The 2023 Shanghai International Auto Show debuted on April 18th, 2023, drawing the attention of domestic and international professionals as it was the first international A-level auto show in the post-pandemic era. With the theme of "Embracing the New Era of the Automotive Industry," the 2023 Shanghai International Auto Show provided a great opportunity for automotive professionals to observe the movements for car manufacture, understand the market structure, and investigate consumer preferences. The International Auto Show is not only a platform for car manufacturers to debut new cars and showcase their technologies, but also an excellent opportunity for automotive professionals to observe industry trends understanding of the preferences of consumers. In recent years, starting with Tesla, electric vehicles have become the new investment craze and the world is going crazy over developing electric vehicles. This kind of "madness" has made many people rejoice in the arrival of a new era, while others think the electric vehicle bubble is massive.
It is interesting to observe that the phenomenon is both intriguing and perplexing: a large number of smartphone manufacturers are entering the automotive industry, while car manufacturers are also launching the smartphone industry. Currently, the key trend is for smartphone manufacturers enterig the automotive industry, such as Huawei, which began to lay out its plan for the automotive industry as early as 2016. On April 19, 2021, at the 19th Shanghai International Automobile Industry Exhibition, Seres and Huawei officially announced a deep collaboration each other, and the Seres-Huawei Smart Selection SF5 was launched on the market.
At the end of March 2021, Lei Jun announced that Xiaomi was entering the intelligent electric vehicle market with an expected investment worth10 billion US dollars over the next decade and an initial investment was of 10 billion RMB. Apple has had plans to build cars for some time, having established its self-driving car, known as "Project Titan," in 2014, and has been started self-driving research work ever since. In January 2021, Apple restarted its car-making plan partnering with Hyundai-Kia Group and Nissan Motor Corporation. Despite experiencing many challenges in its car-making endeavors, Apple's ambition to make cars has remained undiminished.
On the other hand, there are seeral companies that are entering the mobile phone industry from the automotive industry. For example, in September 2021, Li Shufu, chairman of Geely Automobile, officially announced the company's entry into the mobile phone market. In the summer of 2022, NIO CEO William Li revealed that the company was already pushing forward with its mobile phone business. And during the 2023 Electric Vehicle Hundred People Forum, he disclosed that the NIO mobile phone will be released in the third quarter of 2023.
What is the reason for the continuous entry of smartphone manufacturers into the automotive industry and the entry of automotive manufacturers into the smartphone industry?
The crux of the matter lies in the "smart interface" battle. The "smart interface" is a user interface that combines intelligent devices. Through the smart interface, users can interact with the physical and virtual world in a more intelligent, easier, and intuitive way. The physical world of humanity consists of three main spaces: the first space (living space), the second space (working space), and the third space (leisure space). In the daily work, life, and leisure spaces of human beings, are mainly connected through "transportation".
Humanity, therefore, enters intelligence era, the smartphone has become the essential intelligent interface, covering diverse aspects of the human life, work, and leisure spaces. Humans freely enter and exit from the virtual world through smartphones. However, there is a lack of intelligent interface with the transportation between different spaces. The emergence of electric vehicles just fill the gap of the intelligent interface between different spaces.
Therefore, we can say that whoever has the smart interface will dominate in the future. In the intelligent era, both the "physical world" and the "virtual world" require a powerful smart interface that can exist anytime and anywhere. ‘Anytime’ means that it can be used any time, and ’anywhere’ means that it can be used in any space.
From the three spaces perspective where humans exist and the transportation connections belong to them. Smartphones enable us to use smart interfaces anytime and anywhere in that three spaces. However, smartphones cannot be used anytime and anywhere in transportation connections, and vice versa. This explains why smartphone manufacturers are entering the automotive industry, and similarly, why automotive manufacturers are entering the smartphone industry. Currently, there are three different models in the development of the "smartphone plus electric vehicle" dual smart interface.
