From video to audio, and then from audio to TWS (True Wireless Stereo), Tonly Electronics (hereinafter referred to as "TCL Tonly") has been transforming in the face of changes in the market environment. In 2020, TCL Tonly made certain breakthroughs in the transformation of TWS, behind which there are unknown hardships and difficulties. How did TCL Tonly break through the difficulties in less than two years? In April 2021, TCL Dynamics interviewed Chen Xinwen, Vice President of TCL Tonly Electronics. 

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Like iron, the great past seems invincible from time to time, but I'm determined to get through it from now on.

Since Apple launched the first generation of AirPods at the end of 2016, the popularity has endured and shipments have continued to increase. According to the statistics of Counterpoint Research, the global TWS earphone shipments in 2016 was only 9.18 million pairs, reaching 46 million pairs in 2018, with a compound annual growth rate of 124%. In 2019, sales exceeded 100 million pairs, and the number of global TWS shipments is expected to reach 500 million pairs in 2023. Rapid annual growth in shipments enables TWS earphone to become one of the hottest markets.

In 2019, TCL Tonly officially entered the TWS earphone industry. Compared to the long-standing companies in this industry, Tonly was just a "baby" in infancy. Its pursuit for transformation forced TCL Tonly to dare to jump out of its comfort zone and embark on an unknown path. However, the situation of no experience and no orders became the biggest problem of TCL Tonly at that time.

Chen Xinwen

At the beginning, TCL Tonly was rejected by many companies, and the products made by it were not recognized by customers. Chen Xinwen knew that there were still big problems with the current products due to technical limitations, and orders only came when making the products better and best. In order to improve the products in terms of technology, process and appearance as a whole, Chen Xinwen and his team took a series of measures: firstly, making a lot of discussion and analysis to find the gap between TCL Tonly and its counterparts, and clarify its own positioning; secondly, making best use of the advantages to avoid the weak points and quickly narrow the gap with the counterparts; and thirdly, finding out the key points to make the products more competitive.

TCL Tonly defines target breakthrough projects every year, and at the beginning of 2020, TCL Tonly made the O brand an important annual breakthrough project. In order to complete this project, Tonly spent seven to eight months on product analysis and layout.

In terms of human resources, most of the technical staff of Tonly were still unfamiliar and inexperienced with the design of TWS earphones as well as the process by the end of 2019. TCL Tonly continued to introduce the best minds and integrate them to create a team of professionals who dare to fight in business; in terms of technology, 90% of the TWS earphones sold on the market were dismantled for study. From the chip to the antenna and from the process to the design, TCL Tonly made a systematic study so as to understand the gap with the counterparts.

"When you encounter difficulties, you fight against them to the end!"

After making good preparations, TCL Tonly asked O Brand for cooperation. But how could TCL Tonly, who had just entered the industry, get the order easily? Not by coincidence the negotiations were exceptionally difficult. O brand hesitated to give the order to TCL Tonly for two reasons: firstly, the supply chain of the existing headset supplier that the customer had been cooperating with for many years was already very mature, while Tonly had just entered the TWS earphone industry, with immature technology and production process; secondly, TCL Tonly had not produced mobile phone headsets, and the production line was producing audio brand headsets, which might not meet the requirements of mobile phone headset production. After enduring hardships, TCL Tonly has become more mature in both technology and craftsmanship, attracting an increasing number of overseas headphone brand clients and domestic smartphone brand clients to collaborate with us.

In the face of customer consideration, TCL Tonly said that it could come up with a prototype that satisfies customers before the product offer. To narrow the gap with the industry leader was an urgent problem for TCL Tonly to deal with. During that period, Chen Xinwen almost led his team to work until the early morning every day, and also on weekends, just to compete for time and make the prototype to satisfy the customers. In the end, with strong faith and the spirit of never giving up under the difficulties, TCL Tonly made the prototype to the customer in less than three weeks and did better than its counterparts in ANC (Active Noise Cancellation) and ENC (Environmental Noise Cancellation) before the customer handed over the opportunity to quote to TCL Tonly. From doubt to belief, now a main model of O brand's TWS earphone has been given to TCL Tonly for production. After the ordeal, TCL Tonly has become more mature in technology and process, and an increasing number of customers are cooperating with TCL Tonly, including overseas customers such as Jabra, JBL and domestic mobile phone brands.

