Rebirth 08: Rise from copycat phones

Chapter 123 S9's Global Explosion

Huawei, which is next door, quickly negotiated with the operators and planned to launch the U8200 as a contract phone in the domestic market. At the same time, it launched multiple customized contract phone research and development plans, striving to launch a number of mid- and low-priced customized contract phones next year to seize operator channels.

At the same time, domestic mobile phone manufacturers such as Lianxiang, Zhongxing and even Coolpad are also gearing up, taking a fancy to this contract phone track, and preparing to plunge into it to open up their own smartphone era.

After seeing the huge success of Zhiyun mobile phones, traditional foreign mobile phone manufacturers have increased their research and development efforts on Android phones and started to launch their own Android smartphones into the market.

If nothing unexpected happens, after October, a number of Android smartphones from foreign mobile phone manufacturers will gradually enter the domestic market, such as HTZ, another major Android phone manufacturer, and its subsidiary Dopod.

At this pace, international and domestic manufacturers are expected to gradually invest after October, and then launch a large number of Android smartphones after entering the 10th year, with prices ranging from more than one thousand to five thousand, covering all price ranges.

According to the pace of domestic and foreign manufacturers, especially international big-name manufacturers, Xu Shenxue is also implementing his plan to seize the market step by step!

After entering September, the marketing department also provided Xu Shenxue with sales reports of C1 and S9 mobile phones.

Ji Chenghe was excited when he gave his report: "In August, the sales of our S9 mobile phone were very good. Affected by the large-scale marketing publicity and the popularity of the topic worldwide, the S9 mobile phone has remained a best-seller worldwide."

"In August, including the 9 units sold on the first day of launch, we sold million S phones in one month, with revenue exceeding billion."

"And this sales volume is still limited by production capacity...otherwise we could sell even more!"

"According to our estimates, the sales in September and October will not be so exaggerated, but will still remain at a relatively high level!"

"Whether we can continue to do so depends on the market competition. After all, in addition to Apple, several other international manufacturers will also launch high-end flagship phones. Whether this will affect our S9 sales will have to be judged at that time."

"But even so, we still have to continue to increase production capacity. Our marketing department suggested that we increase the production expansion plan from 1.5 million to 1.7 million units, so as to win over potential high-end users in the first few months."

Xu Shenxue said: "We have been working on expanding production capacity. Colleagues in the supply chain have been working overtime. This month, the production capacity has been increased from 1 million units to 1.3 million units. By mid-September, we will be able to reach the peak design capacity of 150 units."

"If it is really necessary, then increasing production by another 200,000 units to 1.7 million units per month will not be a problem. We can even do it this month!"

“The question is, can the market growth consume such a large production capacity?”

"It's very simple to increase the production of S9. All it takes is a contract. All supply chain companies can immediately increase their production capacity, and the foundry will immediately start up the backup production line. But after the production is increased, if the sales volume fails to meet expectations, has your marketing department considered this series of reactions?"

"If we fail, the cost will be billions or even tens of billions. What's more, we have more than 200 supply chain companies and millions of families behind us!"

“We can be radical, but we cannot afford to be radical and fail!”

Xu Shenxue is still relatively cautious in this regard... because this is not a mobile phone that sells in large quantities for one or two thousand yuan, but a flagship phone S9 that costs more than four thousand yuan... In the overseas market, this thing sells for even more expensive, and is even a serious high-end model.

The sales volume of this kind of high-end model is actually quite limited. It doesn’t mean that you can sell them just by producing tens of millions of units. You need to consider the high-end market capacity in countries around the world.

For example, in the Japanese market, only more than one million smartphones were sold in the first half of the year. If you directly send millions of units there, the local area will not be able to absorb so many high-end smartphones... Unless you lower the price, but then you will sell at a loss!
Although Xu Shenxue's caution in increasing production may sound a bit timid... but it involves tens of billions of yuan in costs, hundreds of supply chain companies, and the employment of millions of people... It is impossible to make such a strategic decision on a whim.

Xu Shenxue needs detailed data support...as for later experience.

Xu Shenxue also doesn’t remember the market size of high-end smartphones in ASEAN, the EU, the US, or even China in 09 and the next 10 years…

What he knows is that smartphones will be very popular in the future...

But he actually has no idea how popular it is and how people accept high-end phones!
Even though he has a macro-level overall strategic plan, when making specific decisions, he still relies heavily on detailed data provided by various departments of the company.

If production is increased blindly without data support...if hundreds of thousands or even millions of unsold S9s are piled up in the factory warehouse, it will be a loss of billions. Even if it does not cause any serious damage to Contemporary Zhiyun Technology, it will seriously affect its future development.

Not only Xu Shenxue is cautious, in fact the supply chain is even more cautious... They would rather have insufficient supply than blindly expand production capacity and end up with a large amount of unsold inventory.

