Chapter 279: The Chip Dilemma

Xu Xincheng replied without thinking: "Chip." ”

Lucy nodded lightly and asked, "Steve, how much do you know about chips?"

"During the R&D and production of H6 smartphones in Hongfei's AI Division, I have been assisting General Manager Li and Director Qiao of the R&D Department. ”

"Among the products you sent here before, there is the H6 smartphone, which I studied carefully and looked at the chip in particular. As it happens, I would like to know about your experience in developing and producing H6 smartphones, especially when ordering chips. ”

The experience of developing and producing H6 smartphones was a very unforgettable experience, because that experience gave him, General Manager Li, Director Qiao and others very profound lessons, especially in chips. During that period, they really didn't know how much thought, energy and time they spent on that little chip.

After successfully developing the H6 prototype, General Manager Li found the leader of the global mobile phone chip industry, Q Company, through a good friend of his in Silicon Valley, USA, and contacted the general manager of Q Company in charge of the Chinese market. Then, General Manager Li and Director Qiao flew to San Diego, California, USA with great expectations and visited the headquarters of Q Company as scheduled.

However, that experience was listed by General Manager Li as one of the three most failed and undignified negotiations in his life.

After Director Qiao returned to the company, under Xu Xincheng's inquiry, he told him what happened to them with a depressed expression.

Director Qiao said that the general manager of Company Q did not come forward at all on the grounds that he had something important to do temporarily, and only appointed one of his three assistants to communicate with the two of them.

However, when the assistant listened to General Manager Li's explanation of the H6 mobile phone, he immediately said in a contemptuous tone: "We never take small orders. ”

According to the plan, Hongfei AI Division only produces 500,000 mobile phones, after all, it was the company's first mobile phone, and General Manager Li's original intention was just to test the water, and then increase production when the second and third generation mobile phones were released.

Of course, General Manager Li and Director Qiao knew that Company Q would not accept small orders, and according to the information they had learned, normally speaking, the minimum order that Company Q could accept was 5 million chips.

The reason why they flew all the way over was because they found out that Company Q had a batch of chips in stock, and the number was just 500,000. They were originally ordered by an Indian mobile phone company, and that company ordered a total of 600 pieces, and 500,000 pieces were the last batch of goods. However, three Chinese mobile phone brands entered the Indian market with lightning speed, and the Indian mobile phone company was seriously defeated in the fierce competition, and its sales fell off a cliff, and there were big problems in operation and funds.

According to the terms of the subscription contract signed with Company Q, they had already paid off the purchase price of the 500,000 chips, but they could not pay the expired royalties to Company Q. As a result, Company Q ruled that the other party was in breach of contract according to several overlord clauses in the contract, and forcibly deducted the 500,000 chips as compensation for breach of contract.

Although it is only the tail goods of other mobile phone companies, the 500,000 chips have still become a sweet spot for major mobile phone companies to compete for, especially those with relatively weak mobile phone companies.

General Manager Li immediately explained his intention: "We heard that you have 500,000 chips in stock, and we want to buy those chips." ”

The assistant smiled contemptuously and said a little coldly: "Generally speaking, we don't work with companies that have just set foot in the mobile phone industry. However, we can also make an exception for you. ”

General Manager Li hurriedly said gratefully: "Thank you very much!"

"Don't say thank you first, listen to our quote and key terms. First, $7.5 per chip, second, the payment must be in full when it is delivered, and third, an additional $2.5 in royalties for each mobile phone sold. Finally, the above terms are final and non-negotiable. ”

When Director Qiao said this, he was so angry that he slapped the desk twice, so hard that it shook the pen holder on the table.

Xu Xincheng was also very angry and shouted: "Oh my God, they are too much, their quotation is much higher than the normal market price, and that clause is an absolute overlord clause." ”

However, he quickly calmed down, after all, he was not a person who had experienced it, he thought about it and asked, "They probably don't want to cooperate with us, so they deliberately asked for a price, right?"

Director Qiao scratched his hair with his right hand, which was already a little messy, sighed loudly, and then said: "On the way back to China, I talked to Mr. Li, and our conclusion was, first, they really don't want to cooperate with companies like us that are new to the mobile phone industry, because they judged that it is difficult for companies like us to become bigger and stronger in the mobile phone industry, and it is difficult to become big customers in the future; ”

"In demand?"

"Yes. First, those chips are produced by Q company, and there is an absolute guarantee in quality and performance, and the mobile phones made of those chips are much better than ordinary chips in terms of performance, and can set a higher market price; second, Q company suddenly has 500,000 chips in stock, which is a very good opportunity for those relatively small mobile phone companies, for those who want to test the waters of the mobile phone industry; third, there are several Chinese companies that are vying for those chips, and they are all enterprises that are new to the mobile phone industry like us, and they are also negotiating with them, and each one wants it。 There are more monks and less porridge, so the price of porridge has risen. I don't think the final price will be as outrageous as the quote, but it will be much higher than the normal market price. ”

Xu Xincheng said helplessly: "So that's the case!"

Director Qiao sighed again and said with emotion: "China's mobile phone companies, everyone's profits are already very low, but while we tighten our company's belt and lower the welfare and salary of the workers in our factory, we are scrambling to send money to American companies, and send a lot of money. Why is that?"

Director Qiao didn't wait for Xu Xincheng to answer, so he asked and replied: "It's all because people have mastered the core technology." ”

Later, General Manager Li and Director Qiao found two foreign chip companies, but the results were not better. In the end, General Manager Li could only settle for the next best thing, found five domestic chip companies, and chose one of them to cooperate.

However, it turns out that the chips produced by domestic companies really can't be compared with the Q company, and its performance is worse than two grades, and as a result, the final H6 smart phone is far from meeting the standards of the original design in terms of performance.

In the past two months, the sales of H6 have been very poor, only about 110,000 units have been sold, and the root cause is that the performance of the mobile phone is not ideal because of the poor performance of the chip, and the customer experience is poor after purchase.

Xu Xin became Lucy, and roughly recounted the experience of General Manager Li and Director Qiao.

Lucy listened attentively and asked, "Steve, what kind of feelings did you feel and what conclusions did you draw from that experience?"

It's already begun