Rebirth 08: Rise from copycat phones

Chapter 296 Delisting Plan and Full Screen Mobile Phones

The sanctions storm that lasted for two months finally came to an end. Zhiyun and Fruit were both banned from selling their products, and it is hard to say who suffered greater losses.

But one thing is certain, that is, this loss cannot cause any actual damage to the huge size of both sides.

This is because even before the sanctions were imposed, each side's market share in each other's territory was already small.

Zhiyun's market share in the US has been very low for a long time. Even if we only count the high-end market, it only occupies more than ten points of market share, and it is declining year by year.

In the past, the Zhiyun S9 mobile phone was launched out of nowhere and could compete with Apple in the US market, occupying more than % of the high-end market share. However, it was only a flash in the pan. In just the second year, its high-end market share quickly dropped to more than %.

On the one hand, Apple has been suppressing Apple strongly and has long pursued a low-price strategy in the US market. Due to tariffs and various cost reasons, Zhiyun phones have long been hundreds of yuan more expensive than Apple phones. Then they imposed sanctions on Apple at every turn and banned Zhiyun phones from entering their institutional areas.

On the other hand, the rise of the four-star Galaxy series has given other US operators alternative options.

Overall, Zhiyun's share of the high-end market in the United States has been declining by several percentage points a year. By June of this year, its share of the high-end market had only been around 10%.

This is not a question of whether the phone is good or not, but objective factors in the local market.

When the sanctions storm broke out in June and July, Zhiyun phones' reputation suffered a huge impact locally. The overwhelming publicity that Zhiyun phones were unsafe inevitably affected the choices of many ordinary consumers.

By the beginning of August, Zhiyun's share of the high-end market in the United States had dropped to just 3.8 percent.

At this point, there is actually not much difference between sanctions or not.

This is also the reason why Zhiyun Group was too lazy to struggle, launch various defenses, and quickly withdrew from the market. The cost and benefits were not proportional.

After all, various lobbying activities are very costly, and the little money earned from the US market is not enough to cover the marketing and public relations lobbying costs.

It would be better to just withdraw from the market.

In the view of Zhiyun Group's top management, the US market is not even as good as the Korean market... Although the Korean market is affected by various factors of the local four-star market, and the sales of Zhiyun's various smart terminals are not very good in the local market, at least they will not give you security risks or sanctions at every turn.

As for the fact that local consumers, for various reasons, insist on buying mobile phones from brands such as Samsung or LG, it is hard to say anything wrong about that.

In addition, although there is competition in various aspects between Zhiyun Group and Sixing, there is also a lot of cooperation. The relationship between the two parties is one of cooperation and competition.

A typical example of this cooperation is that Samsung's Galaxy series of mobile phones and some other models of mobile phones have adopted Zhiyun Semiconductor's W series chips, especially the new generation of Galaxy series, which all use the W707 chip.

At the same time, the two parties have also cooperated on screens. Sixing is one of the major shareholders of Huaxing Technology. At the same time, some of the technologies of the flexible screen in the full-screen mobile phone that Xu Shenxue is preparing to launch on the market come from Sixing... Now Sixing's shareholding in Huaxing Technology has exceeded that of LG and Sharp, with more than 20% of the shares, second only to Zhiyun Group's controlling stake.

Sixin has penetrated into the screen supply chain of Zhiyun Group and even Weiku Electronics through measures such as patent licensing and technology investment.

In addition, the two sides seem to be competing fiercely in the memory and flash memory markets, but in fact, they have been playing a tacit game in the past few years. If you raise the price today, I will raise the price tomorrow. If you lower the price, I will also lower the price. Our pace is highly consistent.

Especially in the field of 3D NAND flash memory, Zhiyun and Sixing are like brothers in arms, jointly monopolizing the high-end market in the flash memory field.

So we can see that Zhiyun Group has not suppressed the sales of four-star products in China over the years... Almost all domestic four-star mobile phones use chips from Zhiyun Semiconductor. Why suppress it...

All of Four Star's products are selling very well in China. Although they are not doing well in the high-end market, they are doing well in the mid-to-high-end market. Now they have replaced Apple's position in the high-end market and have become the second largest high-end mobile phone brand in the Chinese market.

