smartphone market reaching saturation, Xiaomi seeks new avenues for growth and profit. Smart electric vehicles present an excellent opportunity with promising prospects and potential.
Drawing on its technological expertise and user base in the smartphone domain, Xiaomi can develop a seamlessly integrated smart car that connects with its smartphones, offering users a more convenient and comfortable travel experience.
Next, Xiaomi's foray into the automotive industry represents a completion and enhancement of its intelligent ecosystem. Xiaomi has established an intelligent ecosystem covering multiple scenarios such as home and office, but it lacked the segment of smart vehicles.
Xiaomi's entry into the automotive sector can be seen as the final piece of the puzzle in its intelligent ecosystem, forming a comprehensive ecosystem encompassing individuals, vehicles, and homes, thereby creating more value and services for users.
Xiaomi's Strategic Approach to Automotive Industry
Firstly, it focuses on independent research and development, without collaborating with third-party automakers. Xiaomi believes that smart electric vehicles represent a completely new field, requiring development from scratch rather than simply adding smart systems to traditional vehicles. By independently researching and developing, Xiaomi aims to grasp the core technology and intellectual property rights of smart electric vehicles, establishing its own competitive advantage and brand influence.
From crucial components like power batteries and electronic control systems to autonomous driving technology and LiDAR, Xiaomi has made a series of investments surrounding automotive manufacturing.
Secondly, it prioritizes users. Xiaomi emphasizes that automotive manufacturing is a long-term investment, not driven by short-term returns and profits. Xiaomi's goal is to provide users with a high-quality and high-experience smart electric vehicle.
Thirdly, it adopts an internet-based mindset, breaking free from tradition. Xiaomi views smart electric vehicles as internet products rather than traditional industrial products. Xiaomi will apply internet thinking to create an open, shared, and collaborative automotive manufacturing platform, collaborating with various partners to innovate and progress together, facilitating rapid iteration and upgrading of smart electric vehicles.
At the same time, Xiaomi will incorporate the approach of mobile phone operations into electric vehicles, maintaining continuous interaction and feedback with users, creating a user-centric intelligent travel ecosystem, and providing more value-added services and scenario applications.
NIO's Expansion into Smartphones: From Intelligent Travel to Intelligent Living
NIO is an intelligent travel company with automobiles at its core, offering products such as smart electric vehicles, intelligent charging piles, and battery swapping stations, forming a complete intelligent travel ecosystem.
Driven by the vision of "making travel better," NIO continuously improves its product quality and service levels, while exploring new technologies and business models. In September 2023, NIO officially launched its first smart phone, the NIO Phone, entering the smartphone market. This move represents NIO's largest cross-border innovation in its history and its most controversial product launch to date.
NIO's venture into smartphones serves as a complementary and extended arm of its intelligent mobility ecosystem. While NIO has already established a comprehensive smart mobility ecosystem covering aspects like vehicles, charging, battery swapping, maintenance, and community engagement, it lacked a crucial component - the smartphone.
Smartphones, being indispensable smart terminals in daily life, can seamlessly connect with cars and other smart devices, forming a core hub for a more complete and robust intelligent network.
The move to create smartphones aligns with NIO's user-centric approach. Upholding a "user-first" philosophy, NIO focuses on understanding user needs and experiences, striving to enhance the quality of travel through technology. By producing its own smartphones, NIO can offer users a more seamless, secure, and efficient smart mobility experience.
Key strategic features of NIO's smartphone venture:
Firstly, it centers around automobiles and does not compete with other smartphone manufacturers. NIO emphasizes that the aim of creating smartphones is not to enter the smartphone market but to serve its own automotive users.
NIO's smartphones are exclusively tailored for NIO car owners and prospective customers. They will not be sold through other channels, nor will they engage in price or feature wars. NIO's smartphone serves as an intelligent terminal seamlessly connected to NIO vehicles, providing users with a more convenient and secure travel experience.
The second principle is to be driven by innovation, without being bound by tradition. NIO believes that the smartphone industry is an arena for innovation, requiring continuous exploration and breakthroughs rather than simple imitation and following.
NIO's smartphones feature unique designs and functionalities such as car control buttons, sky windows, and NIO Link, embodying NIO's innovative spirit and user-centric approach. NIO's smartphones also integrate with NIO's smart mobility ecosystem, including the NIO App and NIO Power, offering users additional value-added services and scenario applications.
