Those Years When I Was Forced to Top the Forbes List

Chapter 261 Kunlun
Spreadtrum is on the offensive, and MediaTek isn't idle either.

The second emergency meeting of senior management this month was held at the headquarters in Hsinchu, Taiwan, and was expanded to include some shareholders who had strong opinions.

"The word has already spread among many manufacturers! They're all asking us for low prices, starting at eight dollars! And they want the latest chips!"

"What were those mainlanders thinking?"

Spreadtrum is such a troublemaker!

"Oh my god, this won't do! We're operating at a complete loss! Our profit margin is going to be nonexistent!"

While the shareholders were arguing, MediaTek's senior management, unlike at the last meeting, remained remarkably calm and united in their stance.

“Since they dared to negotiate high-value delivery defaults with a large company like Bird, they must have signed production capacity contracts with mainland contract manufacturers. They are under great pressure because they can’t sell their products.”

"According to feedback from the channels, Spreadtrum's new major shareholder has a private equity firm and a mobile phone manufacturer. They are using a smartphone and a star fund product as negotiating tools to win over manufacturers and distributors."

"What? Private equity products? That's allowed?"

"It is said that this private equity firm has very high returns, with an annualized rate of 500%, but the investors did not get any returns after investing and have recently lost some money."

"Haha, are you here to set up a factory? Or are you just using the guise of doing business to scam people out of money?"

A burst of laughter followed.

At this moment, Tsai Ming-chieh, who was in the main seat, did not speak, but instead frowned as he answered a phone call.

After a long pause, he put down the phone, slapped the table, and said in a somber tone:
"Everyone, please be quiet. We just received news that Tianyu Langtong, the company with which we reached a cooperation agreement, has contacted us and requested to postpone the signing. They may have already been poached by Spreadtrum."

As he spoke, his gaze sharpened.

“Other companies have exclusive contracts with us and won’t easily switch sides, but now they’re using information from Spreadtrum Communications to pressure us for lower prices.”

"We can no longer back down from Spreadtrum. Even if we have to eat chaff and wild vegetables, we must crush them."

"Bang!" He slammed his hand on the table.

"We invited everyone here to reach a consensus. From now on, regardless of whether it's Huaqiangbei or a legitimate factory, all the latest integrated chips will be sold for $8.3! We won't let them get a single order! If they dare to sign a production monopoly contract, we'll make them pay up!"

"Xu Zhiqiang, you're in charge of contacting Tianyu Langtong. This matter is entrusted to you. Also, the manufacturers in Huaqiangbei must be made aware that Spreadtrum has lost Datang's support and is completely unqualified to conduct 3G business!!"

Shenzhen.

"Excellent, Mr. Zhou, you deserve the most credit this time!"

Chen Xuebing received the good news from Tianyu Langtong even earlier than MediaTek, and he was very happy.

Tianyu mobile phones were a hit for three years in their previous life, and their ability to conquer new territories is beyond doubt. In this life, they have entered the smartphone era ahead of time. Whether they can steal Meizu's fortune remains to be seen.

With this card, Spreadtrum is more confident about its bet in the short term, and in the long term, the proportion of mobile system users in Southeast Asia and Hong Kong will definitely be higher.

"Hehe, I'll finish signing the contract here and come back later. By the way, Mr. Chen, Mr. Rong recommended a battery supplier to us."

"Huh? Who?"

"BYD! The one that makes cars, you know them?"

Hearing this, Chen Xuebing grinned.

"I know, they can't do it."

If he said this in later generations, it would probably shock people.

The pioneer of new energy, the creator of the blade battery, a company that Charlie Munger considers great—do you dare say it's not good?

Indeed, it doesn't work.

Chen Xuebing had long considered BYD.

They started by making nickel-cadmium batteries, then moved into mobile phone components, and are now one of the biggest drivers of new energy vehicles.

However, BYD just reaped the benefits of the automotive industry with its F3 model last year and this year, claiming that you can own a sedan that looks like a Toyota Corolla for 7.38 yuan.

Now, this car and the Jetta have become the "bloodthirsty duo" for short- and medium-distance trips within counties at major bus stations.

BYD has recently announced on multiple occasions that it will invest the profits from its F3 and mobile phone batteries into the research and development of hybrid vehicle technology.

BYD is already a large company, and it's difficult for a big ship to turn around. Besides, they're doing just fine, so there's no need for them to turn around.

Chen Xuebing, on the contrary, found another king along the new energy line.

King Ning.

CATL (Contemporary Amperex Technology Co., Limited).

CATL had not yet been founded. He looked up the founder, Zeng Yuqun, and found that Zeng Yuqun had founded an ATL company in Hong Kong.

He was pleasantly surprised to discover that the company had changed its polymer lithium-ion battery from a pouch battery to a liquid lithium-ion battery back in 2000, and had successfully solved the problem of gas production and swelling.

