The Millennium Semiconductor Survival Guide.

Chapter 314 A sudden steep curve

The relationship between Lenovo and Intel is very good. How good is it?
Since Lenovo started making personal PCs, it has only purchased Intel CPUs for more than ten years. It was not until last year, that is, in 2004, that Lenovo launched its first personal computer equipped with AMD chips.

Lenovo is praised by Intel as its strongest ally in China.

Therefore, when Lenovo enters the field of smartphones, it hopes to replicate its success in the personal PC era, which is to be highly bound to Intel.

Lenovo originally planned to use its good relationship with Intel to obtain low-priced smartphone chips, and also take the low-end route by leveraging its supplier advantages.

“Looking at it now, the original cost-effective route is no longer feasible.

Intel's reply is very ambiguous. In fact, it is impossible for them to lower the price to a level lower than that of Xinxin's Finch series.

If we want to take the cost-effective route, we can only choose the new core series CPU. However, the cost of operating system development, the cost of other accessories, including the profit margin reserved for dealers, make it almost impossible for us to achieve the same price as Xiaomi.

Xiaomi can use its own Android system, and the mobile operating system has almost no cost. At the same time, because Xinxin has a huge semiconductor industry chain, their costs on core components can be kept at a very low level.

In addition, the supply chain system built by Matrix can be used directly by Xiaomi. It is unrealistic for us to compete with Xiaomi in this field in terms of cost performance. "Lenovo executives analyzed their disadvantages very objectively.

When Yang Yuanqing saw the price behind Yu Dazui at the Xiaomi press conference, he knew that their original plan was destined to fail.

It will take about half a year for Samsung and Texas Instruments to launch SoCs, and even longer for Intel. When Intel delivers smartphone SoCs to Lenovo, Lenovo will develop operating systems and mobile phones based on SoCs. It will not be until next year at the earliest. It will be a day lily every time. It's cold.

“I think we should adopt the strategy discussed internally after attending the new chip launch conference.

That is to first launch Lenovo's smartphones based on Yanque and Honghu, and then wait for Intel's products to be released, and then launch Lenovo's high-end flagship series based on Intel's smartphone SoC. "

"This is a huge market. The question is how do we explain to Intel that we will purchase a large number of new core chips. Will this affect our cooperative relationship with Intel?"

"This is not a problem! We want to purchase Intel chips. The problem is that the gap between Intel's smartphone chips and Xinxin's products is too great in terms of cost performance.

We are a company and we need to consider corporate benefits and shareholder interests. Intel will understand. "

"Last year's cooperation between Lenovo and AMD caused a rift in our cooperative relationship with Intel. This time we chose new chips. Although Intel's chips will be used in our high-end series in the future, will this further deepen our relationship? deterioration?
I know we have a cooperative relationship with Intel. The problem is that the personal PC market is more important to Lenovo, and we need to rely on Intel in many places.

Smartphones are just incremental growth for Lenovo, while personal PCs are Lenovo’s basic base. We must pursue growth while maintaining the basic base, rather than abandoning the base base for the sake of increment.

In the past two years of competition with Xiaomi Computers, we have lost too much market share that should have belonged to Lenovo. At the same time, Xiaomi's pricing strategy caused Lenovo to change its own pricing strategy, causing us to lose a large part of our profits. .

It even triggered collective dissatisfaction among the dealer system. Last year, all major Lenovo dealers in North China switched to HP and Dell.

At this critical moment, the most important thing for Lenovo is to protect its fundamentals, and maintaining the relationship between us and Intel is the most important thing. "

After Xiaomi released the nationally produced console, it had a huge impact on Lenovo's sales. The first was individual consumers. More than 18% of male consumers in the age group of 35 to 60.00 switched from Lenovo to Xiaomi. Consumers who purchased the machine for the first time Some even choose Xiaomi, and only consider Lenovo unless there is no other choice.

Later, some government-led enterprises and institutions purchased new office equipment, gradually changing from Lenovo to Xiaomi. If the former is just a disease of ringworm, then the latter is a serious problem.

You must know that the revenue Lenovo obtains from individual consumers must be shared with the huge dealer system. As a company, Lenovo can only get [-]% of this cake at most, and [-]% must be divided among the dealers.Procurement by government agencies and state-owned enterprises is where most of the profits come from.

