Author | Chuan Chuan

Editor | Da Feng

In 2024, the domestic mobile phone market saw a resurgence compared to 2023. According to the China Academy of Information and Communications Technology (CAICT), mobile phone shipments in China increased by 7.2% year-on-year, reaching 280 million units from January to November.

However, this resurgence did not spell an easy ride for Chinese mobile phone manufacturers. Amidst the fierce competition, major players are constantly exploring new frontiers, such as transitioning from large foldable to small foldable phones and delving into AI-powered devices. In this context, strategic decisions carry immense weight. So, who has been the most decisive player in the mobile phone industry?

In a recent article titled "Why Does vivo, Which Makes 'Few Bets,' Excel at 'Making Big Bets'?," Zhou Zhanggui highlighted that "vivo is a company marked by decisiveness, which stands in stark contrast to its low-key demeanor."

Indeed, vivo's journey over the past 30 years has been marked by precision in its key decisions. Zhou Zhanggui characterizes vivo as "a super-large global industrial technology ecosystem company."

vivo's prowess in making strategic bets has been instrumental in its ability to navigate market cycles and maintain steady progress. It rarely makes bets but excels when it does, effectively concentrating its limited resources on pivotal decisions that have proven precise over the years.

In his article, Zhou Zhanggui posed a thought-provoking question: Can mobile phone manufacturing be divorced from manufacturing factories?

Apple, for instance, still relies on the contract manufacturing model, with Foxconn being a prominent example. Foxconn manufactures products like iPhones and iPads for Apple, with factories spanning China, India, Brazil, and other countries. Another contract manufacturer is Pegatron, headquartered in Taiwan, China, with factories in China, India, Mexico, and other locations. It's evident that Apple's contract manufacturers are predominantly located in regions with lower labor costs to minimize production expenses.

However, such a model lacks the "warmth" and "human touch" that a brand like vivo strives for.

Unlike Apple, vivo adheres to a "factory manufacturing + technological innovation" model. As Zhou Zhanggui explains, vivo's rationale behind this approach is to "always maintain the right to define the true experience of products, ensuring a longer value chain."

This production method now appears prescient. Across the globe, Elon Musk, the founder of Tesla, another technology manufacturing giant, mentioned in his biography that designing a factory to build cars is as crucial as designing the cars themselves.

As Zhou Zhanggui notes in his article, a new generation of technology enterprises is recognizing the significance of manufacturing. It is as integral to a product as design and patents.

Especially today, consumers are no longer solely focused on the product itself; they delve into the cultural value it embodies. For instance, while Apple is indeed a user-friendly phone, it has become harder to define the company's identity post-Steve Jobs.

vivo's decision to establish its own factories and produce its own products, which may have seemed unwise initially, is deeply rooted in its management philosophy.

Shen Wei, the founder of vivo, stated in his "2020 New Year Speech": "Only by continuing vivo's consistent style of caution, humility, avoiding arrogance and impetuosity, maintaining strategic confidence, and staying true to ourselves, can our company ultimately realize its dreams."

vivo's inherent style is one of humility and low-key professionalism. It finds incidents like those involving "Foxconn workers" unacceptable in factories producing its products. The best way to mitigate such risks is to invest and produce in-house, with caution and prudence.

These seemingly "unwise" yet firmly anchored decision-making principles are ingrained in vivo's culture. Zhou Zhanggui mentions in his article that vivo emphasizes "duty-oriented" cultural management, requiring the team to use professional methodologies to ensure accurate decision-making.

This soft factor has been vital in keeping vivo competitive over the years, ultimately propelling it to become a global enterprise. This top-down philosophy guides vivo to take every step forward with solid footing.

In the mobile phone industry, new product launches are often accompanied by mutual ridicule and comparison. Slogans and quotes from company executives at launches are tacitly viewed as a means to go viral.

However, vivo does not subscribe to this culture. After attending numerous industry launches over the years, Xin Cai arrived at the same conclusion as Zhou: vivo does not have the habit of shouting slogans, goals, or investments.

This aligns with vivo's CEO Shen Wei's mantra: "Don't shout about what you're doing; do what you can based on your abilities."

Shen Wei often emphasizes an altruistic mindset, focusing on strategic concerns and core demands of partners in internal and external collaborations, aiming to build a community with a shared future and achieve mutual trust and win-win outcomes.

Adhering to this philosophy, vivo seeks "partners" who align with its values. These "partners" include users, employees, shareholders, and cooperation partners. vivo repeatedly emphasizes in its internal documents the importance of making these four partners "happy".

Taking internal "employee partners" as an example, vivo excels in "not having the habit of radical gambling and being willing to reach consensus through discussion."

As elaborated in Zhou's article, this approach avoids radical and individualistic decisions. While some may argue that this "co-construction" approach reduces decision-making efficiency, for a company of vivo's scale, decision accuracy trumps timeliness. A misdirected decision can lead to catastrophic failure or strategic setbacks.

As Zhou Zhanggui points out, vivo's management avoids radical gambling and is willing to reach consensus through discussion. This is why, among the numerous factories established in Dongguan over the past 30 years, vivo has emerged as a global technology giant.

For vivo, it has always been clear that for a company whose products are hardware and software, user satisfaction and choice are paramount. Without user choice, all ideas and dreams remain mere words.

vivo has three aspirations: to establish a world-class corporate culture and values; to create world-class products and services for users; and to build a world-class, captivating, and beloved brand.

Creating value for users is undoubtedly the cornerstone for realizing these aspirations. vivo embraces a user experience mindset, requiring "one brain and two hearts" – a "user brain," "empathy," and a "product heart".

In Zhou Zhanggui's view, vivo has been emphasizing user-centricity for 30 years. Shen Wei has repeatedly stressed "users are the direction" in internal speeches, while Hu Baishan has explained that "high-intensity connection with consumers determines the ultimate value and long-term development potential of mobile phones," both exemplifying the "user brain" approach.

In realizing user value, products are crucial in forming connections with users. So, how does vivo deliver products to users?

While soft cultural and value orientations shape a company's external image, true technological prowess serves as the backbone and driving force propelling the company forward.

In the article "Why Does vivo, Which Makes 'Few Bets,' Excel at 'Making Big Bets'?," Zhou Zhanggui outlined three core competitive areas for modern technology companies: underlying technology research and development, cutting-edge technological innovation, and technology product application.

vivo has always had a clear strategy for these three areas:

"Blue Technology" encompasses five vital underlying research and development directions: blue crystal chip technology stack, blue ocean endurance system, blue heart large model, blue river operating system, and blue map imaging.

"Long Racecourse" involves gathering resources, focusing on user needs, and investing in the long term. vivo's internal documents emphasize the importance of "long-racecourse technology" that prioritizes sustainable investment and business closed loops, rejecting short-term technological temptations and establishing long-term reserves.

The "vivo Product Engineering Methodology" focuses on the three levels of profession, technology, and engineering, emphasizing the "design-driven" concept. It believes that design should respect nature and intuition, with demand originating from life, scenarios, and psychological needs. Meanwhile, the "vivo Technology Application" methodology values the refocusing, amplification, and expansion of "pinpoint technology," believing that good technology requires star scenarios to connect with users, meaning user orientation must be pain point-oriented and goal-oriented.

Thus, the low-key vivo has always known where to place its bets. When it comes to strategic decisions, vivo is affirmative and confident. Its ability to maintain strong competitiveness in the past two years is a testament to vivo's 30-year commitment: excelling in strategic bets and valuing precision over quantity.