Gu Zhiming, who is in charge of the supply chain, often emphasizes the importance of "light inventory" in meetings... Zero inventory is impossible, so try to have light inventory. Parts come off the supplier's production line and go directly to the OEM factory for production. After being made into mobile phones, they are directly shipped to all parts of the world for sale... In addition to stocking up before the product is released, Gu Zhiming strongly opposes any stupid behavior of producing in advance and then storing them to sell slowly... This is simply an insult to him as the vice president of supply chain!
Because of this caution, after S9 sales exceeded expectations, subsequent supply became a little tight.

However, the initial estimate of one million units sold per month was already very optimistic...

Who would have thought that after the product was actually launched, the market enthusiasm would be even higher than expected, so the sales forecast was urgently raised.

Based on the forecast data from the data department, the company's top management judged that sales should be able to be maintained at 1.5 million units in the first three months, and based on this expectation, they implemented an emergency production expansion plan, expanding the monthly production capacity to 1.5 million units.

But what was unexpected was that the sales volume for the whole month of August still exceeded Zhiyun Technology’s expectations...so much so that the marketing department once again suggested increasing production capacity.

To be honest, this made Xu Shenxue doubt, are there so many rich people in this world?

You can buy any cell phone for six or seven hundred dollars!

At this time, Ji Chenghe continued: "Mr. Xu, the newly added 200,000 production capacity is based on our detailed forecast and calculation, and is based on the increase in existing markets and emerging markets."

"Currently, our S9 mobile phone is very popular around the world. Its popularity and sales volume are even comparable to those of the Apple 3GS. The proportion of overseas revenue has further increased."

"In August, domestic sales accounted for only 44.7 percent, while overseas sales accounted for 55.3 percent."

"Our current overseas markets are mainly concentrated in Europe, the United States and Japan. Sales in Europe account for 9 percent of our total sales. In August, we sold about S phones. The United Kingdom, France and Germany are our most important markets, contributing more than percent of our sales."

"Next is the US market, which accounts for 9% of sales, with sales of about units; followed by Japan, which accounts for %, with sales of about units. The above four regions are also the first countries or regions where our S mobile phone will be launched and sold."

"Because there are not many distributions in other countries or regions, the sales volume accounts for a relatively small proportion, and all together only accounts for 12.6%."

"But after investigation, we found that other markets also have great expectations for our Zhiyun S9. In September, we plan to increase supply to other regional markets and focus on emerging markets with large populations, such as India, Turkey, Indonesia, Brazil, Russia, Thailand, Vietnam and other markets."

"These emerging markets are also experiencing a smartphone boom, with high-income groups gradually embracing smartphones. For example, in India, a considerable number of high-income groups have started to buy high-end models, but the local market does not give them many choices."

"Both us and the fruit industry have limited production capacity and the local market is a little smaller, so we have not entered the local market on a large scale for the time being."
"We plan to further develop these emerging markets, recruit more powerful operators and channel partners, and expand the scale of publicity to seize local emerging markets."

"Our international market research department has predicted the potential sales volume in each country based on the economic development of each country, people's income level, consumption concept, local tariffs and other tax situations, etc."

"The conclusion is that the incremental market share in the existing market and the potential market share in these emerging markets are sufficient to absorb the newly added 200,000 units of monthly production capacity!"

As Ji Chenghe spoke, he also pulled out a document and handed it to Xu Shenxue: "This is a detailed report from the International Market Research Department!"

Xu Shenxue took the report and first looked at the participants and institutions on the inner page. In addition to the researchers from his own international market research department, there were also a lot of names of domestic research institutions and foreign consulting agencies...

Seeing this, Xu Shenxue nodded slightly. This is what it looks like to enter the international market!
Without thoroughly studying all aspects of the market, they just rushed forward foolishly...that's what small and medium-sized enterprises do, not multinational high-tech companies like them.

After carefully reading the research report, Xu Shenxue said, "Since the marketing department has made preparations, I will instruct them to prepare for the increase in production later!"

"Apart from this S9, how are the sales of C1?"

季成河道：“C1的销量在经过了七月份的巅峰时期后，受到水果3GS上市以及3G降价影响，同时一定程度上也受到了我们智云S9的上市冲击以及之前对C2手机上市的宣传预热，C1手机在八月份的销量有所下降。”

"However, we have taken corresponding price reduction measures, and the sales volume is still maintained at around 1 million units. We predict that due to the subsequent price reduction, although the sales volume of this model will continue to decline in the next six months, there will still be a relatively large sales volume, which is enough for C to continue to maintain large-scale mass production and sales for a long time!"

"In addition, this part of the lost market is not due to the emergence of competitors, but mainly because more consumers are waiting for our C2 mobile phone to be launched, and have a mentality of holding on to money and waiting to buy!"

(End of this chapter)