The wave of smartphones has already risen, and China will be the most cruel and fiercest place in the field of smartphone competition. In the past few years, Easda has been doing well in China and is the largest mobile phone brand in Android. It is expected that sales this year may exceed US$10 billion!

But that's just an overseas market.

Even Zhou Buqi does not have that confidence in what kind of development can Esda in China.

The competition in the domestic mobile phone manufacturing industry is too fierce.

There are many reasons.

From a technical perspective, there are two main reasons.

First, the technical content of mobile phone manufacturing is not high, and the threshold for entry is very low. For mobile phone manufacturers, there is no need to study chips, sensors, panels, and cameras. They can buy them directly from the supply chain and then process and assemble them.

The second is the operating system field.

Foreign Android mobile phone operating systems are basically the same. There is actually not that big difference between buying Samsung or lg, Motorola or Sony.

Especially after the high homogeneity of hardware products, the gap between mobile phones in different brands is getting smaller and smaller.

It is different in China. Since Google withdraws from the mainland market last year, it means that domestic Android phone users cannot enjoy Google's series of services like foreign countries.

Therefore, optimizing the interface performance of the Android system has become an important thing.

The application market on the operating system can flourish; combining system optimization and application services can also become a business... In other words, domestic mobile phones can have more profit channels than foreign mobile phones and can make more money from the software level.

You can make money from software services, and hardware becomes a tool... You can constantly compete with others by self-pressure pressure. The entire industry is collectively pressuring prices, and the competition will be unprecedentedly fierce.

Obviously, Lei Jun is the leader in this field.

His innovative mobile phone strategy is the fundamental reason why Xiaomi defeated a large number of large companies such as "China Cool League" as an unknown small company.

Lei Jun is a person who came from the Internet industry and software industry. He is working on Internet mobile phones, not hardware mobile phones. His positioning of Xiaomi is an Internet company, not a mobile phone company.

If Xiaomi wants to make money, it does not need to make money through the products of Xiaomi phones themselves, but sell Xiaomi phones to the market at an ultra-low price and gain a large number of users.

Then, by providing these users with subsequent software services, we generate continuous profits.

This is the core element of Xiaomi's success, not some hunger marketing.

At this point, LeTV is doing more extremes.

LeTV TV and LeTV mobile phones are all very high in configuration, but the prices are very low. They are not to make money from consumers on hardware products, but to create profits for LeTV in subsequent use after consumers buy the product.

For example, Internet TV, just a startup advertisement, the annual benefits to manufacturers can far exceed the price concession space brought to users during product sales.

This is so imaginative!

You should know that TVs are not fast-moving consumer goods. Consumers will only buy new TVs in very few and very specific situations.

If the purchase frequency is too low, it means that the TV shipments are too small.

This means that TV manufacturers have little profit.

After all, selling hardware products is just a one-time service. After selling the products, you lose the ability to make money in the subsequent sustainable way.

It is different to provide "software services". After consumers buy the TV home, this becomes a long-term and effective platform channel for pushing advertisements to consumers!

This is a sustainable money-making ability that can generate continuous profits.

Internet mobile phones defeat traditional mobile phone manufacturers, and Internet TV defeats traditional TV manufacturers. These are basically similar strategies. You can sell TVs to consumers at a price lower than the cost price. The manufacturer will lose a little first, it doesn’t matter!

Let’s first attract consumers by relying on extremely low prices!

When the consumer buys the TV home, the manufacturer will find a way to make the profits of the hardware products back in the process of providing software services to consumers in the subsequent process.

This "giving first, taking later" Internet strategy directly hits the traditional industry.

LeTV didn't do it.

Because Jabs had too great ambitions, he only had a little money in his hand and had too many businesses. From mobile phones, TVs to cars, there were too many subsidies that needed to be given in the early stage. Before the later "take" was retrieved, the company's cash flow broke and he died if he couldn't hold on.

If LeTV had tens of billions of cash flow on its account, it might be able to really make this whole model run.

After all, Jabs is a lucky person, and his business skills are still a little lacking.

Lei Jun is different. He is really down-to-earth and relies on his own strength to work hard. He is a real entrepreneur. With much higher level, he will be very mature in Xiaomi.

Take one step at a time, take your time.

Before the mobile phone business grew, Xiaomi focused all its energy on mobile phones.

In fact, Apple is the originator of this kind of innovation in Internet software and hardware models.

Apple makes money by making a lot of money at the hardware level, and then sells the phone to users, and then continues to make money from consumers through the software level.

Left-hand hardware and right-hand software must be grasped with both hands and both hands must be hard.

