Rebirth 08: Rise from copycat phones

Chapter 215: Rolling and rolling, the imported mobile phone was rolled to death

The other aspects of this Xiaomi phone are actually quite satisfactory, with nothing outstanding. The 1-inch screen, GB of memory, etc. are nothing special, and it can't be considered first-rate. At best, it's second-rate.

However, this phone is actually equipped with an MSM8260 chip... Yes, it is Qualcomm's top flagship chip MSM8260.

The overseas version of the Zhiyun S11 series is equipped with the Qualcomm APQ9200 chip, which is actually a slightly overclocked version of the APQ8060. Except for the 0.1GHZ difference in the CPU main frequency, everything else is exactly the same.

However, the cheapest S11 series costs more than 8 yuan, while some other mobile phones equipped with 60X series chips are basically high-end flagship phones, and the cheapest ones cost more than or even yuan.

But the Xiaomi phone equipped with this chip only sells for 1999 yuan!
In the eyes of many mobile phone manufacturers, this is simply crazy.
But a group of netizens were collectively celebrating, saying that this is simply the king of super cost-effectiveness in the history of smartphone development.

Of course, after the carnival, netizens discovered that this phone was not available for purchase at all!

I won’t go into detail on the reasons, but it can be summed up in three words: you can’t get it!

Inside Zhiyun, there was some interest in this rice phone at the beginning. After all, the momentum was a bit scary, and it was similar to the scene when Zhiyun Technology launched the C1 phone.

But soon the attention was gone, because the intelligence department of Zhiyun Technology investigated the supply chain situation and came to a conclusion: the production of this Rice mobile phone this year will definitely not exceed 300,000 units, otherwise Rice will go bankrupt on the spot!
A mobile phone with few stocks does not make much sense. At the same time, Zhiyun Technology's marketing department has also figured out Dami's business strategy, which is a very special cost-effectiveness plus Internet model.

This model is destined to make it impossible for it to be a competitor of Zhiyun...there won't be any threat at all.

On the contrary, Weiku Electronics may have suffered a greater impact. Weiku Electronics is also actively responding to this. One of its core strategies is to continue to focus on building and operating offline channels!

We will strive to open mobile phone stores of the two brands, Xiaolan and Weiku, under Weiku Electronics, in every town, and achieve high density: within the town, people will be able to see Weiku Electronics' franchised mobile phone stores within a five-kilometer walking circle.

Weiku Electronics also has its own business route, and has never taken the route of extreme cost-effectiveness.

Although Weiku Electronics sells its mobile phones cheaply and has a large number of thousand-yuan phones, their mobile phones are not really cost-effective. Instead, they adopt a low-end and lower-spec model.

However, in order to meet the challenges and also to further expand shipments and obtain more traffic entrances.

Weiku Electronics has also accelerated its internal thousand-yuan phone strategy, which is to create a thousand-yuan smartphone that is not only cheap but also has decent performance.

At this time, the domestic supply chain cultivated by Zhiyun Technology and Weiku Electronics played an important role: there are a large number of cheap spare parts to choose from.

Weiku Electronics is worthy of its name as it started out by producing low-end feature phones.

The cost-saving gene is ingrained in our DNA.

After rummaging through the garbage dump, they actually found a lot of outdated, old, and very cheap spare parts.

The chip used is the S100W, a scaled-down version of Zhiyun's own S100 series sold externally. It seems that the main frequency is still 800MHZ, but the other parts have been cut to reduce costs.

Previously, it was a low-end chip exclusively supplied to other domestic low-end mobile phone markets and was very cheap.

This chip also comes with Zhiyun's self-developed communication chip, but it is not full network or dual network, it is still a single 3G communication baseband to reduce costs.

Then the screen uses a domestically produced low-end 3.7-inch screen. Don’t talk about the fact that nowadays smartphones generally have 4.3 or even 4.7-inch large screens, and even the resolution is approaching that of a retina model screen.

That's Zhiyun's flagship, starting at around 5,000 yuan, while this 1,000 yuan phone is lucky to have a touch screen, don't expect size and resolution.

The running memory is 512MB. Well, this is an old product of the previous generation of the memory business under Zhiyun Semiconductor, and its technical level is probably similar to the early C1.

Don’t despise it because it’s old. This memory is not unusable. Moreover, old products are mature and stable, with good quality and are not easy to break.

Besides, a lot of mainstream mid-to-high-end mobile phones now only have 512MB of memory. How much more do you want?
As for other hardware, you can save as much as possible. It doesn’t matter if the performance is a little worse. As long as it is cheap, as long as the quality is good and it doesn’t break easily, it’s fine.

Then, OEM is no exception. Large-scale leading OEM factories like BYD are very expensive, so they can find some second-tier or even third-tier OEM factories to do the OEM.

These second- and third-tier OEM factories are cheap and easy to use. If you pay them a little more, they will work hard to provide you with quality management when the order volume is so large.

For those OEM factories that are not the leading ones, it is very difficult to receive large orders from first-tier mobile phone manufacturers such as Weiku Electronics. Once they have the opportunity to enter the supply chain of Weiku Electronics, they have to work hard!
Although WeCool Electronics is in the mid-to-low-end market and is looked down upon by some high-end brands in the mobile phone industry, they are a serious mobile phone manufacturer with considerable mobile phone sales.

Not only does it sell well in China, but its products are also widely sold in many emerging markets. In Southeast Asia, India, South America and other countries and regions, the Little Blue mobile phone produced by Weiku Electronics sells very well.

It ranks at the top of the sales rankings in the smartphone markets of many emerging countries.