In contrast, Zhiyun Group often threatens to sue and ban fruit sales, but has never done anything similar to Sixing.

The relationship between the two sides is one of cooperation amid competition, and is not as confrontational as the outside world imagines.

There is no need to tell the general public about these things.
Given the competitive cooperative relationship with Four Star, Zhiyun’s products have not been specifically blocked in the Korean market...it’s just that Koreans’ consumption concepts are a bit old-fashioned, and the social atmosphere is very averse to imported products.

Therefore, Zhiyun Group's strategy in the Korean market is still to operate steadily, focusing on the young people's market, especially the market of highly educated college students, trying to gradually influence and expand sales through young people. The effect is quite good, and the market share has slowly increased.

Although the Korean market is difficult to enter, it is still possible.

However, the American market, this broken market, is simply impossible to enter because there are too many factors other than business.

So Zhiyun Group was too lazy to struggle and just withdrew.

However, it is worth noting that although Zhiyun products have been banned from sale, the products of another company under Xu Shenxue, namely Weiku Electronics, have not been banned from sale. Its new flagship product, the Xiaolan MAX6, has successfully passed the FCC certification and is ready to be launched in the US market in August.

Many American consumers who are accustomed to Zhiyun phones, especially the Yun OS system and ecological content, have turned their attention to Weiku Electronics' Little Blue MAX6.

Because although Weiku Electronics' Little Blue MAX series is positioned as a mid-range mobile phone, its system and ecosystem are highly similar to the Zhiyun system and ecosystem... After all, everyone on earth knows the LAN OS system, it is just a reskinned version of the Yun OS system.

The underlying code of the two systems is exactly the same, even the punctuation marks.

Therefore, if there is no Zhiyun phone available, then the Little Blue MAX phone from Weiku Electronics can barely serve as a substitute.

Of course...more people are looking overseas, especially to Canada in the north and Mexico in the south.

Zhiyun phones are not banned worldwide, but only in the US market. They are still sold normally in the Canadian market to the north and in Mexico to the south.

Zhiyun Group has included Canada and Mexico in the first batch of markets for the global launch of the S14 mobile phone.

Consumers in the US market can go to these two countries to make purchases.

It must be pointed out here that the ban restricts the sale of Zhiyun mobile phones in the United States, and does not prohibit Americans from purchasing or using Zhiyun products... there is no way to prohibit it.

At the same time, Zhiyun mobile phone is truly all-network compatible and supports various mainstream network standards of operators around the world. Any Zhiyun mobile phone you buy in any country can be used in the United States.

Of course, it is not reliable to expect consumers to take the initiative to buy, so some local illegal elements found a new track: smuggling Zhiyun phones from Mexico and selling them in the US market.

Don't look down on smuggling mobile phones. It seems that the profit is very low, but the risk is low and the quantity is large. It makes much more money than any illegal drugs.

A little bit of trivia: for some illegal armed elements in Mexico, avocados are their economic mainstay, while the illegal drug business is just a small business.

They will do almost anything as long as they can make money.

Then a strange scene appeared. One day, the law enforcement department of Midea discovered that they had seized a batch of thousands of smuggled Zhiyun mobile phones...

This incident even made it to the news, and many people found it ridiculous.

Instead of doing illegal drug business, these criminals are actually smuggling Zhiyun mobile phones. This world... is about to become unrecognizable to them.

In fact, this kind of thing is not only happening in the United States, but is also rapidly appearing in the Chinese market... Apple phones have been banned from sale, but there is still market demand. Since there is demand, there will naturally be supply, so smuggled versions of Apple phones have once again appeared on a large scale.

Of course, these smuggling activities are just minor ones and have no great use or impact on either side. They are just an interesting anecdote.

For both sides, the sanctions storm that has lasted for two months seems to be coming to an end, at least on the surface.

But in areas that ordinary people don’t know, the confrontation between the two sides has just begun.

One of the two parties is naturally Zhiyun, and the other party is not just fruit, but also a bunch of semiconductor companies and even the consortiums behind these companies.

In this world, there is never love or hate without reason, nor will there be sanctions without reason... The reason for sanctions is because of the fierce conflict of interests.

