novelones Chapter 217 Selling 1 unit? 251?
Chapter 217 Selling 1 unit? 251?
"Mr. Zhang, this price..." the legal counsel whispered, "is much lower than the prices we offer to other clients."
Zhang Song ignored him.
If the quantity is large, the board of directors is unlikely to disagree.
After all, this price isn't as low as Transsion's. As long as it doesn't exceed that bottom line, it's acceptable.
He stared at the numbers on the contract, his mind racing with calculations.
The initial cost of the Mtk6573 was approximately NT$700, equivalent to about RMB 150. However, its cost has now dropped to around RMB 120.
The rice company's price is 165 yuan, which is slightly higher than the cost price.
A profit of 45 yuan.
As a smartphone chip, this is already a low-profit product.
However, a production volume of 1500 million units is enough to fully utilize the entire production line's capacity. Once economies of scale are achieved, costs can be further reduced.
Next year's next generation of chips will make this order even more profitable.
Make a fortune!
More importantly, signing this contract is like tying rice to MediaTek's chariot.
In any case, rice is definitely more reliable than Chrysanthemum Factory and Transsion.
As for the entire Chinese market, Qualcomm and Nvidia are both vying for a piece of the pie. If MediaTek doesn't step up its efforts, it will really only be left with scraps.
"President Lin's sincerity is very high, I can't refuse." Zhang Song picked up the pen and pulled over the contract.
"Mr. Zhang, should we discuss this with the board of directors again?" the legal counsel reminded him again.
"No need." Zhang Song signed his name on the contract. "I'll take responsibility if anything goes wrong."
…………
When the news reached the rice company, Lei Jun, who had been holding back for a long time, finally posted a Weibo.
"Two days ago at the press conference, someone joked that we were popularizing large memory versions, but then we turned around and released low memory versions. This is indeed a very interesting operation."
They also said that we talk about universal benefits, but when costs increase, we start to calculate and say that our popularization is just a slogan, and that simplification is the norm.
We won't go into too much detail about this, because if we really want to popularize it, we need to show some sincerity.
After negotiations with multiple suppliers, the rice company officially entered the 100-yuan market, and the new product will be released soon.
No empty promises, no trademark stuffing, just enough memory, reasonable prices, and no tricks to fool our customers.
I also advise our competitors to stop constantly telling others what to do and to tone down their low-end offerings. The market for affordable rice is coming, and that's what true technology for the benefit of all is all about.
The news sent shockwaves through the entire mobile phone industry.
The Glory rice at 799 is already cheap enough. Now that a rice company has entered the market, given the history between the two companies, will they start fighting again?
How cheap will phones really be then?
799? Or 699? Or even lower?
At the same time, the official Weibo account of DaMi (a rice brand) started a countdown.
There are 27 days left until the Redmi brand new product launch event. (October 28th)
Lei Jun's Weibo post also attracted a lot of excited Mi Fans.
"Keep it up, Mr. Lei! I'm not a Xiaomi fan, but the Enjoy series does have great specs. However, I don't like the TaiShan system. You absolutely have to release a product that can compete with it!"
"I support budget phones. The Enjoy series has been on the market for so long, why haven't they lowered the price? Who gave them the guts? They need to be taught a lesson."
Lei Jun sat in his office, looking at the comments section where Mi Fans were cheering him on, with only one thought in his mind.
Yu Dazui, Shen Fei, this time he won't lose...
After all, he hadn't had a good night's sleep in days. Every time he closed his eyes, all he could see in his mind was Yu Dazui's iconic smiling face.
Besides, there is another person who haunts him relentlessly... He can't see his shadow, but he can feel his presence at all times.
Meanwhile, the other party was constantly stealing the plans from his mind.
Although the other party did not show up, Lei Jun knew perfectly well that this person was Shen Fei.
…………
May 20th, Kyoto Rice Company.
Lei Jun hasn't had a proper rest for over half a month?
It wasn't because of working overtime, but because of a nightmare. The closer the press conference got, the more afraid he was of what tricks Yu Dazui would play on him again.
But instead of being attacked by Huawei, the supply chain played a cruel joke on him.
That cost accounting sheet looked like a joke his math teacher was playing on him.
Lin Bin pushed open the door and walked in, holding the latest supply chain quote in his hand.
"Mr. Lei, have they all gone up?"
Lei Jun took the form, glanced at it, and his expression turned even uglier.
The Mtk6573, an upgraded version of the 6574 (a toothpaste-like device), has seen its price reduced by 10% by MediaTek, but the prices of all other components have increased.
Flash memory increased by 8%, storage by 12%, batteries by 3%, and even packaging boxes increased by 2%.
The effects of the 3/11 earthquake in Japan continue, with the global semiconductor supply chain facing shortages. Chinese mobile phone manufacturers are scrambling to secure the remaining production capacity.
[Neon: I survived the earthquake, and you're all making me take the blame? Don't you have any conscience?]
"How much did it cost?" Leibusi asked.
Lin Bin shook his head: "The BOM cost of the first-generation Redmi is about 950 yuan at current prices."
Including R&D, marketing, distribution channels, and after-sales service, the total cost is 1050 yuan.
"Our expected price is 799, which means we'll lose money on every unit sold?"
"251?"
Lin Bin told him the final answer directly: the number was very bad.
It's almost as good as being a complete idiot.
Lei Jun closed his eyes and began to consider whether it was worth it.
Selling one unit results in a loss of 251 yuan; selling 100 million units results in a loss of 2.51 million yuan.
1000 million units would cost 25 billion.
The company's Series A valuation is 7.5 million, which seems like a lot, but its total valuation is only equivalent to 50 billion RMB.
If Redmi sells 1000 million units, the hardware costs alone will eat up half of its market value.
This is not something to make money, nor is it any kind of hope; it's a cannibalistic thing.
"How about...we wait a bit longer?" Lin Bin suggested tentatively, "until the prices in the supply chain come down before we ship."
Li Xin told him that this product would be a huge hit once it was released, but it would also drag the rice company into the abyss.
But at this moment, in order to rid himself of the nightmare in his heart, Lei Jun shook his head.
"We can't wait any longer." He suddenly stood up and looked at Lin Bin, saying, "The second series of visions is definitely on its way."
Do you remember what I told you? If the K3v1 is brought down to the 100 yuan price range, we will have no chance to enter the market at all.
Lin Bin nodded.
He understood Lei Jun's meaning: if Redmi launched now, it would be selling at a loss to seize market share. If it were launched a few months later, there wouldn't even be a chance to sell at a loss.
"Then... could we reduce the RAM to 128MB? And the storage to 1GB? And remove the included second battery?" Lin Bin suggested. "That would reduce the cost by at least 100 yuan?"
Lei Jun sat down again to consider the feasibility of the plan.
The price range of 100 yuan is for the elderly, who do not need large storage capacity.
1GB of RAM is enough; Honor next door also uses 1GB.
It seems they're not wrong to do it this way.
"Old Lin, do you remember why we made Redmi?"
"To snipe Glory?" Lin Bin said subconsciously.
Lei Jun glared at him, and Lin Bin immediately changed his tune...