Golden September and Silver October, major manufacturers have started a new round of "blood battles" in the mobile phone market.

On October 24, OPPO released the Find X8 series, including the Find X8 and Find X8 Pro, with the main selling point being the phone's entry into the AI era.

However, judging from the actual launch event, OPPO's promotional focus for the Find X8 series still revolves around traditional hardware aspects such as thickness, weight, chips, and screens, lacking intuitive feel for the system-level AI features it emphasizes.

Can OPPO, which once aimed to pursue high-end products, rely on AI to make a remarkable comeback?

1. OPPO sales decelerate

After a two-year downturn, the global smartphone market is gradually recovering, emerging from the cold winter.

According to the latest report by IDC, a globally authoritative research institution, global smartphone shipments in the third quarter of 2024 increased by 4% year-on-year, totaling 316.1 million units, marking the fifth consecutive quarter of growth. Among them, domestic mobile phone brands performed prominently, occupying three of the top five spots in shipments.

Canalys' report also indicates that the Chinese mainland's smartphone market is improving overall, with vivo rising to the top of the market share rankings due to growth, while Huawei's share has also soared.

Canalys analysis suggests that vivo's new mid-range products have stabilized offline channel sales, while Huawei maintains flagship product sales through active channel strategies.

However, the joy and sorrow among manufacturers do not seem to be interconnected. Amid the overall recovery of the mobile phone market, other manufacturers are immersed in the joy of improvement, but OPPO has not leveraged this trend to achieve growth; instead, its sales have continued to decline. Whether in terms of product lines or business layout, OPPO's (including OnePlus) performance seems unsatisfactory, gradually slipping from a leading position and even falling out of the top five.

The latest reports from Canalys and IDC, two major market research institutions, reveal that in the just-concluded third quarter, OPPO's (including OnePlus) share and shipments in the Chinese smartphone market have fallen out of the top five, ranking only sixth.

Recent data shows that OPPO's current market share is 9.68%, down from 10.60% in the previous two weeks. If examined separately, the decline mainly comes from OPPO, with its share falling from 9.77% to 8.84%, while OnePlus's share increased slightly from 0.83% to 0.84%.

Compared to a year ago, OPPO's decline seems even more significant.

At that time, OPPO topped the Chinese smartphone market with a 17.7% market share. Its dual flagship products, the Find X6 series and the Find N2&Flip series, successfully helped OPPO rank among the top three in the high-end market of $600 and above. Especially the Find N2 Flip, which became the sales champion for foldable phones in the first half of the year. At that time, OPPO was highly anticipated as a standout performer capable of navigating the industry's cold winter.

However, as the industry has stabilized and crossed the winter, OPPO seems to have been left behind in the cold wind.

Ultimately, the OPPO Find series cannot shoulder the responsibility of the high-end line; the Reno series has a vague product positioning and low resolution; although the A series focuses on cost-effectiveness, its reputation and image are obviously inferior to Xiaomi's; its sub-brands are also far behind competitors, with OnePlus's popularity falling short of vivo's iQOO and Xiaomi's Redmi brands.

Due to OPPO's vague overall positioning and mutual consumption among its product lines, falling behind has become an undeniable fact.

2. Both apprentices, but OPPO lags behind

It is well-known that OPPO's founder Chen Mingyong and vivo's founder Shen Wei are both disciples of Duan Yongping, whose business philosophy has profoundly influenced OPPO's development.

Born in the late 1960s, Chen Mingyong was one of the beneficiaries of the early restoration of the college entrance examination. After graduating from the Department of Information and Electronic Engineering at Zhejiang University in 1992, he chose to go south and work as Duan Yongping's assistant at Xiaobawang.

Duan Yongping's management philosophy was once the object of Chen Mingyong's frantic learning. Therefore, when Duan Yongping resigned from "Xiaobawang" in 1995 to found BBK, Chen Mingyong also decisively chose to follow him.

Duan Yongping's departure from Xiaobawang was mainly due to significant disagreements with his boss over equity reform concepts. After founding BBK, he had the space to realize his own philosophy.

Duan Yongping sold shares to all employees. Even if employees did not have money, it was fine; Duan Yongping would lend them money, which they could repay with the profits or dividends from the shares.

Chen Mingyong alone borrowed several hundred thousand yuan from Duan Yongping to purchase BBK shares, and nowadays, the profit returns are astonishing. According to the 2016 Hurun Rich List, Chen Mingyong's assets reached 2.2 billion yuan.

After founding OPPO, Chen Mingyong also liked to provide equity incentives to all employees: new employees could obtain options with a mostly four-year vesting period after one year; if employees left, the vested options did not need to be surrendered.