If Intel hadn't given China the lowest price for the CPUs it sold to Lenovo last year, Lenovo's financial report for the whole year would have been very ugly.

Yang Yuanqing is very envious of Xiaomi. Whether it is a personal or corporate level, Lenovo has always been criticized for trade, industry and technology. Yang Yuanqing took over Lenovo from Liu, and naturally took over his cause and effect.

Before the birth of Xiaomi, from the Chinese Academy of Sciences, one of the shareholders behind Lenovo, to the media and consumers, they had a deep love and responsibility attitude toward Lenovo, believing that a technology company of its level needed to take on the responsibility Social responsibility requires breakthroughs in technology research and development and technological innovation.

With the rapid rise of Xiaomi and Xinxin, the Chinese Academy of Sciences may still have similar ideas. Neither the media nor consumers expect any technological breakthroughs from Lenovo.

Even though Lenovo claimed to be jointly developing computer CPUs with Intel last year, it was widely revealed by Lenovo employees on social media that it had bought the naming rights for joint research and development. In fact, the person who broke the news did not have any evidence, but netizens could not stand it and believed it.

Only after losing it did he realize how precious what he had was. After losing his expectations, Yang Yuanqing was very envious of Xiaomi. It had the support and recognition of consumers, and at the same time, it also found a path that suits him in terms of technology research and development.

But he can't do it. With Lenovo's asset-liability ratio, it's almost impossible to transform, not to mention that the shareholders won't let him transform and engage in independent research and development. Foreign HP and Dell have proven that this model can be successful. Why? Take the harder road?
Diehard supporters of Intel like Lenovo, out of business considerations, first purchase Yanque and Honghu chips to launch smartphones, let alone other mobile phone brands.

Consumers in China are happy. Almost overnight, the market was flooded with promotions from major brands, claiming that they were about to launch smartphones priced around 2000 yuan.

The only thing limiting the development of smartphones in China is the communication network. Currently, 3G networks are only rolled out in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen and a very few second-tier cities. Most areas cannot enjoy 3G networks even if they buy smartphones. 2G Browse text-type pages on the Internet at best.

The fact that 3G networks are not widely available in second- and third-tier cities has not hindered consumers' enthusiasm. It is also a mobile phone. Even if you just go to a Xiaomi store and use the Xiaomi mobile phone to connect to wifi, and then download stand-alone games and play them back, it is much more interesting than a feature phone.

Not to mention the WeChat application that comes with Xiaomi phones, which has quickly become the most popular instant messaging software in just three months.

Xiaomi sold 200 million mobile phones in three months because Xiaomi's production capacity is only 200 million.Users who can grab Xiaomi phones from the official website or offline stores can resell them at a price increase of [-] to [-].

It even caused many college students to go to Xiaomi stores to queue up during the holidays, waiting for Xiaomi to release the goods.

So much so that scalpers lament that they can’t steal college students.

There are no restrictions on Xiaomi's offline stores, except that people queuing up can only buy one unit at a time. According to the quantity of goods released in each offline store, it will be sold out without having to queue up.

Because Xiaomi sells so well, all offline stores are directly operated and the quantity is limited, so there are endless voices of opening up online franchises. "I would say the most important thing Xiaomi should do is to open up franchises. Now, offline stores sell [-] units every day on weekdays and [-] units on weekends. Users who really support Xiaomi can't get it at all."

"Have you ever thought about one thing? It's not that Xiaomi doesn't want to sell more, but that its production capacity can't keep up?"

"Whether Xiaomi is not good enough or is deliberately creating the illusion of panic buying, I support the poster's statement that it is open to franchises. Now offline stores are few and unbalanced.

Can you believe that there is no Xiaomi store in Jiangcheng, which has more than a dozen universities?There are five Xiaomi stores in Shenhai, and the first Xiaomi store in Jiangcheng will not open on Jianghan Road until July this year.

This is too unbalanced. "

"I have been opening a Dell store before. Since the birth of the Xiaomi brand, I have been paying attention to whether they will open franchising. I will call them almost every once in a while to ask. They don't seem to have even the slightest intention to open franchising. .

Xiaomi’s marketing strategy and sales methods are completely different from other brands. "

“Having technology means you have confidence. The technological advantages allow Xiaomi to reduce costs and take the ultimate cost-effective route in China without worrying about lack of users.

How much you can produce will be digested by the market.