Pattern 1: Self-made smartphones plus intervention in car manufacturing. This mode is the best example by Huawei. As early as 2016, Huawei began laying out its strategy in the automobile industry. On April 19, 2021, Seres and Huawei reached a deep-rooted cooperation agreement, and the Seres Huawei Smart Selection SF5 model was launched. However, on March 31, 2023, Huawei issued an internal document stating that "Huawei does not make cars", with a validity period of 5 years. But is it really true that Huawei has given up on car manufacturing? I personally believe that it is definitely not the case. Instead, it reflects Mr. Ren Zhengfei's long-standing plan of "concentrating forces to annihilate the enemy". In the current international environment, Huawei has encountered many difficultiesresulting in a long-term and arduous advantage. Therefore, Huawei needs to concentrate its efforts on solving the most critical challenges and not to scatter its capital resources on non-core businesses. In fact, the core intelligent system of Seres is provided by Huawei.
Pattern 2: Self-manufacturing mobile phones and cars, which is exemplified by Xiaomi. At the end of March 2021, Lei Jun announced that Xiaomi would enter the intelligent electric vehicle market, with an expected investment of $10 billion over 10 years, with an initial investment of 10 billion RMB.
For Xiaomi, the growth of mobile phones has slowed down, and obvious increments are likely down warding. At the same time, Xiaomi has built a very large intelligent ecosystem. Therefore, for Xiaomi, having only a smartphone's intelligent interface will threaten the ecosystem constructed by the phone, and on the other hand, adding an intelligent interface for an electric car will favorably consolidate its ecosystem.
During the Shanghai Auto Show in the past few days, Xiaomi's chairman Lei Jun made an appearance at the National Exhibition and Convention Center and visited more than ten carmaker booths. For Xiaomi, the challenge of transforming from a smartphone manufacturer to an automaker and building a complete supply chain will be huge. However, if Xiaomi can succeed the both industries, it will achieve full coverage of its intelligent interface and expand its ecosystem. Therefore, electric vehicles will be a huge opportunity for Xiaomi's development.
Pattern 3: Self-made Cars plus Intervention in Phone Model. The most typical example is Geely. On March 30, 2023, Meizu and Geely's Lynk & Co jointly held a "boundless" ecological event. Meizu released its latest MEIZU20 series phones, and LYNK Flyme Auto system installed the new energy car model, Lynk & Co 08, was also released.
Currently, the cross-border integration between Geely's Lynk & Co and Meizu is still a parallel development stage. Whether the future integration will fully be connected and system remains to be additionally coordinated by Lynk & Co and Meizu. Obviously, for phone manufacturers, having an intelligent interface for electric cars is an advantage, and for car manufacturers, having an intelligent smartphone interface is also an advantage. However, how to integrate these two interfaces that will pose a significant challenge.
In the future, smart phones and electric cars will inevitably become "cheap appliances". This means that manufacturers of smart phones and electric cars will use OEM (original equipment manufacturer) production methods in large quantities, resulting in lower costs. For brands, what is a seamless smart interface that covers all aspects of your life, work, and leisure, leaving no dead ends. Behind the smart interface is a complete intelligent ecosystem, which includes the Internet of Things, smart home appliances. The interface will employ intelligent home systems, intelligent health, smart entertainment devices, shopping platforms, metaverse, etc. In this system, hardware and connectivity will become the core of future development.
It is evident that both mobile phone and automobile manufacturers have an extreme desire to possess this ecosystem, which requires an intelligent interface. Smartphones and electric vehicles provide an incredibe solution for such a seamless interface. Therefore, it can be said that in the future, "the one who possesses the intelligent interface will rule the world", and the fusion of smart phones and electric vehicles will continue to develop. Particularly the fact is that the smartphones and electric vehicles themselves will no longer be significant, as the focus shifts towards the system, ecosystem, and services, which will be the fiercely contested battlefield.