Under this policy, OPPO employees' shareholding ratio has even exceeded 60%. However, to enable OPPO to successfully list, Chen Mingyong had to suspend new equity incentives from 2010 but emphasized that "it does not mean there won't be any in the future."

Over the years, although there have been some reassignments within OPPO's senior management team, few have resigned. Relevant data shows that OPPO has over 3,000 employees, but the number of voluntary resignations each year does not exceed 30.

Moreover, OPPO's bold marketing strategies also bear the mark of Duan Yongping's influence.

During the incremental market phase, OPPO established a vast offline system through long-term cultivation of the sinking market, relying on a franchise model, coupled with brainwashing advertising slogans like "charge for five minutes, talk for two hours," quickly rising to the ranks of mainstream brand phones.

Vivo, also originating from the same school, has a similar success story, often being teased as a twin with OPPO, the green and blue factories.

However, after entering the stock market phase, while vivo continued to make steady progress, OPPO quietly fell behind.

Although OPPO has been striving to hone its underlying technological capabilities in terms of business layout, investing significant resources in projects ranging from chips to XR, the results have been unsatisfactory.

At the end of 2019, Chen Mingyong stated that OPPO planned to invest 50 billion yuan in research and development over three years, mainly focusing on cutting-edge technologies such as 5G, artificial intelligence, AR, and big data, and striving to build core underlying hardware technologies as well as software engineering and system capabilities.

However, the development of both chips and XR has been fraught with difficulties, ending in failure.

In 2023, after four years of exploration, OPPO had to announce the closure of ZEKU and disband its R&D team, terminating its chipmaking journey.

Although OPPO has continuously launched a series of XR test products, none have been officially mass-produced. As global XR shipments continue to decline, the XR business has become significantly more challenging.

Financial media reported that OPPO's XR business personnel will shift their focus to AI, exploring directions such as AI Devices or robots, with only a few personnel remaining to continue pre-research in AR.

In contrast, vivo has successfully transformed, forming a powerful technology matrix.

3. How many opportunities does OPPO have left?

OPPO has encountered setbacks during its transformation process, and its core business is also facing challenges.

OPPO, which once aspired to expand its technological territory and pursue high-end products, has encountered severe real-world tests.

In 2018, OPPO launched the Find X flagship phone, marking its first step into the high-end market. However, despite being officially touted as armed with cutting-edge technology, it did not gain market recognition, and its signature pop-up camera design did not reappear in subsequent iterations.

Although the Find X2 had a sales price of up to 6999 yuan, it encountered a significant price drop soon after its launch due to the lack of sufficient cutting-edge technology and aesthetic support. Although OPPO has never officially announced the sales volume of the Find X2, the fact that the starting price of the Pro version of the Find X3 series was reduced by thousands of yuan is enough to indicate that sales were not ideal.

Furthermore, according to data from Counterpoint, a market research firm, OPPO's market share in the domestic high-end mobile phone market (wholesale price above $400) in the second quarter of 2022 fell from 13% in 2021 to 8%. The performance of the Find series, which targets the high-end market, obviously fell short of expectations.

However, OPPO is not entirely without opportunities.

In June 2021, OPPO officially merged with OnePlus and launched a dual-brand strategy. OPPO hopes to support OnePlus in stabilizing the online market through investment, technology, channels, and other comprehensive means, helping OPPO seize market share.

On October 31, the OnePlus 13 officially went on sale with impressive results. Li Jie, President of OnePlus China, announced that sales of the OnePlus 13 exceeded 100,000 units within just 30 minutes of going on sale, setting a new sales record for OnePlus flagship phones.

Additionally, OPPO's overseas performance has also been decent. Currently, OPPO's overseas shipments account for nearly 60% of its total shipments and primarily target the high-end market.

For example, in 14 markets such as India, Thailand, Vietnam, New Zealand, Belgium, and Portugal, OPPO ranks third in the high-price segment above $500. In the first half of 2024, OPPO's foldable flagship phones ranked first and second in markets such as Indonesia, Malaysia, and Singapore. Simultaneously, its high-end straight-plate flagship Find X series was also popular in overseas markets, with shipments in the first half of 2024 increasing by 98% compared to the previous generation.

However, the overseas market is also becoming increasingly competitive. Wu Xiaobo even predicted that the time window for Chinese companies to go overseas would only last 5 to 10 years.

Amid internal and external troubles, OPPO is in a pressing situation. As a result, Chen Mingyong, who has not publicly appeared for many years, had to quietly reemerge, personally taking charge of OPPO, conducting channel research, and communicating with core provincial agents and distributors.

Chen Mingyong once said that he has never cared about the next trend but only about whether user needs are met.

It remains to be seen whether OPPO, which once relied on Duan Yongping's business philosophy to dominate the market, can reclaim lost ground under Chen Mingyong's return.