This kind of intense conflict of interests cannot be resolved in a short period of time, nor can it be resolved as ordinary people see it, that is, you sanction me and I sanction you.

There is only so much food on the table. If Zhiyun eats one more bite, the old consortium will have to eat one less bite. Unless a new compromise of interests is reached, or one of the parties is completely defeated, don't expect this conflict to end.

Even at this stage, both sides are still in the stage of minor fights and are very restrained, and many means have not yet been used.

Don’t underestimate the power controlled by hundreds of billions of dollars of capital. Once this power erupts, its impact will be beyond the imagination of ordinary people!
As for why they are more restrained... well, we have to mention the crazy way some people in Zhiyun act.

In the past, when these conglomerates fought, they all claimed to be civilized people and respectable masters. They would drink wine and hug beauties while smiling and watching the thugs fighting below. There would also be rules in the competition... this cannot be used, that cannot be used.

Then what about sanctions, business smears, laws, scandals...

These old consortiums are very familiar with this set of things and are very good at it.

Relatively speaking, Zhiyun is much worse... After all, it is a new consortium, and it still lacks accumulation in various aspects, and some so-called rules are not fully understood.

To be honest, if they really want to play like this, Zhiyun really can't beat them... Previously, the group's senior president Gu Zhiming almost fell in Europe. It's a good thing he ran away quickly, otherwise he might still be in prison now.

The problem is, those crazy people in Zhiyun don’t play these messy games with them, but directly overturn the table.

Therefore, the other side was stunned, and then they broke down one by one: How can you do things like this, be decent, be decent, do you understand?

They are a small group of people at the top of the food chain on Earth. In ancient times, they were all noble lords and very valuable.

Even if we want to fight for interests, we will let the knights and serfs fight, and then we will sit on the side and laugh and talk. How can you directly beat up the noble lords like you do? You have no decency at all!

As a result, people are afraid to even go out now. Even if they go out, they have to be accompanied by a large number of security guards and live in fear... Alas, the social atmosphere has been ruined by you peasants.

In order to avoid further provoking those crazy people in Zhiyun, the other party actually exercised some restraint and did not go too far.

As for Zhiyun, although he sometimes turns the table over, it is not good to do so too much. Most of the time, he does it as a means of deterrence. If he really messes around, it will easily lead to a situation where both sides suffer.

Well, we are all in the global village, so which consortium doesn't have some hidden tricks up its sleeve?
My bulletproof car can't stop a rocket launcher, but can your bulletproof car, Xu Shenxue's?

If people get pushed into a corner and really turn hostile, it will not benefit anyone.

So Zhiyun actually exercised some restraint and did not go too far.

So it became like this, there were conflicts between the two sides, but overall they remained restrained.

This is also after entering August, both sides tacitly stopped the next move, slowed down, and then watched the other side's approach and found other ways to break the deadlock.

In early August, on the eve of the release of the S14 mobile phone, Xu Shenxue had a more formal video call with the head of an old consortium of the other party. After a friendly exchange, they reached several temporary agreements. Each of them would stop first, and I would not mess with you if you didn't mess with me.

This can be regarded as putting a comma on this wave of conflict.

But, it's just a comma, not a period.

This will be a long competition that will last for many years. Don't be in a hurry. Take your time. There is always a way to kill the other party.

Of course... that's the other party's opinion.

Xu Shenxue’s opinion is, let you jump around for a few years, and after a few years, when I have used the scientific research system to come up with some black technologies, I will completely crush you.

The surging trend of scientific and technological advancement has already started and no one can stop it. However, Xu Shenxue has absolute confidence that he was the one who started this wave of scientific and technological progress and that he has an absolute advantage.

After finalizing the temporary agreement, Xu Shenxue instructed Ji Chenghe: "Stop the actions outside for now, but don't stop the necessary preparations and arrangements, lest they tear up the agreement again. Don't pin your hopes on the other party's credibility, and make the necessary arrangements."

Ji Chenghe said: "Understood, our layout and preparations have never stopped. Galaxy Security has already built a basic operational network in the United States. Next, we will use our technological advantages to gain intelligence and greater operational advantages!"

