NIO Mobile is gearing up for a sprint.

When it comes to "crossover vehicle manufacturing," one of the most successful cases that comes to mind for many is Xiaomi, whose first pure electric sedan, the Xiaomi SU7, released at the end of last year, sparked immense discussion. Market data shows that the Xiaomi SU7 received over 80,000 pre-orders within 24 hours of its announcement, marking a rapid momentum.

Meanwhile, many automakers have also attempted to enter the smartphone market, such as NIO, which unveiled its first smartphone, the NIO Phone, at the NIO IN 2023 event, also generating significant buzz. However, unlike Xiaomi's foray into the automotive industry, the market has been quite concerned about the arrival of the NIO Phone, with the crucial issue being that many consumers do not believe automakers can make good phones.

(Image source: NIO)

NIO CEO William Li is quite serious about making phones, not only mentioning the plan to "launch a phone every year" on multiple public occasions but also considering phone manufacturing as an essential part of building the NIO ecosystem. Recently, the NIO Phone 2 quietly obtained a network access license, and it might make its debut at this year's NIO Day.

Although the NIO Phone hasn't been as successful as the Xiaomi SU7, it remains one of the most successful cases of automakers crossing over into the smartphone market. With its successor model即将发布, can the NIO Phone 2 help NIO find its place in the mobile market?

Pricing Strategy Adjusted: NIO Phone 2 Aims to Be the Main Device for Car Owners

In fact, the first-generation NIO Phone was not as terrible as everyone imagined. With features like the Qualcomm Snapdragon 8 Gen 2 Premium Edition, 16GB+1TB storage configuration, and a 50MP triple camera setup, it boasts mainstream flagship hardware specifications. Therefore, as an iterative model, the NIO Phone 2's configuration is bound to develop towards the "top-tier" direction.

For the core specifications, the NIO Phone 2 is expected to be equipped with the Qualcomm Snapdragon 8 Gen 3 Premium Edition, which debuted on the Nubia Red Magic 9S Pro series. The main difference from the standard Snapdragon 8 Gen 3 is a slight increase in core frequency, theoretically leading to more powerful performance. The storage solution should offer a new 24GB+1TB version, as large memory has begun to become prevalent, and it's not impossible to use 24GB of RAM if "packing in powerful features" is the goal.

The biggest design change in the NIO Phone 2 remains the front screen, which has shifted from the curved screen of the previous generation to a quad-curved screen with equal depths on all four sides. The specific style can be referenced from the Xiaomi 14 Ultra. It must be said that despite the criticism received by the NIO Phone, NIO's design and aesthetics are still quite on point. The screen size remains similar to the previous generation at 6.78 inches, featuring a Samsung E7 display panel with a 2K resolution and support for LTPO dynamic refresh rate.

(Image source: 9to5Google, NIO Phone 2 test scheme)

Another point mentioned in the network access certification is the 100W fast charging. Although it does not explicitly state that the NIO Phone 2 will support wireless charging, considering that wireless charging is a rigid demand for NIO car owners, this generation theoretically won't eliminate wireless charging either.

In terms of camera, the NIO Phone 2 will likely continue with the previous generation's triple camera setup, featuring a 50MP primary camera, a 50MP ultra-wide-angle lens, and a 50MP telephoto lens. However, with all flagship models focusing on telephoto capabilities this year, and the primary and telephoto cameras of the first-generation NIO Phone clearly lagging behind the mainstream, NIO must prioritize imaging if it wants to maintain its flagship status.

The biggest issue with the first-generation NIO Phone was pricing, with a starting price of 6,499 yuan, significantly higher than the 5,999 yuan of the contemporary Xiaomi 13 Ultra. Even though NIO car owners can choose to use points for offset, it doesn't amount to much savings. It is revealed that the NIO Phone 2 will add a storage option to lower the starting price, returning to the average level of flagship phones, estimated to be 5,999 yuan for the 12GB+256GB version.

(Image source: NIO)

Comprehensively, the competitiveness of the NIO Phone 2 is not too evident, especially with flagship phones from various brands piling on features and fiercely competing on prices this year. Brands like OPPO and vivo have also introduced new AI concepts, attracting many consumers to upgrade their phones, including some NIO car owners. William Li once mentioned that NIO's intention in making phones is to provide a better option for iPhone and Android users who own NIO cars, but if the NIO Phone itself lacks product strength, even NIO car owners may find it difficult to justify the purchase.

