Has the core team of Gree mobile phones been disbanded? Gree Electric responded that research and development are still ongoing

On the evening of May 19th, there were media reports that multiple independent sources confirmed that Gree Electric had disbanded its core mobile phone team. I shouldn't be making phones again in the future

The reporter from Daily Economic News sought confirmation from Gree Electric regarding this news. At around 10pm on May 19th, a person related to Gree Electric Appliances (000651. SZ, stock price of 34.82 yuan, market value of 196.086 billion yuan) sent a response to the reporter, stating that the research and development of Gree phones is ongoing, and the TOSOTG7 is the sixth generation of Gree phones, which is combined with Gree+smart home. The reporter also noticed that TOSOT Daisong smartphones are still available for sale on Gree Electric's official channels and flagship stores on major platforms.

The first generation of Gree mobile phones was introduced in 2015. In March of that year, Dong Mingzhu, Chairman and President of Gree Electric Appliances, suddenly took out a mobile phone during a speech and said that Gree's phone had already been made, "I am already using it. This news immediately caught the attention of all sectors. In the following years, one of the topics that investors must mention when facing Dong Mingzhu was the Gree phone. Faced with external doubts, Dong Mingzhu also frequently utters golden sentences. It's said online that Gree's entry into mobile phones failed, but I don't think so. I'm fine now. "" Gree phones must be made, they must be made, "" (Gree phones) are no worse than Apple's. "

Since 2015, Gree has iterated 6 generations of products over the past 8 years. At the same time, Gree Electric's internal strategic positioning and product expectations for the mobile phone business are also changing. The reporter noticed that from 2014 to 2021, Gree Electric Appliances mentioned the content of Gree mobile phones in its annual report, but by 2022, Gree Electric Appliances no longer mentioned "mobile phones".

Image source: Each scripture data image

The 2022 annual report did not mention 'mobile phones'

Since the debut of the first generation of Gree mobile phones in 2015, Gree's mobile phone business has gone through eight years.

In March 2015, when Dong Mingzhu announced that Gree Electric was entering the mobile phone market, Gree Electric's securities affairs representative at the time told the media that Gree's main purpose in making mobile phones was to layout smart homes.

From the perspective of development history, in 2015, the price of Gree's first generation mobile phone market was less than 2000 yuan, and the avatar of Dong Mingzhu was used as the startup screen. In June 2016, the second generation of Gree mobile phones was launched; In June 2017, Gree's third-generation mobile phone "Color Realm" was launched with a price increase of 3200 yuan; In 2020, Gree mobile phones launched the "Dazong" brand. At present, at the "Gree Dong Mingzhu Store", the Gree TOSOT Dasong G7 phone is still available for sale, with prices ranging from 2959 yuan to 3099 yuan depending on the configuration. It is reported that the Dazong G7 is the 6th generation of Gree's mobile phone product.

From the annual reports of Gree Electric Appliances over the years, it can also be seen that Gree has changed its strategic positioning for mobile phones.

In its 2014 annual report, Gree Electric announced that Gree smartphones are about to be launched. As a carrier responsible for linking and controlling smart home appliances, Gree will compete for the entrance to smart homes, becoming a platform for connecting various home appliances and collecting data, helping users keep an eye on the operating status of home appliances, ultimately achieving remote visual control. In the 2015 annual report, Gree Electric stated that Gree will continue to focus on the air conditioning industry as the pillar, vigorously explore and develop emerging industries such as mobile phones, expand Gree's industry from a simple home appliance manufacturing enterprise to a new energy industry and equipment manufacturing enterprise, and build Gree into an international first-class enterprise with strong core competitiveness, independent intellectual property rights, and advanced management, achieving diversified and stable development.

It is not difficult to see that at the beginning, Gree Electric still had high expectations for the mobile phone business. Gree is also ambitious, hoping to create a "IoT mobile phone" and regards mobile phones as an important direction for the company's diversified development.

In the 2016 semi annual report, Gree Electric stated that the company officially launched the Gree second-generation mobile phone to the market, marking a new step towards diversification. In the 2016 annual report, Gree revealed that it had achieved mass production of second-generation mobile phones in 2016, and the 6-inch screen third-generation mobile phones were under development, accumulating a certain level of research and development strength in the mobile phone business. Next, we will expand and strengthen the mobile phone industry, and officially launch offline sales of mobile phones.

In 2017, Gree Electric stated that it would deepen its research and development work on mobile phone technology, create a first tier manufacturer level mobile phone in the industry, improve the construction of its own sales channels for mobile phones, and enhance Gree's market competitiveness. In the 2018 annual report, Gree Electric mentioned that the key work of the company in 2019 includes accelerating the iteration speed of mobile phone updates, combining with Gree's unique smart home ecology, and building the Internet of Things mobile phone with Gree's characteristics.

In the 2019 and 2020 annual reports, Gree Electric did not mention much about its mobile phone business. By the 2021 annual report, Gree Electric announced that Gree's second self-developed 5G mobile phone will be launched, equipped with the independently developed HaloUI6.0 operating system, which can link Gree smart home devices. In the 2022 annual report released at the end of April this year, Gree Electric did not mention the word "mobile phone".

Industry: It can also be understood if there is a real divestment

Due to Dong Mingzhu's confident speech, the outside world has always had high expectations for Gree phones.

After the first appearance of Gree smartphones in 2015, Dong Mingzhu stated at the time, "Gree needs to be a phone that doesn't need to be changed for three years." In early January 2016, Dong Mingzhu stated at a media conference that a successful enterprise is not about solving problems of specialization or diversification, but rather about focusing on the future and prospects. Gree Electric's mobile phone is not just a mobile phone, but a smart controller, a controller that can control smart homes. The future market prospects are enormous. Gree Electric not only considers the interests of the enterprise, but also the interests of the country. We hope to become a talent pool that can deliver high-end technology manufacturing talents to the country

Dong Mingzhu Image source: Visual China - VCG1111133776702

At that time, the price of the Gree generation mobile phone market was not high. Dong Mingzhu's explanation at that time was that the price of Gree phones was not high, but they would not ignore their functions due to their low price. Gree phones are currently in short supply and are being sold through specific channels. They are out of stock before they can reach the exclusive store. Regarding the sales of Gree smartphones, Dong Mingzhu was also full of confidence at that time: "Gree's future goal of 50 million phones should not be a big problem", "We need to be a technology leader in the industry when entering a field.

The ideals and goals are grand, but Dong Mingzhu clearly underestimated the fierce competition in the mobile phone market.

Qi Yingnan, a senior analyst at Counterpoint, a consulting firm, said in an interview with reporters that even if Gree really wants to spin off its mobile phone business, it is understandable. He told reporters that globally, mobile phones are no longer a significant incremental market, and small brands find it difficult to win market expansion through business models or ordinary products. The market does not leave much room for small brands. Whether in China or globally, the trend of mobile phone market share gradually converging towards top brands will not change. Now it has become necessary for everyone to cultivate their internal skills, improve product performance, occupy the mid to high end market, maintain good profits, and then convert them into investment to continue consolidating product competitiveness and enhancing brand strength. If a brand can achieve this, it will live well, but Gree phones are obviously far from this

On the other hand, even if mobile phones are combined with white battery products, the entrance to smart homes nowadays is not necessarily mobile phones. Gree's mobile phone business cannot be said to be completely unrelated to its main business, but it is not strongly related and will not promote the development of its main business. Its main business cannot be lent to mobile phones. I actually prefer Gree's automated chemical factory related products

However, on the evening of May 19th, Gree Electric's response to the Daily Economic News at least confirmed that the research and development of Gree smartphones will continue to advance.