Chapter 778 - Unaffordable Price War (Three More, Ask for Subscription)
Many Intel directors have expressed their incomprehension of how the price can be reduced so much.
"Those media in the outside world exaggerated and said that China was poor. There may be political reasons for that. But you are also well-known people in society, and you are all people with outstanding knowledge. How can you have such a shallow understanding!" Grove scolded, "Huaxia, it is true that it used to be poor, but since they set up an open city, Huaxia's economy is booming!"
"Last year, the computer market in Huaxia traded 7.9 million units! We sold more than 5 million chips in Huaxia! And in the future, I believe that the number will double exponentially every year! Huaxia has a population of 1.3 billion, which is a very large market. If we give up, then what we will give up will not be a mere $200 million or $300 million in net profits this year, but maybe tens of billions, or even hundreds of billions of dollars!"
Grove said solemnly.
"Are you serious?" said many of the directors in astonishment.
"I'm serious!" Grove said with a serious face, "don't underestimate the Huaxia market. It's a huge market, and it's incredible. We have to take it seriously!"
The crowd looked at Grove and fell into deep thought.
If this is true as Grove says, then it really needs to be approached with caution. Even, it doesn't hurt to make profits.
After all, being a human being is about taking a long-term view. And not the small profits in front of you.
"China has a population of 1.3 billion, and its GDP last year was $863.7 billion! Although it is only one-tenth of that of the United States, it ranks seventh in the world in the world," Grove said.
The crowd was really shocked this time.
Unconsciously, China's GDP ranks seventh in the world.
The seventh largest GDP in the world, plus so many people. This market is huge!
"We support price reductions!" a number of directors nodded.
For the bigger picture, these directors are not ordinary people, not stupid and ignorant. They also feel sorry for the profits of this price reduction, but if they let it go, if the market is completely occupied by Loongson, even if it is a low-end market, they will lose a lot.
Especially, it's not just Huaxia. If Loongson sits firmly in Huaxia and then enters other markets, then you are in trouble. They sat down with the appearance of a terrible opponent.
Therefore, the danger must be stifled in the cradle.
Therefore, the feedback on the market is very fast.
Celeron 2 processor, after the launch, immediately reduced the price to an extremely low price of 480 yuan. This price is 100 yuan cheaper than the first generation of Loongson.
Although it is said that the 1st generation of Loongson is 300MHZ, this performance is better than Celeron 2. However, the price is 100 yuan short, which is very tempting. In addition, Intel also plans to increase the chip processor frequency of Celeron 2 to 300MHz to cope with it.
However, due to inventory pressure, Grove still decided to sell out the 233,266MHz chips currently on the market first.
Otherwise, if you directly transition to 300MHZ now, then these chips before will be in vain. Qin Feng's side will take it back and refit it. But for Intel, the price is too great.
After all, once Intel takes it back, it will be the global market. The chips involved are tens of millions.
This is the old saying: the boat is small and it is better to turn around.
Qin Feng's side can recycle at any time, but Intel's side can't.
"480 yuan!" Qin Feng was stunned.
This price was a bit unexpected by Qin Feng. I didn't expect Intel to be so ruthless.
"Qin Feng, can we keep up!" Lei Jun's tone was also a little uncertain.
"Keep up! Since they want to play a price war, then keep up!" Qin Feng snorted coldly, "Isn't it just a price reduction, who is afraid of whom!"
"We sold it for 460 yuan, and then the shipping price, we also lowered it to 360 yuan!" Qin Feng said.
"360 yuan! Then we will earn 10 yuan!" Lei Jun took a breath.
It's really not profitable. You must know that this price is a price calculated by the company according to the cost of land, machinery and equipment, labor costs, etc.
And that's not even counting the huge amount of research spending. This point is excluded.
As a result, now the company sells CPUs and only earns 10 yuan. How can this make money? It's less than the vendors are making money.
Traders can also earn dozens of yuan when they get the goods, but the CPU OEM only earns 10 yuan. This is no longer considered to be profitable, or even lost.
After all, with the horrific scientific research funds, it is a loss.
"Qin Feng, if it goes on like this, there will be no profits, we still have to conduct scientific research, and the funds won't last long!" Lei Jun calculated, "Not counting the investment in expanding production, we can last for a year at most!"
Before that, the CPU earned 50 yuan, which was okay. As long as you sell more, it is no problem to make small profits and quick turnover. But if it becomes 10 yuan, it won't work.
This sells 10 million pieces, and only makes 100 million. It is far from being able to subsidize the investment in scientific research and other projects.
As for the funds, let's find a way!" Qin Feng said in a deep voice.
Either way, we have to hold on first.
"Sell for 460 yuan!" Many bosses in SEG Plaza were also a little shocked by the price. It's all an avalanche of prices.
Although they don't have much knowledge, they also understand that Intel is a giant and has a lot of money. Fighting a price war like this, Qin Feng's side is simply not an opponent.
If this continues, sooner or later, Qin Feng will be unable to make ends meet.
Finally collapsed!
But this kind of thing is also something they can't interfere with. They can't do much either. All they can do is to help Qin Feng sell more CPUs.
The price war has officially begun!
Qin Feng's Loongson 1 sells for 460 yuan, and Celeron 2 sells for 480 yuan!
Between the two performance, the Celeron 2 233 is 50% worse than the Loongson 1st generation 300. The price is not much different.
Under such a choice, there is no doubt that consumers will still choose Loongson.
However, soon Intel lowered the price again, this time reaching the freezing point, and Celeron 2 233 sold for 430 yuan!
"Qin Feng, what should I do?" Lei Jun was already trembling, completely unable to control the fear in his heart.
Intel only cut the price a little bit, but it completely killed Loongson's living space.
Celeron 2 sold for 430 yuan. How much do you sell Loongson?
Selling for 420 yuan, does the merchant make any money? How much do you give the merchant?
"At present, merchants take goods, and in the hands of those third- and fourth-tier cities, Celeron 2CPU, they can still have a profit of 20-30 yuan. The second-level dealer is about 380 yuan, and the first-level dealer is probably about 360 yuan. If we want to drop, I'm afraid there will be no profit at all!" Lei Jun said, "Shall we follow up?"
Is this still a follow-up? The entire Kyushu IT Technology Co., Ltd. is full of gloom.
Intel is too strong! And they are too weak. Not only is the technology incomparable. The price advantage is no longer there.