The Millennium Semiconductor Survival Guide.

Chapter 328 Xiaomi’s Southeast Asia Strategy
After Xinxin launched the Yanque and Honghu series chips in 2005, Xiaomi, as a subsidiary of Xinxin, took the lead in starting a war in the Chinese smartphone market.

Before Xiaomi, smartphones from overseas brands such as Matrix, Motorola, Nokia, and Samsung had already appeared in the Chinese consumer market.

However, the prices of these products often start at 5000 yuan, coupled with the fact that China's 3G network has not yet been fully laid out, and people's lack of perceptual understanding of smartphones, even the most popular overseas smartphone Mphone2 has not made much of a splash in China.

This is just like the Apple ownership rate among young people in small towns in third- and fourth-tier cities is far lower than that of Redmi. Redmi is the enlightenment product that brings them into contact with smartphones and mobile Internet.

Why is Xiaomi known as the first passion for young people in later generations? From the first smartphone to the first time being cut off by the stock market, to the first tram, Xiaomi's main focus is to have no threshold.

When Xiaomi was listed on the Hong Kong stock market, its winning rate was [-]%, making it the largest retail IPO in the world.

Xiaomi has been falling since its listing, with the lowest decline nearly halving, and it has been sideways for two years.

Of course, this is also Mr. Lei’s painstaking efforts, allowing young people to be cut off by the stock market for the first time. After being cut off by Xiaomi, they can no longer touch the stock market. Hong Kong stocks and A-shares are not good things.

Xiaomi is not currently on the market, but due to its excellent price-performance ratio, it has an excellent reputation among a large number of consumer groups.

After the release of Xiaomi smartphones last year, Xiaomi smartphones, Xiaomi computers and bicycles were hailed as a three-piece college set.

After Xiaomi successfully swept through China, its production capacity in the first year mainly met the domestic market, and at the same time it was advancing its Southeast Asia strategy.

At present, the first target for Chinese enterprises to expand overseas is Southeast Asia, which is more similar to Chinese culture.

The overseas target of Chinese Internet companies is Southeast Asia, and the first overseas target of mobile phone companies is Southeast Asia. Xiaomi has made the same choice as everyone else.

Quite simply, because the distance is the closest. The distance is not only the distance of product assembly, but also the distance of management.

When Chinese companies go to Europe or South America, they almost have to completely reconstruct a management structure based on the local market, but this is not the case in Southeast Asia.

The only thing that needs to be adapted is the labor law. Foreign trade unions are not as affectionate as Chinese trade unions and completely ignore all kinds of management behaviors that infringe on workers.

Even in South Vietnam, which has followed the same path as China, the trade unions are also extremely strong and have not been reduced to a functional department that distributes welfare.

China's rapid rise in just 30 years is inseparable from the fact that the Chinese people have transferred a large amount of rights and interests in pursuit of material life and a better future. The rise of China's manufacturing industry in the past 30 years is also inseparable from the hard work of the vast number of workers. .

Back to Xiaomi, with its cost-effectiveness strategy, Xiaomi is unrivaled in Southeast Asia. With pricing starting from [-] RMB, it has a large audience in first-tier cities in Southeast Asia such as Lion City, Kuala Lumpur, Ho Chi Minh, and Bangkok.

Southeast Asia is currently an economically underdeveloped region. Due to historical reasons and international division of labor, they lack strong industries, and more of their GDP relies on selling natural resources.

Like Indonesia, which relies heavily on the export of natural rubber, coal, palm oil and tin ore, Thailand is similar.

There is no talk of money in these places, but their willingness to consume is much stronger than that of Chinese people.

The Chinese people's natural sense of crisis and awareness of savings make it impossible for them to earn [-] yuan and spend all of it.

But the consumer groups in Southeast Asia, if they earn [-] yuan, they can really spend [-] yuan.

Xiaomi’s pricing almost hits the acceptance threshold of consumers in first-tier cities in Southeast Asia.

Coupled with the halo effect of Zhouxin, Xiaomi is expanding very quickly in Southeast Asia.

"Does Newman know? This is a mobile phone brand founded by Newman. You only need to spend 2000 RMB to enjoy the same experience as the 6000 RMB Mphone2."

(There is no conversion here, because when it comes to many countries and regions in Southeast Asia, rmb is used as the currency unit)

Xiaomi has adopted an open franchise strategy in Southeast Asia. Franchisees will naturally adopt exaggerated publicity methods in order to sell their products.

The clerks at Xiaomi offline stores in Southeast Asia directly compared Xiaomi with Mphone2, and then used the company also founded by Zhou Xin as the final summary, making consumers think that Xiaomi is the replacement of Mphone.

You can enjoy 280.00% of the experience of Mphone[-] at one third of the price.

