Qualcomm has had a hard time lately.

The company's market situation can be described as "full of dangers" and "full of dangers".

It can be said that it is on the verge of "life and death".

From last year to this year, Qualcomm has laid off three times in one year, and 80% of R&D personnel have been laid off to save personnel expenses.

The company's main executives, voluntarily cut their salaries, and their salaries were only 20% of what they used to be.

and all sorts of other throttling measures, desperately trying to save money and avoid expanding losses.

Even so.

Despite all his efforts, this year, Qualcomm's net loss was still as high as 3 billion!

Qualcomm, which has been profitable for many years, has suffered such a big loss for the first time.

How is this possible?

You must know that Qualcomm holds tens of thousands of communication technology patents in its hands, and only charges patent fees, and can make a lot of money every year.

Like Nokia, the company has had ups and downs for more than 30 years, had many crises, and was acquired and sold several times, but it did not go bankrupt, but relied on collecting patent fees, came back to life, and occupied a place in the market.

So as long as the people on this planet still need communication functions, the relevant communication companies will not go out of business, it is difficult to go out of business!

The same goes for Qualcomm.

But Qualcomm also has to make money!

Without enough profits, how can Qualcomm executives and employees enjoy themselves materially?

Without enough profits, how can the follow-up R&D work be carried out...... It is important to know that any patent does not fall from the sky, but is smashed with money!

However, now Qualcomm not only has no money, but has suffered huge losses.

What is the reason for this?

Inside the office.

Zheng Junming, President of Qualcomm Z Country, reported to President Christian Amon and said: "Mr. Amon, the company's revenue in Z Country this year has plummeted by 70% compared with last year, and it is expected that it will be difficult to exceed 30 billion yuan. ”

"30 billion?"

Christian Amon was taken aback and frowned: "Why is our performance so bad?" ”

He slapped his head hard, stretched out his hand and complained to Zheng Junming: "Peter, I listened to your suggestion and moved the company's headquarters to country Z, and 70% of the executives also came to country Z, trying to adapt to the environment here, and even learned a lot of words in Z, but why?" Why do consumers in country Z still not want to see us, or choose to abandon us? ”

"What the hell are we doing there badly to be treated like this?"

Christian Amon looked deeply shocked, extremely lost and depressed, he attached great importance to the market of country Z, and even left his hometown to come to this mysterious eastern country, frequently took the initiative to show goodwill, and showed enough sincerity in order to achieve commercial success.

The result?

Reality poured cold water on him, and Qualcomm lost in the Z country market, and its revenue plummeted by 70% compared with last year.

This filled his heart with frustration.

There was a hint of the idea of withdrawing from the market in country Z, but I immediately dispelled it.

Qualcomm can't afford to leave the market in country Z.

Especially after entering the 5G era, only in country Z, Qualcomm's 5G chips can achieve better sales and collect more patent fees.

The reason is that there is only one country that has really stepped into the 5G era! Only country Z has invested trillions of dollars to deploy 10 million 5G base stations across the country, covering all cities.

In other countries, due to cost, population density, technical strength and other reasons, the density of 5G base stations is not only lower than that of country Z, but also the usage fee of 5G services is also higher, resulting in only a small range of coverage, which is difficult to fully roll out.

One of the most intuitive data is: in addition to country Z, the number of 5G base stations in other countries and regions around the world is only less than 8 million.

This leads to the fact that Qualcomm's 5G chips are not easy to sell at all, and it is difficult for most users to experience the speed and convenience brought by 5G.

Of course, another reason is that the proportion of patent fees extracted by Qualcomm is too high, traditional 4G mobile phones, Qualcomm charges 3.5% of the patent fees, and 5G mobile phones, but also add 5%, a total of 8.5% of the patent licensing fee.

It means that for a mobile phone priced at 3,000 yuan, Qualcomm will take away 255 yuan...... This extra part is naturally borne by the consumer.

However, due to the incomplete coverage of 5G signal, the use experience is similar to that of 4G mobile phones.

5G packages are more expensive.

So after thinking about it, it's better to continue to use 4G mobile phones.

Therefore, Qualcomm's 5G chips can only achieve a certain sales volume in the Z country market.

In addition, Snapdragon CPU has a good reputation in the country Z market and is welcomed by consumers, and the revenue of country Z once accounted for 75% of Qualcomm's global revenue.

This is also the reason why after the outbreak of the "backdoor incident" of the Android system, in order to win the trust of consumers in country Z, Qualcomm stared at severe criticism and was willing to move its headquarters to country Z.

But even if Qualcomm has done so much, in the face of a 70% plunge in revenue, Qualcomm executives can't help but feel helpless and frustrated in their hearts.

"Mr. Amon, it's not a matter of our marketing strategy."

Zheng Junming comforted and analyzed: "The reason for the decline in the company's revenue is mainly the performance and price of the company's products, which have not been favored and recognized by consumers, resulting in hardware manufacturers choosing to cooperate with Huayao or Xinghai Technology." ”

"Our latest 5nm process Snapdragon 8550 has a running score of only 610,000, which is not as good as the 780,000 running score of the SX-2000 and the 650,000 running score of Huayao's Kirin 1220, and the performance of high-end SoCs is not as good as theirs."

"There is a gap in performance, as long as the gap is not too big, consumers can accept it, but because it is the foundry of TSMC, our chip manufacturing cost is higher, so the price is higher."

"In addition to Soc, we also charge 5% of the communication patent fee for each mobile phone, which is not very high, with the current high-end flagship machine in the early 2000s, each mobile phone only needs to add about 100 yuan."

The sharp drop in mobile phone prices is also one of the reasons for Qualcomm's revenue decline.

"However, Huayao Company does not charge 5G patent licensing fees, and the 5G basebands they sell do not charge additional patent fees, which means that all mobile phones equipped with Qualcomm chips cost about 100 to 200 yuan more per unit, and hardware manufacturers will of course abandon us."

"Mr. Amon, our business strategy must be adjusted! If this continues, our remaining market share will be snatched up by Huayao Company and Xinghai Technology, and we will completely lose the market in country Z. ”

Zheng Junming said what he had hidden in his heart for a long time.

Christian Amon shook his head, adjust, how to adjust? Qualcomm is just a specialized communication technology company, and the only means of making profits are selling Soc and collecting patent fees, which is not as good as Huayao, which is all made of software and hardware, and not as good as Xinghai Technology, which has countless core technologies.

Only by being a patent troll can Qualcomm survive.

Zheng Junming also understood this, so he made another suggestion that made President Christian Amon's eyes light up.

"Yes, Xinghai Technology has advanced technologies such as work assistants and virtual factories, but in the field of communication, limited by Huayao Company, there are few communication patents on hand, if we find Xinghai Technology to cooperate and join forces, we will definitely be able to improve the current status quo of Qualcomm!"

Christian Amon immediately asked Zheng Junming to contact Ling Jundong of Xinghai Technology, sending a signal of eagerness for cooperation.

……

Xinghai Building.

Inside the conference room.

After listening to Ling Jundong's story, Chen Jin was slightly stunned, and then smiled: "What are you talking about, is it the Qualcomm who is known as 'Emperor Z's conscience and righteous destruction of fruits'?" ”