Recently, Counterpoint Research, a leading market research firm, released sales data for China's smartphone market in the third quarter of 2024, revealing that vivo maintains its lead with a 19.2% market share.

In the fiercely competitive smartphone industry, vivo stands out as a colossus, undoubtedly possessing exceptional qualities.

Laying a Solid Foundation with Diversified Efforts

vivo has spared no effort in product innovation, particularly in the realms of imaging and chip technology. The vivo X200 series, for instance, is equipped with a Zeiss 200MP APO super telephoto lens and an upgraded self-developed large model image quality enhancement algorithm, significantly enhancing detail performance at 20x zoom and beyond, achieving a long-focus strength that greatly surpasses industry standards. This meets users' demands for high-quality photography, making it easy to handle both landscape and portrait shots, providing users with an exceptional shooting experience.

In chip technology, vivo leverages the Blue Crystal chip technology stack and has established a joint laboratory with Arm to deeply explore chip bottom-layer technology. Collaborating with partners such as Arm and MediaTek, vivo has realized a full-link closed loop from chip definition, development to tuning, optimizing chip performance from the bottom layer to provide a solid guarantee for the smooth operation and efficient processing of mobile phones.

In addition to investing in technology, vivo also pays great attention to user experience. From system optimization to after-sales service, vivo strives for perfection. In terms of the system, vivo's OriginOS is continuously optimized, using Multi-Turbo 5.0 memory management technology to improve the scheduling strategy of system memory and enhance memory utilization, allowing users to experience smoother operation when using mobile phones.

In after-sales service, vivo boasts over 800 self-built service centers and more than 1,300 service stations nationwide, far exceeding other domestic competitors. It also provides considerate services such as free screen protectors and free maintenance, and extends the three-guarantee period to 30 days for replacement, allowing users to have no worries during the purchase and use of mobile phones. According to iResearch data, up to 70% of users stated that they would recommend a brand's products due to its high-quality after-sales service. vivo has won the trust and support of users with such considerate after-sales service.

vivo also boasts a diversified product matrix covering different price ranges and user groups. The high-end market is represented by the X series and foldable screen series, which meet the needs of users pursuing high quality and ultimate experiences with their excellent imaging capabilities and advanced foldable screen technology; the iQOO series focuses on high performance and gaming experiences, and is deeply loved by game enthusiasts; the Y series occupies a place in the low-end market with affordable prices and practical configurations, meeting the daily use needs of price-sensitive users.

This diversified product layout covers almost all potential user groups, laying a solid foundation for the growth of vivo's market share.

Shortcomings Need to Be Addressed

Despite vivo's continuous efforts in the high-end market, it still faces many challenges.

First, from a brand perception perspective, vivo's long-standing brand image accumulated in the mid-to-low-end market has led to relatively low consumer recognition of its high-end products. In consumers' minds, the "cost-effective" label of the vivo brand is deeply ingrained, making it difficult for vivo to shake off the cognitive dilemma of "high configuration, low price" in the high-end market. When purchasing vivo's high-end flagship products, consumers still consider the cost-effectiveness factor excessively, unlike high-end users of Apple and Huawei who place more emphasis on the psychological satisfaction and brand value brought by the brand.

The lack of technology premium is also a major obstacle to vivo's high-end advancement. In the high-end market, core technology is a key factor supporting brand premium. Although vivo has made some progress in technologies such as imaging and chips, there is still a gap compared to competitors like Apple and Huawei.

Market data shows that vivo's market share in the price segment above 6,000 yuan has never exceeded 5%, a significant gap compared to Huawei's Mate series, which dominates the domestic 10,000-yuan mobile phone market with a 62% share. All these indicate that vivo's path to high-end advancement is still fraught with challenges, requiring continuous efforts in brand building, technological innovation, and channel management.

Secondly, amidst the wave of technological innovation, although vivo has made certain achievements, it also faces an innovation bottleneck. In chip research and development, although vivo has deeply explored chip bottom-layer technology by establishing a joint laboratory with Arm, it has started relatively slowly compared to brands like Huawei and Xiaomi that have taken the lead in chip research and development.