This sounds a bit exaggerated. In fact, Xiaomi is a product in 2005, and Mphone2 is a product in 2003. 80.00% is not too much.

Let Yu Dazui come to Southeast Asia to play by himself, and he can make it a [-]% experience.Franchisees are still conservative.

Seeing Xiaomi's rapid expansion in Southeast Asia, opening more than 2006 offline stores in just one year in 50, with sales exceeding [-], many friends and businessmen were restless.

TCL, which originally operated directly in Southeast Asia, started to open franchises. TCL, which had always adhered to the direct sales strategy and only opened stores in first-tier cities in Southeast Asia, has now opened up franchises.

Overseas brands like Samsung, Nokia, and LG have been deeply involved in Southeast Asia for many years. Their previous strategy was to rely on dealers to distribute their products.

An offline store may sell mobile phones of many brands, similar to the model of Suning and Gome. Overseas brands have taken this route before.

Now seeing how successful Xiaomi has been in opening specialized stores, they are starting to try it too.

Among them, the fastest moving companies are BenQ and HTC.

After the Honghu and Yanque chips were released to the public, what surprised Xinxin executives was that the first manufacturer to purchase large amounts of chips was HTC.

Wang Xuehong, the founder of HTC, personally led a team to Shenhai to chat with Xinxin.

"Professor Hu, you are also my teacher. Although I majored in economics, not the School of Electrical Engineering, I came to attend your class when I was at Berkeley." Wang Xuehong made a very high profile at the beginning of Xinxin Low.

She is the daughter of Wang Yongqing, the founder of Formosa Plastics Group. HTC is the brand name. This company is called HTC Electronics, which was first engaged in PDA and PDA OEM.

HTC helped OEM handheld computers for a series of manufacturers such as Plam, HP, and Apple, and once became the leader in the field of handheld computer OEMs, occupying one-third of the market.

After the rise of smartphones, HTC began to focus on the HTC brand. By the time Wang Xuehong led the team to seek cooperation with Xinxin, HTC had already launched two smartphones.

Both smartphones are based on their past experience building handheld computers and use Microsoft's smartphone operating system.

The technologies it carries are all from well-known manufacturers, and the price is quite conscientious. However, it has been tepid in the market and received a mediocre response.

There was no discussion at all, and the volume on mainland forums was even lower than that of Dopod, the mobile phone brand they invested in.

This has to be said to be a blow to Wang Xuehong, who is determined to make a career in the field of smartphones.

It was precisely because of previous failures that HTC decided to defect to Xinxin.

Hu Zhengming smiled and said: "Mr. Wang is an admirable senior figure in the business world, and Ms. Wang founded such a successful company as Hongda at such a young age. You also have a lot to learn from me."

Wang Xuehong said: "Compared with Xinxin, HTC is still too immature.

The reason I came here is to establish a strategic partnership with Xinxin. We will fully rely on Xinxin in the field of smartphone chips.

We plan to purchase 500 million Honghu chips and 500 million Yanque chips from Xinxin at one time. "

This is a big deal. There are many manufacturers purchasing Yanque chips, but not many manufacturers purchasing Honghu chips.

What everyone wants is to use Xinxin’s CPU to measure sales, and wait and see what mobile phone processors Intel and Texas Instruments will launch.Hongda was the first company to purchase 500 million pieces of Hongda at one time.

Hu Zhengming nodded: "It's a great honor. We will give Hongda the biggest discount. In addition to the price discount promised by Xinxin at the press conference, we will also try to give some additional discounts.

At the same time, Hongda will also be given priority in shipping. "

Hu Zhengming was very happy to win over one company after another. Because Hongda was backed by Formosa Plastics, it was not short of money at all and seemed to be a long-term player in the market.

It would behoove chip manufacturers to build a good relationship with such long-term players.

Tesla was able to sustain losses for many years in the early days until new energy exploded, not because of Tesla and Musk's super financing capabilities.

If Accountant Jia can raise funds to this day, it is really possible for the LeTV empire to succeed.Weilai has been losing money every year, and the financial report shows that every car produced is compensated for every car produced. It’s not like it has persisted for so long.

These companies still rely on deception for financing. Hongda's financing relies on the halo of Formosa Plastics, and Wanwan Capital will continue to support Hongda.

In later generations, until 2021, HTC can easily sell its mobile phone license to Google for US$11 billion, and it is still a non-exclusive license.

Wang Xuehong saw that Hu Zhengming was not relenting and did not directly answer her request for a strategic partnership, so she continued: "Professor Hu, in addition to purchasing new core chips for hardware, we will also consider new core for software.

Our operating system plans to use Xinxin’s Android.