So Apple has super strong money-making ability.

Lei Jun is very self-aware. It is too overestimable for Xiaomi to compete with Apple. Xiaomi now can’t even compare with China Cool League, Jinli, and Meizu in China.

There is no way, so you can't grab both hands.

Give up one!

It no longer pursues making money on the hardware products of the mobile phone itself like traditional mobile phone manufacturers, and actively gives up profits at the hardware level, but pursues longer-term profits in software services.

Giving up profits at the hardware level gives Xiaomi mobile phones a lot of room for price reduction!

For mobile phones with the same configuration, the market price of "China Cool League" is 3,500-4,000 yuan, and the price of Xiaomi 1 is 1,999 yuan... It is directly bargained half!

Such a price advantage will bring extremely strong competitiveness.

This is very uncomfortable. Xiaomi has become a messenger in the industry and is deeply hated by its peers. The public relations copywriting of major companies is as if they have been discussed and they are constantly criticizing Xiaomi.

From the perspective of a businessman, Zhou Buqi also doesn't like the trick that Lei Jun played.

This is so crooked!

What a fresh thing a smartphone is, how profitable it is?!

When the entire mobile phone industry was immersed in it and made a lot of money, a guy who did not follow the rules suddenly appeared, completely subverting the industry.

If you don’t make money yourself, you have to let everyone accompany you without making money. It’s so unethical!

"China Cool League" collapsed directly.

After experiencing a brief trough, Huawei quickly adjusted its strategy and rose again, becoming a mobile phone giant in the new era; Lenovo directly lost the domestic market, but fortunately it sold well in the overseas market; ZTE was unsatisfactory and had lost the recognition of consumers at home and abroad, but under the promotion of the country, it could sell mobile phones to some besieged countries and live well before being fined huge amounts.

Coolpad won't work, it's just over.

Zhou Buqi and Zhou Shaoning met Lei Jun in the capital. He wanted to ask Boss Zhou to help and provide some support to Xiaomi at the supply chain level.

This is related to the business logic of some electronic products industries.

Whether it is making computers, mobile phones, refrigerators, and TVs, cooperation between manufacturers and supply chains is not a model of paying money and delivering goods at the same time.

It’s time to get the goods first and then give the money.

For example, Xiaomi wants to make mobile phones, but in fact they don’t need to have too much money on their accounts. Just convince the supply chain and then get the goods in the form of “debt” first.

After receiving the goods, spend some money to assemble the OEM factory and sell it to the market.

After making money, Xiaomi will pay back the money owed to the supply chain with the money.

The entire business process is completed.

It seems that the supply chain is at a disadvantage here, but there is no way to do it because the information is not equal in this process. Mobile phone manufacturers are not sure whether each batch of goods provided on the supply side can meet the standards.

So you have to be "debt".

This is a kind of binding and constraint on the supply chain. You cannot make fraud. You must provide accessories that meet standards. Once fraud is done... I'm sorry, the order will be cancelled and the debt will be cancelled.

Suppliers will suffer huge losses.

For example, there is an Apple supply chain manufacturer in China who was found to have faked its supply, and this supply chain manufacturer with a market value of tens of billions of yuan immediately faced bankruptcy.

So this model is very unfriendly to small companies.

When Esda first made mobile phones, Ziweixing came to endorse it, so the supply chain believed in Esda and was willing to provide Esda with a large "debt limit" to supply Esda.

Xiaomi won't do it.

This is a small company. Although Lei Jun has already taken office as the chairman of Kingsoft Group, there is no relationship between Kingsoft and Xiaomi. You can't let Kingsoft endorse Xiaomi, right?

This leads to Xiaomi's lack of credibility.

The supply chain dares not supply.

If the goods are lent to Xiaomi, but Xiaomi's mobile phone cannot be sold, it will be smashed in its hands... By then, Xiaomi will go bankrupt and cannot pay back the money from the supply chain, and the supply chain will bear huge losses for this.

However, when communicating in person, Lei Jun was still a little afraid and reserved for the Xiaomi model.

Xiaomi's press conference will be held in the middle of this month.

At that time, Xiaomi 1 will be released at a very impactful price that can be said to be a devastating blow to the industry. Estada is now a mobile phone giant and has also planned the domestic market since last year.

Xiaomi mode is not only impacting traditional mobile phone manufacturers such as "China Cool League", but also Esta will inevitably be impacted.

So Lei Jun was very cautious.

I plan to fool you first.

Anyway, Boss Zhou should pay attention to his face. As long as he agrees, even if he doesn’t sign the contract, it is not easy to repent with his current status.
To be continued...