"In this conflict, our technological advantages were quite obvious, especially the AI ​​technology, which played a significant role and gave us a great advantage!" "But the enemy is also actively searching for and attacking our operational network. Three days ago, we were raided in a Mexican base and lost a squad."

Xu Shenxue said: "You can handle these matters. You must do a good job in providing compensation and not let the people who are doing the work feel disheartened."

"These things will come to an end in the future. Reserve your strength first. It will come in handy later!"

Ji Chenghe said: "I understand, I will pass the order along!"

"This matter has come to an end. Let's prepare for the press conference later. This year's press conference is quite special. We need a shot in the arm to boost investors' confidence, especially the confidence of domestic and European investors!"

Ji Chenghe sighed after hearing this: "In the past two months, our stock price has fallen quite sharply. It is now only 510 billion US dollars. This market value is completely disproportionate to our revenue and profits. It is seriously undervalued!"

Xu Shenxue said: "This is normal. Market value is based on confidence, and this round of sanctions has seriously affected investors' confidence. They believe that we will continue to be sanctioned and subject to various restrictions in the future. In this way, we will not be able to maintain our current revenue and profits."

"But don't worry too much about this. I'm ready to start the delisting process. The stock price is severely undervalued, so I can just buy back the shares. It will also be convenient to kick out the US institutional capital!"

“Now we no longer need to share profits with them to ensure development!”

Ji Chenghe was a little worried after hearing this: "Delisting? That's fine, but where will the funds come from? The amount of funds required is too much, I'm afraid it won't be easy!"

Zhiyun Group's delisting from the U.S. stock market was not Xu Shenxue's original plan. In fact, Xu Shenxue originally planned to share profits and maintain its development for as many years as possible. He also hoped to avoid real comprehensive sanctions through profit sharing.

But now it seems that this possibility no longer exists.

Profit sharing can provide a certain amount of development space, but it is extremely limited and will be of no use in the future.

Now Zhiyun and several old financial groups in the United States are on the verge of falling out, so what’s the point of sharing profits?

At the same time, after this round of sanctions caused the stock price to plummet, Xu Shenxue also saw the possibility of buying back shares at a relatively cheap price.

As for the source of funds, this is more complicated. Xu Shenxue still needs to negotiate with representatives of multiple stakeholders to raise funds.

Because the funds required are not a small amount, not as simple as 10 billion or 20 billion US dollars, but at least 200 billion yuan is needed to drive out American capital.

After all, at present, about 18% of Zhiyun Group's shares are listed and circulated, and another 15% of the shares are controlled by various investment institutions in the United States, that is, those large conglomerates, and about 10% of the shares are controlled by European capital.

This time, Xu Shenxue's goal is to buy back 15% of the shares of the American institution and delist from the U.S. stock market, recovering a total of 33% of the shares.

These shares would cost more than 168 billion U.S. dollars based on the current market value of 510 billion U.S. dollars.

But in fact, when reclaiming shares and delisting, it is impossible to calculate based on the current market value. The stock price may rise again in the future, and the final amount of funds paid may exceed 200 billion US dollars.

This is a huge amount of money. Even if Xu Shenxue is the richest man in the world, he cannot come up with so much cash.

To this end, he prepared several financing plans. On the one hand, he sought financing from European capital, which was also an impetus to further strengthen the interests of both parties... How should I put it? If you want the entire European market, you have to share some benefits.

No one is a fool. If you go to someone's house and make a lot of money, but are still as stingy as a miser and refuse to share the profits, then they will have to investigate you for tax evasion every day.

Of course, profit sharing is limited. It is impossible to give them all the recovered shares. Giving them a few points is already a lot.

Then, some investors from other markets can also be brought in. For example, some shares can be distributed to the Japanese market. The Japanese market accounts for a large proportion of Zhiyun Group’s revenue, but the proportion of shares that investors from other markets can receive will be relatively small.

As for the remaining funds, Xu Shenxue needs to raise them from many sources, such as through listing on the Hong Kong stock market or seeking loans from a bank group.

By adopting these three approaches, we will try to raise $200 billion, conduct a wave of share reviews and delistings... and completely part ways with the Americans.

The market doesn’t even give me any, but you still want to make money from me. How can it be possible?

