MWC2024: KOOSEE Technology Chairman Chen Kaifeng Explains the Secrets to ODM's Upswing and the Future of AI-Powered Smartphone Differentiation

MWC2024: KOOSEE Technology Chairman Chen Kaifeng Explains the Secrets to ODM's Upswing and the Future of AI-Powered Smartphone DifferentiationIn today's fiercely competitive global mobile phone industry, brand manufacturers often garner media attention, while ODM (Original Design Manufacturer) companies, a vital part of the industry, often remain behind the scenes. However, in recent years, some leading ODM manufacturers have successfully entered the capital market, gradually entering the public eye

MWC2024: KOOSEE Technology Chairman Chen Kaifeng Explains the Secrets to ODM's Upswing and the Future of AI-Powered Smartphone Differentiation

In today's fiercely competitive global mobile phone industry, brand manufacturers often garner media attention, while ODM (Original Design Manufacturer) companies, a vital part of the industry, often remain behind the scenes. However, in recent years, some leading ODM manufacturers have successfully entered the capital market, gradually entering the public eye. At this year's MWC, a reporter from JIWENet had the opportunity to interview Chen Kaifeng, Chairman of KOOSEE Technology, a rising star in the domestic ODM industry, to gain insights into the company's successful experience in AI technology application, overseas market development, and business strategies.

AI Capabilities Become Key to Smartphone Differentiation

Chairman Chen Kaifeng is a veteran attendee of MWC, having rarely missed it over the years (except during the pandemic). He keenly observed a significant change at recent MWC conferences: AI applications are no longer confined to the conceptual stage but are rapidly being implemented in end products, bringing users tangible upgrades in AI experience.

This shift is mainly reflected in two aspects: Firstly, chip manufacturers and smartphone manufacturers are incorporating generative AI large models into smart terminals, enabling support for large language models, visual, and multimodal AI applications. Simultaneously, the emergence of new AI models such as DeepSeek improves model performance and significantly reduces costs while maintaining quality, strongly promoting the rapid implementation of terminal AI. Secondly, cloud vendors like Google have significantly reduced the cost of cloud-based AI, accelerating the integration of terminal and cloud AI, creating favorable conditions for the rapid popularization and cost reduction of AI technology.

KOOSEE Technology has also achieved significant results in the AI field. Mr. Chen introduced the company's successful collaborations this year with Google, Doubao, iFLYTEK, and others, integrating corresponding large language models into their products and achieving success in both domestic and international markets. He believes that mobile AI applications still hold enormous innovation potential. Currently, through end-cloud collaboration, several types of terminal AI applications have significantly enhanced user experience:

• Imaging capabilities: Photo optimization and intelligent noise reduction features result in better image quality.

• Audio: Call translation and noise reduction make communication more convenient and clear.

• Utility functions: Article summarization and email organization improve office efficiency.

• Smart assistants/intelligences: Smart assistants like Doubao are becoming indispensable tools for users' smartphone usage.

Mr. Chen particularly emphasized that smartphones have become an indispensable part of people's lives, and smart assistants and future intelligences will become important forms of mobile AI. The ability of these AI systems to recognize, understand, and fulfill user intentions will become a key differentiator for products like smartphones. "For example, now users only need to tell the smart assistant 'order a cup of coffee,' and it can automatically open the store page, select the flavor based on the user's daily preferences, and proceed to the payment interface. I predict that later this year or next year, the AI capabilities of smart assistants will guide consumers' choices of smartphone brands people will choose the phone with the best AI. The ability to accurately recognize, understand, and fulfill user intentions will become the key to competition among smartphone manufacturers."

The Secret to Upswing: Overseas Market Strategy and Localized Fine-grained Operation

At KOOSEE Technology's MWC booth, a series of innovative products attracted considerable attention, particularly their rugged smartphone. This phone not only boasts excellent waterproof, dustproof, and shockproof performance, reaching industry-leading protection levels, but also innovatively incorporates a high-precision thermal imaging lens, suitable for industrial inspection, outdoor exploration, security monitoring, and other fields.

Seventy percent of KOOSEE Technology's business comes from overseas markets. Despite the sluggish recovery and complex and volatile market environment of the global mobile phone industry in the past few years, KOOSEE Technology has bucked the trend, achieving continuous growth in performance and year-on-year doubling of order volume. In 2024, KOOSEE Technology continues to maintain strong development momentum, achieving year-on-year positive growth in operating income.