This company was acquired by the Japanese company TDK for $1 million in 2005. The company website was recently under renovation, so no technical information about them could be found.

Singularity has already contacted their Dongguan company for battery supply and has been in talks for some time. Both parties are interested, so there is no rush for the battery.

Chen Xuebing was not disappointed that the company was acquired by Japan, because Zeng Yuqun's team would use the money to do bigger things in the future.

However, ATL currently holds the bargaining power in Japan, and the price of pouch lithium batteries is very high. If they want to find OEM manufacturers for low-end devices, they will probably have to cultivate their own.

Thinking of this, Chen Xuebing quickly hung up the phone after a few words and called Xu Yunfeng.

As soon as the call connected, Xu Yunfeng said:
"Brother, you're going to strike it rich! We've just started the public beta promotion and investors have already come knocking on our door! They want to invest eight million!"

Chen Xuebing ignored him: "Where is your dad now?"

"Hey, listen to me! Tencent! Tencent is contacting us! They want to invest in our company!"

Chen Xuebing frowned: "Then you're not far from death. Where is your father now?"

"why?"

"I'm asking where your dad is, don't make me beat you up."

Chen Xuebing revealed his fierce side, and Xu Yunfeng finally remembered the reputation of Brother Bing for beating up the instructors, and obediently said:

"Inspection".

What are we examining?

“Building a factory! He used to work with others, but now he’s planning to start his own company! He was originally planning to go next year, but after hearing that I’m making money and that someone is investing in me, he’s not going to leave me any money. He’s planning to open a factory in Zhuhai this year.”

"Zhuhai is quite close. Bring him to Shenzhen. I have something to discuss with him."

“I already told you, I can’t control it,” Xu Yunfeng said, then suddenly stopped: “If you want him to invest in your fund, I can get him to come.”

"Besides, if you don't come, I'll refund your investment."

"No, brother! I'll ask, I'll ask now!"

Twenty minutes later, Xu Yunfeng called back: His father has been extremely busy these past two days, and he will personally go to Zhuhai on Tuesday to bring his father over.

Chen Xuebing glanced at his phone calendar; it was already July 29th.

From the meeting with manufacturers in Huaqiangbei on July 1st until now, we've been fighting for a full month.

He's already exhausted all the tricks he could, and he's done more than enough by leading from the front. Now that he's finished with what he has to do, all he can do is wait for time to unfold.

Time is precious, and I should go out and open up new battlefields.

In the past year, the size of China's internet market (mainly including investment, user consumption, advertising monetization, and technical support) was around 800 billion yuan.

About one-tenth of that comes from mobile SP (Service Provider) business revenue.

It can be seen that this market is still not very large. With such a small amount of money, dozens of so-called "giants" are sharing it. Compared with China's annual infrastructure investment of 2-3 trillion yuan, it is just the tip of the iceberg.

But the internet has already begun to change people's lives, and even governments.

The application of Web 2.0 (self-generated content) has led to a doubling of blog users in six months, the emergence of opinion leaders on the internet, the rise of online public opinion, the opening of online reporting channels by the Central Commission for Discipline Inspection, and the launch of national government portal websites.

Tudou.com completed its second round of financing, and Youku was established last month, marking the beginning of the online video era.

The open beta of "Zhengtu" in April reached 300,000 concurrent users on May 31, driving a new monetization model of "free-to-play + item-based monetization".

E-commerce has grown by more than 40% in the past year.

These changes were both familiar and unfamiliar to him. He was familiar with their final form, but he didn't know when they would lead to a qualitative change from quantitative change. Every time he saw a major change in them, he felt like slapping his thigh.

Damn, I didn't get on the bus again!

The rapid pace of development in this era made him, a reborn individual, feel a strange sense of unease.

The safe zone is shrinking every day; we can't stay here any longer. We need to go out and collect money and equipment.

Despite his thoughts, the enemy not only did not surrender to him, but also dared to launch a fierce counterattack.

MediaTek employees suddenly became incredibly enthusiastic, rallying their supporters in various markets in Huaqiangbei:
"MT6235! $8.3! That's 67 RMB!"

Datang's legal team also reorganized its presentation strategy and split into two groups. One group went to Shenzhen and stormed into the Huaqiangbei market to demand that Spreadtrum service stores immediately suspend 3G services. The other group went to Shanghai to begin negotiations with Spreadtrum.

The so-called negotiation was just a formality, denying Spreadtrum the opportunity to file a complaint with the ITU.

The news of Spreadtrum being stripped of its 3G development rights spread like wildfire in Huaqiangbei within just one day.

If this matter is still under Chen Xuebing's control, then MediaTek's price war is simply unexpected. The price of $8.3 was offered without hesitation, which is almost 20 yuan lower than the original price.

This extra 20 yuan creates room for manufacturers whose production costs are only two or three hundred yuan to engage in price wars.

On the morning of August 1st, Lu Weibing came to ask for instructions.