I believe Android is now in its infancy and needs support from major mobile phone manufacturers. "

This is pure inducement. You don’t have to worry about selling the chips, because mobile phone processors are currently an exclusive product. If you don’t buy it, someone will.

But the operating systems are different. Let’s not talk about the big mobile phone manufacturers who all have their own mobile phone operating systems. Small mobile phone manufacturers have to face the temptation of Microsoft.

Hu Zhengming is not sure whether Xinxin’s Android will be successful.

Therefore, HTC's support is particularly critical.

"What do you need new cores for?" Hu Zhengming was very calm. There is no pie in the world.

Wang Xuehong said: “HTC needs the right to launch new chips from Xinxin in the future.

This is Yanque 1 and Honghu 1. We need the right to launch new mobile phone processors in the future.

One month after HTC goes on sale, other phones can go on sale. "

This request is neither too much nor too much, but it is too much. It is equivalent to giving HTC a higher priority than Xiaomi.

At the same time, Hu Zhengming also admired the other party's trust in Xinxin and believed that Xinxin's mobile phone processors can have strong competitiveness in the mobile phone market in the long term.

This is because the right to launch Qualcomm's Snapdragon is valuable only if Yanque and Honghu are strong enough. Xiaomi has to grab the right to launch Qualcomm's Snapdragon every year. The outside world doesn't know or care about the right to launch MediaTek's mobile phone processors.

Hu Zhengming said: “I need to think about it because it also involves Xiaomi.

We also have consumer electronics brands, but I think we can agree in principle.

My idea is that there needs to be requirements, and HTC cannot sell it too poorly.

For example, after the HTC mobile phone equipped with the latest Finch chip is released, 500 million units will be sold within one year.

If not, then the right to launch next year will be taken back. When will HTC be able to sell so many products within one year after the launch, and when will Xinxin give HTC the right to launch again.

Of course, this is a temporary plan I thought of. We can discuss the details later.

But in principle, I agree with the cooperation between Xinxin and HTC. "

Later, HTC and Xinxin officially reached a cooperation, and it was Hu Zhengming's condition that HTC's new phones equipped with Yanque and Honghu chips would sell 500 million units within a year.

In the current market, this is not a high requirement.

The sales volume of vehicles equipped with chaffinches and birds equipped with swans are calculated separately.

In return, Xinxin’s Android camp has gained a heavyweight supporter.

Because of its position in the Android camp, the relationship between HTC and Microsoft deteriorated almost instantly. HTC directly announced its withdrawal from the handheld computer market this year.

It is precisely because of the strategic cooperation between HTC and Xinxin that HTC quickly followed Xiaomi's strategy in Southeast Asia and quickly opened exclusive stores after opening franchise rights.

BenQ's keen sense led them to adopt the same strategy.

By the end of 2006, taking Kuala Lumpur as an example, 10 Xiaomi stores, 8 HTC stores and 6 BenQ stores had been opened. It was jokingly called the smartphone alliance from China by the locals.

Foreign countries do not distinguish between Wanwan mainland and Wanwan mainland. In their eyes, they are all Chinese manufacturers.

Xiaomi's rapid expansion has occupied two major elements at the same time, the most imaginative industry - mobile Internet, and the most imaginative scale - overseas markets.

It is rare for a domestic manufacturer to possess both of these elements, so Xiaomi is the most coveted by domestic financial institutions.

"Bobo, will Xiaomi be listed on the market? How much potential does Xiaomi have, and it is a manufacturing industry, so it should be in need of funds.

Does Xiaomi have any need to go public and raise funds? Zhang Peng asked.

The listing of Xinxin Semiconductor is at best a US$500 billion IPO project, and the listing of Xiaomi is at least a US$[-] billion IPO project. This is the difference between a box cake and a birthday cake.

Chen Bo shook his head: "Don't think about it, at least in the short term.

Xiaomi is not short of money at all. According to the gossip I got, it is too easy for Xiaomi to get money.

The bank's loan interest cost is at most 3 points, and Shenhai-like financial institutions lend money to Xiaomi for even 2 points.

When Xiaomi goes to raise funds, the fee to the institution alone is more than two points, right? "

Zhang Peng thought to himself, why do these idiots provide so much low-cost funds?Where can I make money with the bank's 3 points interest?Can Shen Hai show some moral integrity?Doesn’t this not give us a way to survive by investing in banks?
"Seven o'clock."

Chen Bo nodded fiercely: "Look, we are looking for you to do an IPO, and the funds raised will cost you 7 points. We are looking for banks, and the capital cost is 3 points at most. How can Xiaomi go public?"

　Thanks to the leader of Little Car House for the reward!My second ally!

　　Thank you very much, I feel the power of crow.
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(End of this chapter)