Of course, in the future, American capital can also purchase Zhiyun Group’s shares through the Hong Kong stock market, but that is all regular investment and does not count as special interest distribution.

He said this to Ji Chenghe today because he had already contacted many people and revealed some of the news. Many people were very interested in this and expressed their support.

Several old financial groups in Europe have expressed great interest, saying that money is not a problem. Although old Europe has declined, its financial resources are still very strong. What's more, these shares worth tens of billions of dollars are not taken by one company, but shared by many companies, so the profit will not be much if it is evenly distributed.

Many heavyweight domestic financial institutions have expressed their views to Xu Shenxue that as long as Zhiyun has the need, they can provide at least 50 billion US dollars in funds to increase their holdings in Zhiyun shares. This is a real capital investment and also a conventional financial investment. They are also very optimistic about the future development of Zhiyun and hope to obtain a certain return on investment in the future.

At the same time, they also stated that if Zhiyun’s financing from other channels is not smooth, then they can grit their teeth and provide US$200 billion in credit support. Of course, this money has to be repaid.

Moreover, launching such a large-scale credit support will affect the development of some industries. I hope Zhiyun will handle this with caution and consider the issue from the overall perspective as much as possible.

What this means is that although you have been given credit support, you should avoid using these funds if possible. If you must use them, then use them with caution... otherwise, well, needless to say, everyone can understand the seriousness of the matter.

200 billion in credit support, while the trade surplus last year was only 300 billion US dollars...

You have to be careful and cautious!

Xu Shenxue calculated that he should be able to raise several hundred billion dollars in funds from Europe, and one or two hundred billion dollars from investors in other regions, and then he would probably be able to raise several hundred billion dollars by listing on the Hong Kong stock market, and the rest could be solved by domestic financial institutions.

No problem!

As for his own money... Although Xu Shenxue is wealthy, he doesn't have much cash on hand, only about 20 billion US dollars. However, all of his funds have fixed purposes and are used to invest in semiconductors, electric vehicles, aerospace and other new technology industries. They cannot be used easily.

What's more, the main purpose of this share repurchase is not to make money or not, but to redistribute profits.

Previously, part of the profits were given to the Americans, but now they will be taken back from the Americans and redistributed to European and domestic investors.

This is a redistribution of benefits based on market share.

However, this matter is of great importance, involving more than 200 billion US dollars in financing, and it is difficult to resolve in a short period of time. Xu Shenxue still needs to conduct repeated and in-depth discussions with representatives of various stakeholders before he can finalize a solution.

Although Ji Chenghe is also a core executive of the group, he is unaware of the negotiations between Xu Shenxue and representatives of various stakeholders. He will just do whatever Xu Shenxue says.

After Ji Chenghe went out, Xu Shenxue returned to his desk, half-lying on the chair, and then looked at the sea outside the window.

Having achieved this stage in his career, he can no longer make decisions casually on many things. The many decisions he makes will have many impacts, some of which are good and some are bad.

He needs to think carefully, reduce the negative impact as much as possible, and then increase the positive impact, so that he can steer the Zhiyun Group forward in the wind and waves.

----

After entering August, the smart terminal market has become lively again. Many mobile phone manufacturers took advantage of the fact that Zhiyun and Fruit have not yet held press conferences to launch their new products to seize the market, so as to avoid being overshadowed by the two giants Zhiyun and Fruit after the release of their products and then being drowned in the market.

A typical example is Snapdragon. Their flagship product, the Galaxy series, has been released in the first half of the year for many years. New products were released in April in preparation for the impact of Zhiyun and Fruit products after June.

Other smart terminal manufacturers make different choices based on their own strategies. For example, some companies like to release products in August and September to avoid the first wave of impact from Zhiyun and Fruit products.

But this year is a little different. Because of the delay in Zhiyun's 18nm process, the flagship phone launch conference and autumn launch conference have been postponed one after another. The flagship phone launch conference has been postponed from June to mid-August.

The situation is similar for Apple. They are also facing the delay in mass production of TSMC's 20nm process, which has caused the launch conference to be postponed to September.

Under such circumstances, some mobile phone manufacturers have also changed their practices and started to release their products earlier or further postpone them.