This success is inseparable from its overseas market strategy and fine-grained localized operations. Since entering the overseas market in 2014, KOOSEE Technology has decisively adjusted its strategy in response to changes in the international environment, shifting from initially focusing on niche markets to providing low-cost localized solutions, and from simply competing for market share to working hand-in-hand with clients for mutual growth.

Faced with high tariffs and the difficulty of entering overseas markets with complete machines, KOOSEE Technology has not given up. Through CKD/SKD (Completely/Semi-Knocked Down) assembly methods and cooperation with local partners, it has entered the market and provided services, including some B2B areas and government-led operator procurement projects, thus tapping into market space. As a veteran ODM manufacturer with nearly 20 years of history, KOOSEE Technology possesses mature flexible production and manufacturing capabilities and fine-grained management and operational capabilities. Even with small-batch CKD orders, it can achieve profitabilityan exceptional operational capability within the industry.

Simultaneously, KOOSEE Technology understands the importance of being close to customers and deeply engaging with local markets, committing to providing low-cost and highly competitive localized solutions. For example, KOOSEE Technology launched "customized services based on a standard design." The company has carefully designed a complete and flexible standard solution, allowing clients to freely define camera parameters, choose exterior colors, and more, based on local cultural and traditional market demands. In software development, KOOSEE Technology has developed a series of user-friendly localized software tailored to the usage habits and needs of the local market.

Mr. Chen stated, "Our clients possess market channels and consumer demand, while we have strong R&D capabilities and a mature supply chain. Geopolitical factors may create opportunities in certain local markets, and for KOOSEE Technology, this is a chance for development, and our market share has thus gradually expanded."

"Needle-Point" Focus: Leveraging the Global Market Through Fine-Grained Operations

Thanks to its fine-grained operation in overseas markets, KOOSEE Technology has been hailed as a rising star in the ODM sector in recent years. In the fiercely competitive ODM industry, KOOSEE Technology has rapidly seized market share, disrupting the industry's existing landscape and showcasing its unique competitive advantages with impressive performance and continuous innovation.

Compared to companies like Transsion, which have also achieved success in overseas markets, KOOSEE Technology faces a wider range of overseas market regions and more diverse and complex market demands, further testing its fine-grained operational management capabilities, such as marketing and cost control.

Since entering the overseas market in 2014, KOOSEE Technology has established cooperative relationships with markets in nearly 60 countries and regions, with nearly 40 active overseas clients spanning Europe, the Middle East, Latin America, and South Asia. Mr. Chen likens its coverage of localized demands in overseas markets to a "grid," believing that only by dividing the grid into smaller and finer units can market demands be more accurately identified. He uses the phrase "one-meter wide, kilometer deep" to emphasize the stringent requirements for market demand coverage. For instance, the rugged phone with added thermal imaging and barcode scanning lens mentioned earlier has gained widespread demand in parts of the European market.

Future Outlook: Finding the "Blue Ocean" in the "Red Ocean"

Regarding future development and market judgment this year, Mr. Chen believes that the global smartphone market is stabilizing, with limited overall growth in the slow recovery. The fluctuations in the global market have a relatively small impact on KOOSEE Technology. "What truly affects us is whether we've finely segmented the market, whether we meet local market needs, whether we develop differentiated products closely aligned with customer needs and local cultural characteristics, and whether we address surface-level issues or genuinely solve practical problems and urgent needs in specific scenarios. Taking a seemingly small, needle-point market and perfecting it through products and services is the key to success."

Mr. Chen believes that the ODM industry used to be full of "hidden champions," but today's market requires "all-around players" who can both cultivate technology and respond agilely to demands. At MWC, a global bellwether for the communications industry, KOOSEE Technology's rugged smartphone, AI solutions, and localized innovation cases demonstrate how the company uses "needle-point" focus to leverage the global market. While the industry is still debating "winter" and "recovery," KOOSEE Technology has quietly built a "flexible yet strong" survival philosophyusing technology as a spear to penetrate homogenized competition and localization as a shield to withstand market fluctuations.

Behind Mr. Chen's "grid" strategy lies not only a revolution in business logic but also reflects the transition of Chinese ODM manufacturers from "manufacturing OEMs" to "value co-creators." As he said, "In the next ten years, whoever can dig each 'one-meter-wide' demand to 'ten-thousand-meters deep' will find their blue ocean in the red ocean." This MWC encounter may be a new starting point for the industry to re-recognize the value of ODMs.