Where do the "huge profits" of low-end mobile phones come from?
For such low-priced smartphones, the average hardware profit margin is still around 15%, which is much higher than that of domestically produced smartphones. The average profit level of mobile phone brands. In addition, the pre-installation of software APPs with hidden traps has contributed about 30% of the profit margin to low-end mobile phones, becoming the economic pillar of huge profits for low-end mobile phones!
The hardware cost of an iPhone 6 is only 1,227 yuan, and the hardware cost of a Samsung Note 4 costs less than 1,600 yuan, and it is an open secret that high-end mobile phones such as Apple and Samsung are making huge profits. In fact, huge profits are not exclusive to high-end mobile phones. Low-end mobile phones also have hidden huge profits. A mobile phone that sells for about 500 yuan can make a profit of up to 200 yuan, which can be described as a huge profit.
It’s a lie that hardware doesn’t make money
After Xiaomi launched its first-generation mobile phone, Lei Jun said that Xiaomi’s first-generation mobile phone sold for 1,999 yuan, and the hardware didn’t make money. At this point, Xiaomi’s so-called unprofitable thinking of hardware has left a deep imprint in the public mind. When Xiaomi's financial report was released to the public, we suddenly discovered that Lei Jun's claim that hardware does not make money was a beautiful lie.
According to the data shown by Xiaomi, the full-year sales in 2013 were 31.6 billion yuan and the net profit was 3.46 billion yuan. In other words, Xiaomi’s profit margin on hardware is close to 11%. Obviously, Xiaomi hardware is profitable, but the profit is slightly thin compared with high-end brands such as Apple and Samsung.
In 2013, the average price of Xiaomi mobile phones has dropped to Prices of domestic brands' smartphones below 1,000 yuan are also showing an overall downward trend. At the end of the year, the master plans to launch a 499 yuan 4G smartphone, and Honor's 399 yuan mobile phone is already under development.
It seems that smartphones priced at less than 500 yuan have little profit. In fact, according to mobile phone practitioners in Shenzhen Huaqiangbei, if the shipment volume of a smartphone priced at 499 yuan reaches tens of millions, the profit of a single mobile phone hardware will be high. It will be about 80 yuan; the shipment volume has reached 5 million, and the profit of a single mobile phone hardware is about 65 yuan. Based on this figure, the profit margin from the hardware of a 499 yuan low-end mobile phone is about 13-16%.
Due to the low price of low-end mobile phones, it is not difficult to exceed 10 million sales. Through volume, low-end smartphones can usually maintain a profit margin of more than 15% compared with domestic mobile phones. Compared with the brand's 10% profit margin, the profits of low-end mobile phones at the hardware level are still considerable. In addition to hardware profits, low-end mobile phones have even more profits from the software chain.
Gray. Software profit chain
It is no secret that software pre-installation and machine flashing will bring a certain amount of profit. However, the government has always been a mystery as to how lucrative the software pre-installation is. The supervision of pre-installation is increasing, but edge-playing behavior continues, making the gray software benefit chain more mysterious.
The smart phone software benefit chain is usually divided into two parts: explicit and dark. It is pre-installed with a customized version of ROM and some application software, and the price is clearly marked. Dark refers to the pre-installation of some APPs containing SP attracting codes, or APPs that collect user privacy, and the price is opaque.
On smartphonesIn the industry, the cost of pre-installing customized ROM is not high, about 8-15 yuan per mobile phone. Some daily-use apps cost even less, ranging from 0.5 yuan to 5 yuan. According to Li Wanqiang, the former vice president of Xiaomi, some navigation, input method, browser, social networking and other application software hope to pre-install the software on Xiaomi mobile phones, and each mobile phone will be given a subsidy of 1-4 yuan. In total, the pre-installation fee for public software on a smartphone is about 20 yuan, and the maximum will not exceed 30 yuan.
In contrast, those undisclosed software pre-installation fees have considerable returns. Specifically, the pre-installed apps hidden in the dark are also classified in very detail.
1. Collect privacy APP pre-installation: Collect information such as user age, address book, geographical location and activity range through APP pre-installed on smartphones, and upload it to the server. This is collectively referred to as collection Privacy apps are pre-installed. Pre-installing such APPs reduces the risk and the profit return is not high. A single mobile phone costs 5-8 yuan.
2. Advertising pop-up APP pre-installed: During the process of using the mobile phone to surf the Internet, some advertisements may pop up automatically and disappear automatically when clicked. The reason why smartphones have advertising pop-ups is also due to pre-installed APPs. Free e-books and some tool apps usually have advertising pop-up codes. The risk of pre-installation of advertising pop-up APP is not high, and a fee of 2-5 yuan is given for a single mobile phone.
3. Pre-installed APP with built-in SP fee-absorbing code: I believe many users have experienced this. Their mobile phones subscribed to some SP services inexplicably and lost dozens of dollars in phone bills. The bane of automatic subscription to SP services is that some pre-installed apps will automatically trigger the built-in SP attraction code and automatically complete the subscription once a certain function of these apps is used. The pre-installation risk of APPs with built-in SP malicious attracting code is higher, and the profit return is also relatively high. A single mobile phone is charged 10-15 yuan.
4. Pre-installation of malicious game deduction APP: compared with public pre-installed mobile phones Compared with the subsidy of 2-5 yuan per game client, pre-installed game APPs with malicious deductions areHuge profits. Many pass-type mini-games have built-in paid pass functions, and users will trigger the paid function if they are not careful. The risk of malicious pre-installation of the game's charge-off APP is not high, because the charge-off function has a prompt, and a single mobile phone will give a fee of 10-20 yuan.
Usually, the number of pre-installed apps on a smartphone is about 30-50. The subsidy for pre-installation of the light and dark apps is about 200 yuan. Some APP developers will also share the deduction amount with mobile phone manufacturers, which allows smartphone software pre-installation to receive higher subsidies.
It is true that the smartphone only sells for 499 yuan, which is already very low. However, for such a low-priced smartphone, the average hardware profit margin is still around 15%, which is much higher than the average profit level of domestic mobile phone brands. In addition, the pre-installation of software APPs with hidden traps has contributed about 30% of the profit margin to low-end mobile phones, becoming the economic pillar of huge profits for low-end mobile phones!