Guoke mobile phone is Spreadtrum's largest customer and its largest financier, and the research and development of Spreadtrum Snapdragon chips is largely due to Guoke's financial support. In order to maintain the brand image, Guoke has the exclusive right to supply Snapdragon chips, but Spreadtrum has the right to use the patents obtained during the research and development process. However, Huawei wants to take a stake in Spreadtrum, and many tacit understandings are difficult to maintain. The Snapdragon project can only be separated, roughly 50% each of Guoke and Spreadtrum. There are also various patent authorizations in the middle, and Huawei's stake in Spreadtrum will inevitably have cooperation between patents, so I won't repeat them one by one.

The technical direction of Spreadtrum's chips must also be adjusted, and Snapdragon will focus more on the processing of graphics and images, that is, on photography, video, film and television playback and game functions. Spreadtrum Kirin focuses more on the computing and processing of chips, communication signals, etc., and various performances will be more balanced. Of course, many things will not be directly pointed out or used for publicity. It is self-evident that defective products are always uncomfortable, in fact, there is no perfect technology and products, and many of them are selectively ignored.

The development of Guoke, Huawei, and Nut mobile phones can basically ensure the healthy development of Spreadtrum Snapdragon and Kirin chips, but there are still too many problems to challenge Qualcomm. Spreadtrum has more than enough self-protection, but it is still not enough to implement patent protection for companies that use Spreadtrum chips.

In addition to Snapdragon and Kirin chips, Spreadtrum's chip technology in multimedia devices such as tablets and TVs is also quite high, including chip shipments of feature phones are also catching up with MediaTek. As for the drone main control chip in cooperation with DJI, as well as the security camera chip in cooperation with Hikvision, there has also been good progress. The R&D team of more than 5,000 people is the largest team in the IC field in China, and there are more than 3,000 R&D teams around the world. On the contrary, because of the current oversupply, there are not many administrative sales teams.

Spreadtrum's revenue last year was not much, only more than 3 billion soft sister coins, less than 600 million US dollars (about 100 million US dollars in the same period in history, there is an exaggeration here, and it is generally impossible to do it at all), but this year's sales exploded, and the shipments rose sharply, and in less than half a year, the sales exceeded 600 million US dollars, and there was close to 5 billion soft girl coins in 5 months (non-profit). I really hope that Qualcomm and MediaTek will never react, so that such a good day of high growth can last for another year and a half. However, there is still some gap with MediaTek,Their family's 09-year revenue is about 22 billion soft sister coins,Although the outbreak of this year's smartphone market has little to do with them,But the increase in revenue is certain。 In the second half of the year, Qualcomm and MediaTek will have TD-based mobile phone chips launched (CDMA chips have long been available), and market competition will intensify.

MediaTek's chips are mainly for the P system, Qualcomm and MediaTek's optimization of Android and Google Android is not enough, and power consumption control is not good. In the short term, it will have little impact on Spreadtrum, and in the long run, Qualcomm's technology and strength can quickly catch up with the chips designed by Spreadtrum.

It is also difficult for Spreadtrum and Huawei to reach an agreement on the price of the shares, a fast-growing enterprise, how to price is a science, Huawei has no experience in venture capital, with traditional thinking, mainly relying on financial data for analysis, it is almost impossible to get a satisfactory result for both parties. If you refer to the market value of MediaTek, it is more than 100 billion soft girl coins, about 15 billion US dollars (MediaTek's market value in the same period in history is about 26 billion US dollars, and now due to the impact of Spreadtrum, the market value has decreased by nearly half). If you compare it according to the revenue data, Spreadtrum's valuation is between $25~$30. However, Zhou Shi's direct investment in it has exceeded 1.5 billion US dollars (500 million US dollars for the acquisition of Spreadtrum, and the rest is 1 billion US dollars for company expansion, personnel recruitment, research and development, patent purchase and production), as for some hidden expenditures, such as the contract between shell and nut, the special care of Singapore's licensed semiconductors, and various overseas relationships, etc., it is difficult to quantify.

According to Spreadtrum's conservative estimates, this year's revenue scale can reach 12 billion soft sister coins (in history, iPhone mobile phones sold 46.6 million units in 2010, 47 million Blackberry mobile phones, and 220 million other smartphones, after the change, due to competition, iPhone sales declined, and the total sales of Fruit Shell and Nut mobile phones exceeded 50 million units, and Fruit Shell pad can sell almost 10 million units, and the average price of these chips is 30 US dollars? Even if Qualcomm's chips are still used, the minimum guaranteed revenue can be $1.5 billion), according to a profit margin of about 35% and a price-earnings ratio of about 15 times, the valuation by the end of the year can barely reach $10 billion.

"Mr. Zhou, this can't be done, the acquisition of Spreadtrum is only 500 million US dollars, and you will increase the valuation of 10 billion US dollars in less than two years, and Huawei will not use it like this no matter how rich it is. Ren Zhengfei found Zhou Shi to negotiate again.

If Huawei's current revenue and profit are calculated at 20 times the price-earnings ratio in the same industry, Huawei's market capitalization will probably not exceed $55 billion. Guoke's valuation scale will not be much worse than his, of course, Guoke has not much to do with their cooperation. The main reason is that Huawei wants to have a certain say in Spreadtrum, and the effect is not good if there is less investment, and the investment is too much, which affects its own development.

"As you can see, the smartphone industry is booming, the net profit margin of the chip industry is more than 35 percent, and Spreadtrum, which has taken the lead, has achieved explosive growth. The gap between us and Qualcomm in the field of mobile chips will not be very large. And the scale of revenue growth is enough to support such a valuation. Why don't we bet, set a few goals, and calculate the valuation according to the specific revenue scale at the end of the year?"

Of course Ren Zhengfei is unwilling, there are two emerging mobile phone companies such as Fruit Shell and Nuts, and there are many articles that can be done.

"We can't accept this kind of valuation. "Ren Zhengfei

"Since that's the case......." Zhou Shi slowed down his speech, Ren Zhengfei was shocked, didn't he want to cooperate?

"In that case, we're going to divest the Spreadtrum Snapdragon asset! I can't think of any other way than that. "Zhou Shi, although after knowing that they want to cooperate with Huawei, Guoke and Spreadtrum have always wanted to make this asset independent, but how to open their mouths is a knowledge. Well, now, the high valuation is enough to put Huawei off from it.

"Spreadtrum Snapdragon?" Ren Zhengfei hesitated, this is the chip mainly used in Guoke mobile phones, and the addition of the Guoke brand naturally makes it have the nature of high-end chips.

"Yes, yes, but Huawei wants to have the right to purchase Snapdragon chips," Ren Zhengfei

"This is a complicated issue, and even if you agree to Huawei's procurement requirements, there will definitely be many restrictions in order to maintain the brand image. Zhou Shi did not directly refuse

"It's understandable that there are limitations!" said Ren Zhengfei

"Then let them continue talking!" Zhou Shi

Spreadtrum's most profitable chips are Spreadtrum Snapdragon chips, plus other expensive research projects will remain in Spreadtrum, so that almost half of the market value is removed.

(End of chapter)