Lei Jun broke through the psychological barrier of 3999 yuan, but Apple is still a huge mountain pressing down on top

11/03 2024 560

Lei Jun, the founder of Xiaomi, responded to the price increase of Xiaomi 15 in a live broadcast, stating that "3999 yuan is a psychological barrier for us". The current pricing of Xiaomi 15 above 4000 yuan is due to the ability to make the phone more refined. However, the market reality has shown many domestic mobile phone manufacturers that Apple's pricing sets the ceiling for them.

Domestic mobile phone manufacturers have attempted to break through the 4000 yuan pricing barrier years ago. At that time, another domestic mobile phone brand fell into a difficult situation due to TSMC no longer manufacturing chips for them, providing favorable conditions for domestic mobile phones to enter the high-end market. However, subsequent results proved unsuccessful.

During those years, many domestic mobile phone brands failed to break through the 10% ceiling in the high-end market, and their market share increased quite limitedly. Apple was the biggest beneficiary during that period.

In the Chinese market, Apple's share of the high-end mobile phone market once approached 80%. In the global high-end mobile phone market, Apple's market share also reached 70% again. The global high-end mobile phone market forms a duopoly between Apple and Samsung, with many domestic mobile phone brands showing no ability to shake Apple's position in the high-end market.

In view of this, many domestic mobile phone brands that originally priced their phones above 4000 yuan have reset their high-end phone prices to 3999 yuan. After the price reduction, these domestic mobile phone brands have achieved significant sales growth in their high-end phones. This reality proves that domestic consumers find it difficult to accept prices exceeding 3999 yuan for domestic flagship phones.

Apple's dominance in the high-end mobile phone market has never wavered. Even when domestic mobile phone brands achieved their best results in the high-end market, they captured less than 20% market share, while Apple still held nearly 60%. The combined share of all Android phone brands in the high-end market could not defeat Apple.

Of course, Apple also feels pressure, but when it senses that iPhone sales are not good, it drastically reduces prices. Last year, there were rumors of poor sales of the iPhone 15, and Apple subsequently reduced prices significantly. In March of this year, the price was reduced by 1500 yuan, and during the 618 promotion, it was further reduced by 2380 yuan. Whenever prices are reduced, iPhones sell well.

During this year's 618 promotion, when the iPhone 15 was significantly discounted, the starting price was once below 4500 yuan, which further suppressed the pricing of domestic flagship phones. Domestic phones priced over 4000 yuan are only a few hundred yuan cheaper than iPhones. Consumers will not hesitate to choose iPhones. It can be said that Apple's pricing is like a huge mountain pressing down on domestic mobile phones.

This year's 618 promotion also revealed a phenomenon: all domestic mobile phones that entered the top 10 best-selling list were Snapdragon 8G2 phones with prices ranging from 2000 to 3000 yuan. No new domestic flagship phones priced above 3000 yuan made it into the top 10 best-sellers, further highlighting that domestic consumers cannot even accept domestic flagship phones priced above 3000 yuan, let alone those priced above 4000 yuan.

Even a powerful company like Apple is also subject to price constraints. Previously, Apple continuously increased the price of the iPhone, and sales declined when the starting price exceeded 6000 yuan. Therefore, the pricing of iPhones in recent years has not exceeded 6000 yuan. Apple has had to compromise on pricing for the sake of sales. What can domestic mobile phones do?

Nowadays, many domestic mobile phone brands claim that the significant price increase of the Snapdragon 8 Ultimate Edition puts them under tremendous pressure, forcing them to break through the 4000 yuan price barrier. Regardless of their reasons, the market will ultimately give its verdict. After all, sales are still the most important for them. Without sufficient sales, a high price is meaningless.

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