"It remains to be seen whether OPPO can regain lost market share through AI technology.""

@ New technological knowledge original

OPPO Hangzhou Global Headquarters Suspended? The Park Management Committee Responds That It Is Due to Plan Adjustments.

On November 28, market rumors suggested that the construction progress of OPPO's global mobile terminal R&D headquarters project in Hangzhou had stalled. In response, the management committee of Hangzhou Yuhang District's Future Science and Technology City (Haichuang Park) stated on the official platform of Zhejiang Government Service: "After investigation, it has been learned that the OPPO project has been temporarily suspended on site due to plan adjustments."

On October 12, 2020, OPPO acquired Plot 187 in Hangzhou's Future Science and Technology City for 1.184 billion yuan. At the time, OPPO announced its intention to build a global mobile terminal R&D headquarters. The total land area is 48,900 square meters, with a total construction area of 392,300 square meters, including a 37-story ultra-high-rise office building and a 6-story commercial complex. The project officially commenced in September 2021 and is expected to be commissioned in 2027.

In mid-June 2022, the management committee of Hangzhou's West City Science and Technology Innovation Industrial Cluster stated that excavation for the OPPO global headquarters project had begun. At that time, "both the TRD and rotary drilling pile construction for the project had been completed, and engineering pile construction was underway, with 60% already completed."

However, according to a report by the Science and Technology Innovation Board Daily, a field inspection in April this year revealed that after only two years, construction was still in the excavation stage and had not progressed to above-ground construction.

Regarding whether construction will continue and when it is expected to commence, on the morning of November 28, a reporter from the National Business Daily contacted OPPO for information, but OPPO did not respond. However, a source close to OPPO told a reporter from the Science and Technology Innovation Board Daily that given the current state of the real estate market and industry, OPPO, which also has ongoing projects in Shenzhen and Dongguan, will undoubtedly make more cautious considerations and not simultaneously undertake such a large number of major infrastructure investments.

01

Ranking Falls Out of Top Five

Recently, netizens have succinctly summarized the "life and death" status of 24 mobile phone manufacturers. Among these manufacturers, only six have survived, including Huawei, Honor, Xiaomi, OPPO, vivo, and Apple, although other brands also remain in the market. Netizens have sharply commented on OPPO phones: "16 years of consistent marketing, endorsements, and advertising have been successful."

After two consecutive years of a smartphone market winter, it is now almost certain that a rebound will occur this year. According to public data released by IDC on November 26, driven by pent-up demand for device upgrades, global smartphone shipments are expected to increase by 6.2% year-on-year in 2024, reaching 1.24 billion units. China's smartphone market shipments are expected to reach approximately 285 million units in 2024, a year-on-year increase of 5.0%.

Just as the domestic mobile phone market is showing vitality and major brands are experiencing sales growth, OPPO has become an unexpected outlier.

According to IDC's ranking of domestic mobile phone manufacturers' market share in the third quarter of 2024, vivo ranked first, followed by Apple, Huawei, Xiaomi, and Honor. Canalys' ranking was vivo, Huawei, Honor, Xiaomi, and Apple. Although there are discrepancies between the rankings of the two institutions, it is certain that OPPO is not among the top five manufacturers in terms of market share.

However, OPPO has performed impressively in the Southeast Asian mobile phone market. Market research firm Canalys revealed that in the third quarter of 2024, the Southeast Asian smartphone market grew by 15% year-on-year to reach 25 million units. OPPO led the Southeast Asian smartphone market for the first time with shipments of 5.1 million units and a 21% market share, primarily due to the redesign of its entry-level models A3x and A3.

Faced with increasingly fierce competition in the domestic market, mobile phone manufacturers experience varying fortunes. Undeniably, OPPO has fallen behind. OPPO has not always been in this position; in 2021, it topped the shipment rankings with 64.4 million units. Unfortunately, after being surpassed by vivo in 2022, OPPO's market share has continued to decline, and it has yet to reclaim the top spot.

02

Strategic Shift to AI

The loss of market position is due to various factors, and OPPO's internal strategies have been constantly adjusted in recent years. In 2019, OPPO announced the establishment of the chip company Zeku (ZEKU), and in 2021, it released its first self-developed chip, the MariSilicon X.

However, in May 2023, OPPO announced the termination of Zeku's operations. During the final all-hands meeting, Zeku CEO Liu Jun explained the reasons: "The global economy and mobile phone industry are currently extremely pessimistic," "The company's overall revenue is far from expectations," and "Such a huge investment in chips is unaffordable for the company."

In May of this year, OPPO also reduced the staff size of its XR business. However, given the uncertain outlook for the global XR market, OPPO's business adjustment is understandable. Additionally, internet giants such as Tencent and ByteDance have also made strategic adjustments to their XR businesses.

On the first working day after the Chinese New Year, OPPO's founder and CEO Chen Mingyong issued an internal letter stating that 2024 would be the first year of AI phones. In February, OPPO officially announced the establishment of an AI center, aiming to consolidate all AI-related functional departments within a single entity.

The OPPO high-end flagship Find X7 series also boasts several AI selling points, such as AI image removal, AI call summaries, and AI assistants. However, when combined with promotional terms like intelligence and large models, these features have not directly sparked consumer enthusiasm for upgrading their phones.

OPPO's newly released Find X8 series has a strong "Apple flavor," with AI being a standard feature. The Find X8 series' AI image assistant can automatically perform complex image editing operations such as glare removal, AI ghosting reduction, AI super-resolution, and AI object removal.

AI has evolved beyond being just a tool, playing a significant role in mobile phone operating systems, photography, battery life, and more. However, it may be premature to suggest that AI will accelerate the replacement cycle of smartphones. As for whether OPPO can rely on AI technology to occupy the commanding heights of the market share, it remains to be seen.