Huawei's Smart Car Business Gains Momentum, Wajie Secures Sales Champion Title Again
Despite facing external restrictions last year, Huawei saw a significant increase in sales thanks to the outstanding performance of its new P60 series, propelling it back among the top five domestic smartphone manufacturers. In the automotive sector, according to Huawei's financial report released last year, the company has invested over 20 billion RMB. However, Huawei emphasizes that it will not manufacture cars itself but will instead empower and collaborate with automotive companies to produce high-quality vehicles.
Huawei's automotive business primarily operates through three modes: first, the component mode, where Huawei sells components to automotive companies for a fee; second, the HI (Huawei Inside) deep cooperation mode led by the Car Business Unit (BU), with vehicles featuring an "HI" logo at the rear;
The third mode is the "Smart Car" mode led by the Terminal Business Group, where Huawei leads in product definition, research, and design. Vehicles are sold through smartphone channels, with the representative brands being Wajie under the Sailce brand and ZhiJie under Chery.
Huawei's Smart Selection Mode is its most successful venture in the automotive sector. According to the latest vehicle sales data from February this year, WENJIE once again claimed to be "the top seller among new energy vehicles in February, retaining the monthly sales champion title."
Official figures show that WENJIE delivered a total of 21,142 vehicles in February, with the new M7 model contributing 18,479 deliveries. With enhanced features and improved value proposition of the new M7 model, WENJIE's sales have witnessed a significant surge, maintaining its competitive edge against other brands like Ideal Auto.
WENJIE is an intelligent automobile brand jointly developed by Huawei and Seres. While Huawei primarily provides solutions in intelligent cockpit and autonomous driving domains, Seres is responsible for vehicle research, development, and manufacturing.
Huawei's decision not to directly manufacture cars but instead collaborate with various automotive brands is a strategic move. Given the high capital requirement and risk associated with the automotive manufacturing industry, which may pose challenges for Huawei's non-financing model, the Smart Selection Mode allows Huawei to leverage its expertise in the smart IoT sector more effectively.
Geely's acquisition of Meizu aims to facilitate deep interaction between in-car systems and smartphones.
As early as July 2022, Geely, transitioning from traditional automobiles to smart connected vehicles, recognized the urgency of developing competitive in-car systems and even entire vehicle ecosystems. By acquiring Meizu, Geely aims to expedite the realization of deeper interaction between in-car systems and smartphones, thus completing the closed-loop of intelligent automotive systems.
In fact, what Geely values in Meizu is the user habits accumulated in the smartphone industry and the excellent interactive experience offered by the Flyme operating system.
"At the acquisition announcement, Li Shufu, Chairman of Xingji Era, stated, 'The future race tracks of the smart car and smartphone industries are no longer singular; they are not pursuing separate paths but are converging into an integrated relationship aimed at a shared user base, offering a multi-terminal, all-scenario, immersive experience.'
In March last year, at the 'Meizu ∞ Lynk & Co. Unlimited Ecology Launch Event,' Xingji Meizu Group unveiled the new generation flagship smartphone Meizu 20 series, the unlimited ecological system Flyme 10, and the first-generation Flyme Auto in-car human-machine interaction software, which will debut on the Lynk & Co. 08 model."
Last month, Meizu embraced the AI trend by announcing "All in AI," halting traditional smartphone projects to focus entirely on AI for next-generation devices. Additionally, Meizu unveiled detailed plans for its AI strategy, which include developing AI Device products, revamping the Flyme system, and building an AI ecosystem.
Several years ago, Geely began researching and applying AI large models. For example, the Geely Galaxy L7 infotainment system can generate wallpapers and create idiomatic stories using AI large models. Similarly, the Geely Galaxy E8 features various applications like "AI Voice" and "AI Time Engine." We eagerly anticipate how Meizu's investment in AI will be integrated into Geely's automotive products in the future.
In conclusion, Xiaomi's foray into car manufacturing, Huawei's collaboration with Cyrus, Geely's acquisition of Meizu, and NIO's venture into smartphones represent diverse cross-industry innovation strategies, reflecting different visions and goals among technology companies.
Xiaomi's entry into car manufacturing aims to complement its smart home ecosystem, enhance market share, and brand influence. NIO's smartphone venture seeks to enrich its smart mobility ecosystem, improve user experience, and user retention. Geely's acquisition of Meizu aims to enhance the development of in-car interactive systems. Meanwhile, Huawei's focus on developing the HiCar platform signifies its commitment to intelligent vehicle solutions. These strategies are based on insights into the intelligent market, aiming to address future changes and challenges.
We hope that manufacturers' cross-industry innovation strategies will foster healthy competition, enabling mutual learning and overall industry advancement. Let's anticipate the exciting products that future manufacturers will bring to the market.