So don’t underestimate Weiku Electronics. It is not easy to be overlooked in the entire Zhiyun system. In fact, it is a very large company and a serious first-tier mobile phone manufacturer in China. It is not easy to get their OEM orders.

If it didn’t have such a large scale, it would have been impossible to use orders to support a large number of low- and mid-end domestic supply chains.

Finally, WeCool Electronics calculated the various hardware and OEM costs, tax costs, etc., and found that the cost control was pretty good. Even if this phone was sold for 999 yuan, it could still make a hundred yuan.

That’s not all. A group of people from Wecoo Electronics took their calculators and started calculating the revenue from software and the Internet: if they built-in APPs and added a dozen or so models, and even if they were to be conscientious and added some normal APPs with relatively low fees, they would still have to generate revenue of several dozen yuan per device.

APP channel fees are difficult to estimate. After all, everyone knows that users of thousand-yuan phones have poor purchasing power, but there is no ready-made example of how poor it is, so it is difficult to estimate, but there will definitely be some.

Finally, built-in advertising fees can also be considered as income.

Zhiyun's own Yun OS does not have any advertisements, but Weiku Electronics' customized and modified LAN OS does have advertisements, although they are slightly more restrained than other mobile phone manufacturers, which is still a source of income.

The built-in advertising revenue of mobile phones is closely related to the number of users. As long as the number of thousand-yuan phones increases, the advertising revenue is expected to be considerable.

"We need to change our mindset and stop thinking about making money by selling low-end mobile phones. How much money can we make just by selling low-end mobile phones? With our strong supply chain cost control capabilities, we can only make a few dozen yuan. If we only make money by hardware, we might as well go home and sleep."

"We should change our thinking. We can use these low-end mobile phones as advertising displays and earn channel fees and advertising fees!"

"Also, if you look at outdoor advertising and staircase advertising, advertisers still have to spend money to purchase and install display screens, but our mobile advertising does not require them to pay for hardware themselves. Instead, the audience can spend money to buy the advertising equipment themselves!"

“Letting users pay to watch ads, don’t you think it’s a big profit?”

At an internal meeting of WeCool Electronics, Bai Qiwen made a speech that "we don't sell mobile phones, we sell advertising", which stunned the senior management of WeCool Electronics.

I have been working in the mobile phone industry for so many years, but I have never seen Bai Qiwen make such confusing statements.

But after careful consideration, I found that it is indeed quite feasible. Anyway, the competition in the low-end market is extremely fierce. Not to mention the 1,000 yuan market, even in the 1,400-5,000 yuan market, the hardware profit is extremely low. At the same time, the price of mobile phones in the mid-to-low-end market is also extremely low. Often, new mobile phones that have been on the market for a few months will see a price reduction of several hundred yuan.

The H20 was previously launched at a price of over a thousand yuan, but not long has passed since then, and the price has dropped to yuan, and the profit is extremely bleak.

Currently, only in the market with prices above 2,000 yuan, there is still relatively good hardware profit, but it is not high.

China Lianku and Weiku Electronics are both competing hard in the market of more than 1,000 to 2,000 yuan, making everyone's hardware profits extremely bleak.

The reason why domestic mobile phone manufacturers are so competitive and showing a trend of drastic price cuts in the mid- and low-end markets is actually somewhat related to Zhiyun Semiconductor.

All versions of Zhiyun's S100 series are now available for external supply. Now, a large number of domestic smartphones on the market use Zhiyun S100 series chips. This series of mid-to-low-end chips is sold at a relatively low price in order to grab market share.

In addition, memory and flash memory using previous generation technology are also available in large quantities and at low prices in China.

The above-mentioned core semiconductor products of Zhiyun are sold domestically, which has an advantage for other mobile phone manufacturers. That is, these spare parts do not need to pay tariffs, thus saving a lot of tariff costs.

In addition, the domestic supply chain cultivated by Zhiyun Technology has also matured and can provide a large number of cheap spare parts, such as screens and batteries.

All these have led to a significant drop in the cost of domestic mid- and low-end mobile phones, which has correspondingly lowered the selling price.

This kind of price-cutting has a side effect, which is that it also makes a large number of international mobile phone manufacturers lose their temper... Domestic mobile phone manufacturers are now making the prices of mid- and low-end mobile phones too low, and these international manufacturers can no longer drive them away, so they are gradually withdrawing from the domestic market one by one.

The strong rise of Zhiyun mobile phones did not completely drive these international mobile phone manufacturers out of the domestic mobile phone market, but a number of domestic mobile phone manufacturers gradually squeezed out these imported mobile phones.

However, because the domestic mid- and low-end market is too competitive and the profits are too low, Weiku Electronics is trying hard to take advantage of the popularity of Zhiyun mobile phones and is determined to launch the Xiaolan MAX series. The reason is simple: this phone has high profits!
However, relying solely on this, Weiku Electronics' overall profit still cannot be increased. After all, the sales volume of MAX3 is also limited, and Weiku Electronics must find more profit space.

Advertising mobile phone, this is the second path Bai Qiwen is looking for for Weiku Electronics.

Bai Qiwen explained his strategic plan in a secret internal meeting: "We at Weiku Electronics must walk on two legs."

"One leg is to continue to pursue the low-spec, high-price route, focusing on the market around 2,000 yuan, and taking advantage of the opaque nature of the offline market to gain more hardware profits."

"The other leg is to develop competitive low-end mobile phones to sell them on a large scale, and finally make money from software and Internet services."

"Walk on two legs, that's the only way to be stable."

(End of this chapter)