No one wants to launch a new product in the month between mid-August and mid-September and be drowned out by these two products.

Therefore, the period between late July and early August was very busy, and many smart terminal products held press conferences to seize the market.

This also includes Weiku Electronics!

On August 5, Xu Shenxue attended the autumn launch conference of Little Blue, a product of WeCool Electronics, in a low-key manner. However, he just watched as an audience member in the audience and did not go on stage.

The press conference was hosted by Bai Qiwen, who has hosted press conferences for WeCool Electronics many times and is very familiar with the event. At the press conference, he introduced the latest generation flagship phone of Bluemi, Bluemi MAX6, which attracted considerable discussion at the event.

This Little Blue MAX6 is very special because it is a full-screen mobile phone.

Engineers from WeCool Electronics placed the fingerprint sensor of the Bluemax6 on the back of the phone, removed the capacitive touch buttons on the front, and used gesture or virtual button operations instead, and significantly reduced the space on the chin and above the screen.

This makes the front of the Little Blue MAX6 very simple and the screen-to-body ratio is very large.

Although there is still some gap compared with the full-screen mobile phones of later generations, for example, the front camera and other sensors are still above the screen, and it does not use a notch screen or a hole screen, or an under-screen camera, so that there is still a gap above the screen. At the same time, in order to maintain a sense of balance, although there are no capacitive touch buttons under the screen, a certain chin is still retained.

This makes the screen-to-body ratio of this phone incomparable to the full-screen mobile phones of later generations.

However, despite this, this phone has brought great shock to the world.

After all, this is the first time that the concept of full-screen mobile phones has been proposed in the mobile phone industry, and the effect looks amazing. In addition to the 6-inch screen version, this phone also has a large-screen version, the Xiaolan MAXpro version, which uses a -inch screen that far exceeds contemporary mobile phones.

It can be said that, speaking purely of the screen, this phone made history by using a six-inch large screen for the first time.

This mobile phone is also an important part of the Xiaolan brand's strategy to enter the high-end mobile phone market. Although it still pursues a certain cost-effectiveness, it also uses a reticulated screen and relatively better accessories.

This also makes the price of this phone relatively expensive. The 6GB version of Xiaolan MAX32 costs 3399, which is a normal starting price.

However, the starting price of the Xiaolan MAX6 Pro is 64GB, and the price reaches 4099 yuan. A 128GB version is also launched, and the price reaches 4699 yuan.

This is a mobile phone produced by Weiku Electronics, and it is the first time that the price range reaches 4,000 yuan.

Of course, everyone knows that the 128GB 32-inch version will not sell well, and the main products are still the 64GB -inch version and the GB -inch version.

Especially the 32GB -inch version is the popular model.

But no matter what, this mobile phone plays an extremely important role for the Xiaolan brand. Even if it cannot be sold, the price must be raised. It can't just be stuck in the low-end market forever!
Bai Qiwen has always wanted to impact the high-end market with the Xiaolan MAX. He has devoted a lot of effort to the Xiaolan MAX series in recent years. This time, he even introduced the concept of a full-screen mobile phone.

After this mobile phone was released, it immediately overshadowed many other manufacturers' mobile phones that were released during this period.

What about full-screen mobile phones? This is a concept that has never appeared before, and it has attracted a lot of attention.

It has attracted not only domestic attention but also considerable attention in foreign markets.

If this phone is manufactured well, it is possible that the brand value of the Xiaolan phone will be further increased.

It is too difficult to enter the real high-end market, such as the market of 5,000 to 6,000 yuan, and the Xiaolan brand cannot be sustained for the time being, but there is still hope to gain a certain market share in the 4,000 yuan field.

And this is also Bai Qiwen’s goal!

BlueMobile launched the BlueMAX6 series of full-screen mobile phones, which ignited the heat of the smartphone market in early August.

At the same time, it also makes people look forward to Zhiyun’s S14 mobile phone which will be released in mid-August!
After all, Zhiyun’s S series of mobile phones are the real market killer!
Countless people are eagerly looking forward to what new technologies Zhiyun can come up with this year to lead the market trend!
At the end of the month and the beginning of the month, anyone who has monthly tickets can vote. Thank you on rainy days!

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(End of this chapter)