For a long time, vivo has been highly dependent on external chip suppliers. Although it has made certain research and development achievements in auxiliary chips such as imaging, its investment in research and development and technical reserves in core chip technologies such as mobile phone CPUs are relatively insufficient, which affects vivo's competitiveness in the high-end mobile phone field. In the face of a complex market environment and fierce competition, the lack of independently controllable core chip technology makes vivo vulnerable to external factors.

Additionally, as the smartphone market gradually matures, consumers have increasingly high requirements for mobile phone performance, not only paying attention to conventional indicators such as processor performance, screen display effects, and photography capabilities, but also putting forward higher requirements for fast charging speed, heat dissipation performance, battery life, and other aspects of mobile phones.

Although vivo has made certain technological upgrades in these areas, it has not formed a clear advantage over competitors in some key performance indicators. In fast charging technology, although vivo continues to set new records for fast charging speeds, other brands are quickly catching up, gradually narrowing the gap; in mobile phone heat dissipation, some brands that focus on gaming performance continuously innovate in heat dissipation technology and launch more efficient heat dissipation solutions, while vivo's pace of innovation in this area is relatively slow.

Competitive Dilemma: Many Challenges from Internal and External Troubles

In the fiercely competitive smartphone market, vivo faces strong pressure from competitors from all sides.

First, Huawei, with its profound technical foundation and strong brand influence, occupies a pivotal position in the high-end market. Huawei's Kirin chips and HarmonyOS operating system have built a strong technical barrier, giving it extremely high user loyalty in the high-end mobile phone market.

Xiaomi has rapidly risen in the market with its cost-effective products and strong internet marketing capabilities. Xiaomi has always adhered to the concept of "born for fever" and focused on product performance and configuration. By continuously optimizing the supply chain and cost control, it provides consumers with affordable and powerful mobile phone products. In the third quarter of 2024, Xiaomi's domestic market shipments maintained year-on-year growth for the fifth consecutive quarter, rising to fourth place with a 14.8% market share, demonstrating a strong development momentum.

In addition to Huawei and Xiaomi, Apple, as a giant in the global smartphone industry, also brings tremendous competitive pressure to vivo. Apple, with its smooth iOS system, powerful A-series chips, and comprehensive ecosystem, dominates the global high-end smartphone market. Although Apple faces fierce competition from domestic brands in the Chinese market, its brand influence and user loyalty still cannot be underestimated.

Secondly, against the backdrop of gradually slowing growth in the global smartphone market, vivo is in a critical period of transformation, facing many challenges and uncertainties.

In terms of brand power enhancement, although vivo has accumulated high popularity and market share in the mid-to-low-end market, more efforts are needed to establish a strong brand image in the high-end market. For a long time, the "cost-effective" image formed by vivo in consumers' minds has made its high-end products relatively weak in brand premium capabilities, making it difficult to compete effectively with brands like Apple and Huawei in the high-end market. Although vivo has launched a series of high-end models, it has not yet accurately conveyed the unique charm and core value of high-end brands in brand communication and brand value shaping, resulting in the need to improve consumer recognition of its high-end products.

Breaking through the high-end market is another major challenge facing vivo. Although vivo has invested a lot of resources in the research and development and promotion of high-end models, launching high-end products such as the X series and foldable screen series, its market share in the high-end market is still relatively low. Its market share in the price segment above 6,000 yuan has never exceeded 5%, a significant gap compared to Huawei's Mate series, which dominates the domestic 10,000-yuan mobile phone market with a 62% share. This is mainly because vivo's technological innovation and differentiated competitive advantages in the high-end market are not prominent enough to meet the high requirements of high-end consumers for product quality, technology, and brand.

Product line optimization is also one of the issues that vivo needs to address. With the intensification of market competition and the diversification of consumer demand, vivo's existing product line appears too complicated, and the positioning and differentiation between different series of products are not obvious enough, leading to consumer confusion when making choices. This not only increases the difficulty of brand management and market promotion but also affects product market performance and brand image. vivo needs to optimize and streamline its product line, clarify the positioning and target user groups of each series of products, and create more differentiated and competitive products.