Sprinting into the Mobile Market: It's Time for NIO to Go All In

After NIO, several automakers have also begun to enter the mobile market, such as Polestar and Hongqi. Although their models are similar, the latter relies on the Meizu mobile phone team, practically eliminating the need to devote much effort to phone manufacturing. However, NIO is different; while the NIO Phone bears some resemblance to OPPO, it is a complete and independent product line.

Looking back at the market performance of the first-generation NIO Phone, it's not difficult to discern NIO's predicament in the mobile market. The NIO Phone is primarily marketed for its seamless integration and intelligent interconnection with NIO cars, a selling point that has garnered many positive reviews among NIO car owners and tech enthusiasts. As a first-generation product, the NIO Phone still has certain deficiencies in hardware configuration and software optimization, leading to its inability to secure a larger market share amidst fierce competition.

(Image source: NIO)

More importantly, the sales model of the NIO Phone has planted hidden dangers for NIO's development in the mobile market. Unlike Xiaomi's entry into the automotive industry, where even non-Xiaomi users can freely purchase its vehicles, NIO only serves NIO car owners, significantly limiting its sales. As mentioned earlier, the NIO Phone is a relatively independent product line, meaning it requires investments in design, research and development, hardware procurement, and algorithm development, undoubtedly increasing expenses.

William Li has also responded to the sales issue of the NIO Phone, acknowledging that it is basically difficult for NIO to achieve profitability in phone manufacturing.

It can be said that this is a significant difference between automakers' crossovers into the mobile market and mobile phone manufacturers' crossovers into the automotive industry. In comparison, automakers' demand for phone manufacturing is to serve their existing customers, with little interest in expanding to new users or ordinary consumers in the mobile market. However, NIO's plan for the NIO Phone is to update it annually. If this product line consistently fails to turn a profit, it will also impact NIO itself.

Lei Tech speculates that the sales approach of the NIO Phone 2 may not be as strictly limited as the previous generation, such as opening an official store where ordinary consumers can also purchase NIO phones. The best approach would naturally be to draw on the successful experiences of other tech brands, expanding market coverage through a combination of online and offline sales models.

The inherent advantage of the NIO Phone lies in its clean system, which is a relatively rare 0-ad system in the current mobile market. Moreover, it is rumored that the system optimization is assisted by OPPO's ColorOS team, ensuring a certain level of smoothness and functionality. If NIO chooses to open up sales, the NIO Phone can still attract some consumers who demand a clean system, gradually converting them into NIO car targets. In fact, Xiaomi SU7's ability to achieve over 80,000 pre-orders within 24 hours is also inseparable from the years of accumulated Mi Fans.

(Image source: NIO)

If NIO wants to continue launching a new phone every year, it's time to consider new avenues.

Relying Solely on "Car Fans": Can the NIO Phone Plan Succeed?

The update pace of the NIO Phone is actually consistent with that of the iPhone. Although there are no standard and Pro versions, a new model is still launched annually. However, William Li later revealed that NIO Phone would initially attempt to produce three generations, with success hinging on actual performance.

As mentioned earlier, the primary service scope of the NIO Phone remains NIO car owners. Therefore, when William Li mentions "looking at performance," he likely refers to the sales of NIO cars and the support rate for the NIO Phone among NIO car owners.

NIO's 2023 annual financial report shows that its total revenue was 55.618 billion yuan, an increase of 12.9% year-on-year. In 2023, NIO delivered 160,038 vehicles, an increase of 8.2% from the previous year. From the delivery data, NIO's growth continues, laying a solid foundation for the development of the NIO Phone.

(Image source: NIO)

However, Lei Tech also found that there is a considerable amount of information about the first-generation NIO Phone on second-hand trading platforms, with most sellers being NIO car owners. This indirectly reflects that the NIO Phone does not seem to have convinced NIO car owners to use it as their main device, which somewhat deviates from NIO's original intention in making phones.

(Image source: Xianyu)

For the NIO Phone to maintain its updates, the key lies in two aspects: first, refining the product to make the NIO Phone inherently competitive in the market, such as collaborating with leading global supply chain partners like chip manufacturers and screen suppliers; second, understanding the core needs of NIO car owners beyond vehicle-phone interconnection, such as imaging, AI, and gaming performance.

Ultimately, as a phone, the NIO Phone may not have too many flaws, and its successor, the NIO Phone 2, will also be a standard flagship model. However, how to serve its audience is a crucial part. We also believe that with continuous iterations and upgrades, NIO will become more proficient in phone manufacturing, with technological innovation and services increasingly considering consumers' actual experiences. But whether the NIO Phone 2 can change the market and users' perceptions will only be revealed on its launch day.

Source: Lei Tech