"In fact, it's useless to describe a beautiful scene. Customers will really believe in you only when you make the product with practical action," said Chen Xinwen. Competitors already got the first-hand information a month before us to start the research and development, and it is not easy for Tonly to achieve the same effect technically with the competitors in three weeks.

Although TCL Tonly is still very "young" in the TWS industry, the spirit of TCL Tonly people is to never give up! "I have been in TCL for thirteen years, and one of the greatest characteristics of TCL people is that they keep learning, and when they encounter difficulties, they will fight against them to the end!” said Chen Xinwen, with a proud look on his face, "We have a colleague who originally worked as a power supply, but because of the company's transformation needs, he took the initiative to transform to ANC (Active Noise Cancellation) technology research. With seven to eight months of learning, continuous simulation, and repeated debugging practice, he has now become an expert in this field. In addition, we have many colleagues who have been senior engineers in the original field, but they voluntarily downgrade to the field of headsets. In fact, re-learning in a new field requires a lot of effort as well as determination."

How to transform successfully?

DVD, the main product of Tonly, was the most profitable product in 2008 when it was most prevalent. But at that time TCL Tonly made a bold attempt: transforming from DVD to audio. In 2019, when audio was the main product of Tonly, we started to transform to make TWS earphones. Chen Xinwen believes that the most important thing about product transformation is that the management team under the leadership of Mr. Yu (Yu Guanghui, President of TCL Tonly Electronics) of TCL Tonly is united, and reaching the transformation decision quickly for the whole staff. From video to audio, and then from audio to TWS, no successful transformation of TCL Tonly is achieved without the extreme attention and dedication of TCL Tonly's management team to it.

The second is the ability to plan ahead. When the company's main product was still at the peak of profitability, Mr. Yu asked the management team to evaluate the market direction and decide whether to invest in new product categories and do product transformation. Product transformation means huge capital investment, and if the company is losing money, the new product development will not be supported by enough funds, and therefore the transformation is much more difficult.

Furthermore, department heads have to play a pioneering role. As the leader of a team, the department head of each department should have the determination to take the lead in overcoming difficulties and lead the transformation of team members. If the department head stays without advancing, his or her staff will not go to transformation either.

Finally, you must not work behind closed doors, but do everything you can to attract human resources and get them integrated quickly to help the company transform. During the transformation process, if you stay in your current eyesight and technology and do not bring in new professionals and technology, the company will have a difficult time of transforming because it cannot progress.

TCL Tonly Electronics

Stay ahead of the market

In 2021, Li Dongsheng, chairman of the board, put forward the requirements of "improving the quality and efficiency of operation, leveraging the strengths and shoring up the weak links, accelerating the global layout and innovation-driven development" to the whole group. In response to the requirements of Li, Chen Xinwen focused on three aspects: the first point is product planning capability. Each product should be planned well in advance according to market trends, technology trends, user needs, product usage scenarios, etc. to meet the challenges of the unknown situation. "We encountered many difficulties in the transformation process, while the key point was that we did not plan well in advance for the product because of insufficient forward-looking thoughts. If we had seized this opportunity at the budding stage of TWS earphones, then we would not be catching up so hard now." Chen Xinwen explained. In addition, TCL Tonly has just stepped into the TWS earphone industry, and in terms of the current situation, it is not yet a success although it has seen the promise. Nowadays, electronic products are updated frequently. If you want your products to stay alive forever, you must continue to do product planning in advance and not lag behind the market, but ahead of it.

The second point is product development capability. Product development capability needs to be combined with supply chain layout. You must do a good job of product technology pre-research, and do a good job of technology and supply chain layout in the budding stage of the product according to the market changes and product planning, and establish a technical threshold and strategic control point when the product is developing rapidly.

The third point is to integrate resources to provide end-to-end solutions. For customers, they are not only concerned about product development capability and product performance, but also about cost, supply chain, manufacturing process and so on. Therefore, TCL Tonly must integrate all internal and upstream and downstream resources to provide end-to-end solutions for customers.

After the interview, Chen Xinwen took us to visit the product showroom of TCL Tonly. Ranging from small TWS earphones to large stereos, as well as intelligent new products commissioned by several Internet companies to TCL Tonly, these products prove the successful transformation and innovation ability of TCL Tonly.

The year of 2020 witnessed the global outbreak of the COVID-19 pandemic, and it was also the critical period of TCL Tonly's transformation. The transformation was supposed to be a difficult step, but TCL Tonly stepped firmly on the path of transformation despite the difficulties and obstacles.