"Chairman, what should we do? Should we surrender?"

Although Chen Xuebing was gritting his teeth, he still managed to remain rational.

"Don't lower prices. Withstand the pressure and have our people go to each market stall to remind them that MediaTek's prices are temporary and won't last long. Phone prices cannot be lowered. Lowering them is easy, but if it triggers a price war in the domestic low-end market, business in Huaqiangbei will become increasingly difficult. Also, immediately contact MediaTek headquarters. Their actions are affecting the market. Ask them if they want to make enemies of the entire market. It's one thing for them to lower prices with manufacturers, but a price reduction of 20 yuan in Huaqiangbei has far more impact than just 20 yuan. If they don't stop properly and cause serious consequences, I don't mind publicizing their competitive tactics and letting the whole country thank them for the benefits they've provided."

This price drop is completely different from the situation when he stockpiled chips last year. At that time, the market demand for turnkey phones surged, and supply could not meet demand. The temporary backlog caused prices to fall, but they could rise back up with demand. Now the market has stabilized, and the shipment volume in Huaqiangbei is different from the past. Once the overall price drops, it will have a nationwide impact, and there will be no chance for a correction.

For the first time since he started doing business, he softened his stance and turned the tables, protecting the market for his competitors and giving them a chance to correct their mistakes, because his mindset had changed.

He has become one of the masters of the market and needs to have a broad perspective.

Indiscriminate price cuts not only affect business, but also the passion and motivation of all R&D personnel on this front.

With just one phone call, before noon, I received a call from MediaTek headquarters.

Cai Mingjie looked at the phone records and Zhanxun's reaction copied by his secretary and fell into deep thought.

After a long while, he sighed.

“This time we were not very rational. We asked Huaqiangbei to adjust the price back to $9.5. We said that our recent price reduction was to clear out a batch of stockpiled chips, and now that it has been cleared out, we would reduce the price by $0.5 from the previous $10 price to thank everyone for their support.”

Tsai Ming-chieh used the word "event" to give the impression that this price reduction was temporary.

"If it's $9.5, it's only $0.5 lower than Spreadtrum, which is probably still within their profit margin. What if they lower their prices instead?" the secretary asked.

"Then that's not about protecting the market!" Tsai Ming-chieh's tone turned fierce again: "If they lower their prices, we'll immediately lower ours too, always staying 0.5 lower than them!"

Will the genuine manufacturer raise prices?

"No price increase."

The secretary received instructions to prepare to leave.

Cai Mingjie thought for a moment and then called his secretary back.

"If Spreadtrum doesn't take the opportunity to lower prices within a week, please help me contact this Mr. Chen. We can negotiate, reach an agreement on the sales price, sign a memorandum of understanding, maintain the current market structure, and not interfere with each other's established partners. Other markets can compete fairly."

Chen Xuebing's reaction changed Cai Mingjie's mind to some extent, and he was prepared to give Zhanxun a way out.

But if President Chen were to find out, he would completely disregard it.

Today is Army Day.

At 20:17 PM, a loud military song was playing from the loudspeaker downstairs in the F1 R&D building at Huawei's Bantian base.

Two Buick GL8s without registered license plates entered through the side door and arrived downstairs.

Wu Ping, Chen Datong, Chen Wenkang, Zhang Hao, Zhou Guangping and other technical elites from Spreadtrum gathered at Huawei tonight to conduct technical reconciliation.

More than ten people.

Chen Xuebing was the last to leave the car, and then got out after receiving a phone call.

"I can answer any concerns Ms. Rong may have right now."

"She didn't mention the price, but she was worried that she wouldn't be able to get the phone after hearing that we had lost the 3G development rights."

"Is this it? Tell her that this phone can do 2G as well, and we'll countersue her about 3G very soon! Datang can't stop us! If we don't get the 3G development rights within a year, I can give her the phone's system and configuration for free, and she can find other chip manufacturers to cooperate with for production!"

"Okay, can this clause be written into the contract?"

"You should study how to write it."

"I can write it, but Mr. Chen, what's the name of this intelligent system?"

After a moment's hesitation, Chen Xuebing uttered a name that he had originally planned to announce at the press conference.

"Kunlun".

After saying that, he hung up the phone and walked towards the group of people waiting downstairs in the R&D building.

After he finished his call, a middle-aged man with a crooked smile came over and shook hands with him.

"President Chen, I've heard so much about you! From what you just said about Datang, it must have been a real headache for you lately, right? I don't like their attitude either! I used to be the head of 3G R&D, and now I'm in charge of the European department. President Ren specifically asked me to come back to assist your R&D!"

Chen Xuebing looked at the slightly teasing smile on the other side and felt that the face looked somewhat familiar.

After a quick look, I realized who it was and shook hands with the other person.

"Wow! Far ahead! I've heard so much about you!"

Yu Chengdong: (⊙ω⊙)?

(End of this chapter)