In terms of ecological layout, vivo is also relatively lagging behind. With the development of IoT technology and the increasing demand of consumers for smart living, the ecological layout of mobile phone manufacturers has become increasingly important. Huawei's HarmonyOS ecosystem has created a full-scenario smart living experience for users through interconnection with numerous smart devices; Xiaomi's Mijia ecological chain also covers multiple fields such as smart homes and wearable devices, building a huge smart ecosystem.

In contrast, vivo is slower in its ecological layout, with its application ecosystem lagging behind. Its atomic components only support more than 200 mainstream applications, far behind MIUI's 500+, and the adaptation of vertical scenarios such as finance and government affairs is insufficient, leading to data migration costs when users switch phones and a lack of ecological lock-in effect. This puts vivo at a disadvantage in future smart ecological competition, making it difficult to meet consumers' demand for one-stop smart living solutions.

Strategies for Breaking the Deadlock: Where Lies the Future Path?

Facing numerous challenges, vivo is actively seeking strategies to break the deadlock and explore future development directions.

In technological research and development, vivo should continue to increase investment, especially in core technology areas such as chips, imaging, and artificial intelligence. In chip research and development, vivo can further strengthen cooperation with chip manufacturers, increase independent research and development efforts, strive to make breakthroughs in core chip technologies such as CPUs, reduce dependence on external suppliers, and enhance the core competitiveness of its products.

In imaging technology, vivo should continue to deepen cooperation with Zeiss, continuously optimize micro gimbal stabilization technology and imaging algorithms, improve the phone's shooting performance, and maintain its leading position in the imaging field. At the same time, vivo should also actively deploy artificial intelligence technology, integrating AI technology into various application scenarios of mobile phones, such as smart voice assistants, smart photography, and smart system optimization, to bring users a more intelligent user experience.

Brand building is also crucial for vivo's breakthrough. vivo needs to clarify its high-end brand positioning, reshape its brand image, and get rid of the inherent label of "cost-effective". vivo can enhance its high-end brand image and brand value by launching iconic high-end products, hosting high-end brand events, and strengthening interactions with high-end consumer groups. vivo should also focus on brand communication, conveying brand concepts and product advantages to target consumers through precise brand marketing strategies, and improving brand awareness and reputation.

To expand its business areas, vivo can consider diversified development and explore new growth points. With the development of IoT technology, fields such as smart homes and wearable devices have shown huge market potential. Relying on the technology and user base accumulated in the smartphone field, vivo can actively deploy in the IoT field, launch smart wearable devices such as smartwatches, smart speakers, and smart headphones, as well as smart home products such as smart door locks, smart cameras, and smart appliances, to build a complete smart ecosystem. vivo can also explore applications in fields such as artificial intelligence, big data, and cloud computing, opening up new paths for the company's development.

As a towering figure in the smartphone industry, vivo has showcased robust capabilities in technological innovation, market strategy, and after-sales service. However, it is confronted with challenges, including obstacles in high-end market penetration, innovation hurdles, and intense competition.

Conclusion: A New Era for the Industry Titan

vivo, a behemoth in the smartphone sector, has secured a pivotal market position through its pioneering technology, attentive service, and varied product offerings. Nonetheless, it now grapples with predicaments such as impeded progress in the high-end market, innovation plateaus, and stiff competition. These challenges serve as hurdles that test vivo's adaptability and capacity for innovation.

Breaking through these impasses is vivo's foremost priority. Boosting investments in research and development, refining its high-end positioning, and expanding into diversified businesses represent not only vivo's strategies to overcome these obstacles but also the cornerstone of its future growth. By doing so, vivo can distinguish itself in the fiercely competitive market and achieve groundbreaking advancements.

It is widely anticipated that, fueled by technological innovation and strategic transformation, vivo will undoubtedly continue to pen a remarkable chapter, delivering more premium products and services to consumers, and propelling the smartphone industry to unprecedented heights.