Not to mention, Xiaomi’s after-sales service is almost always responsive. It takes a long time, but that doesn’t mean it won’t help you solve your problems. "

"I get angry when I talk about this. Xiaomi has three after-sales service centers in Jiangcheng, but not a single store."

Xiaomi's extreme pricing strategy made it the absolute king throughout the first half of 2005.

Its advantage in the chip industry allows Xiaomi to always be the first to release the latest smartphone chips with new cores, just like future generations of Google phones will always be able to use the latest Android system.

Colleagues in the mobile phone industry are focused on Xiaomi's booming sales, overwhelming reputation and good applications of Xinxin smartphone chips.

Internet companies are focusing on Tencent, which is leveraging Xiaomi to make a strong move in the mobile Internet field.

NetEase's headquarters is in Hangzhou, one of the few second-tier cities with 3G networks.

In the conference room on the third floor of the NetEase headquarters building, there is a line chart on the screen. There are several applications on it, such as WeChat, NetEase Bubble, QQ, MSN, etc. The vertical axis is the number of users, and the timeline is from 2001 when Mphone entered China. country to the present.

Since the beginning of this year, the number of WeChat users has experienced exponential explosive growth, and there is a clear gap between WeChat and several other applications.

"This is the change in the number of users of mobile phone instant messaging software since the concept of smartphones was introduced to China by the new president.

In the era of Mphone1 and Mphone2, whether it was a Matrix smartphone or a smartphone from other brands, the minimum price was 5000 yuan.

Due to price factors, the number of users of mobile instant messaging software has always been around one million. WeChat users have about 50 users. NetEase Paopao’s market share ranks behind WeChat, QQ and MSN.

Although we are fourth, the gap between us and first is very small. Our number of users is 20.In the Internet era, this user gap can be reversed in a week or even a day.

But with the release of Xiaomi mobile phones in March, everything changed. In just three months, the number of WeChat users exceeded 3 million.

There are as many WeChat users as there are Xiaomi mobile phones sold.

The combination of software and hardware makes WeChat's advantages clear at a glance. At the same time, Oasis and NewPay are also growing rapidly. "The person in charge of NetEase Bubble looked very helpless when reporting to Ding Lei.

After Tencent sold Weibo to Microsoft, it launched Oasis, a green application of the same color as WeChat, targeting the Chinese market.

These three applications are pre-installed applications on Xiaomi mobile phones and are expanding rapidly with the expansion of Xiaomi.

NewPay has long been divided. NewPay in the Chinese market and overseas market belong to two companies. Among them, the shareholders behind NewPay in China, except Zhou Xin, are almost all state-owned capital of China.

So at the moment, China’s WeChat payment is NewPay, and there is no special WeChat payment.

The person in charge continued: “And during this period when Xiaomi monopolizes the entire smartphone market priced at 2000 yuan, WeChat’s advantage will only get bigger and bigger, and the user gap between them and us will only widen.

There is no improvement trend in the short term.

It is impossible for Xiaomi to accept our request for cooperation and make NetEase Bubble a pre-loaded application for Xiaomi.

Most of the domestic mobile phone manufacturers such as Lenovo, TCL, and Bird refused, and the few who were willing to talk seemed very ambiguous and started talking about the price of the pre-installed phones.Foreign manufacturers such as Nokia and Motorola directly refused.

The only foreign manufacturer that said it could talk was Sony Ericsson. They said they could talk, but their appetite was greater. Sony wanted to strategically invest in NetEase. "

At present, NetEase has launched their flagship work "Fantasy Westward Journey", and recently the number of registered users of Fantasy Westward Journey has successfully exceeded 2000 million, which makes Sony want to get involved.

The person in charge of NetEase Bubble has a headache, and Ding Lei also has a headache. In the process of competing with Tencent, he feels that he is not competing with Tencent, but with the entire Xinxin entire huge system. The resource support Tencent can obtain is NetEase Unthinkable.

The mobile instant messaging market was small before, but NetEase internally estimates that it will be a very large market, even bigger than personal PC communication software. In addition, the gap with WeChat has not been big before, so NetEase has not given up on this. A piece of investment.

NetEase was still thinking about when to make an effort to bring WeChat down. As a result, the dimensionality reduction attack at the hardware level directly made all other applications become the others part of the statistical caliber.

(End of this chapter)