Rebirth 2010: I taught Mr. Lei how to make a mobile phone

Chapter 964 Xiaomi Wants to Skip Generations to Compete with Others?
Behind Summer Technology, besides Lee Boo-jin's own investment and local government funds, there is also a joint investment from Xiaomi and Beyond. The company is now at a crucial juncture, building on its past achievements and paving the way for future growth.

Lee Boo-jin herself is quite capable in business. With the support of both the political and business circles in South Korea, the tireless coordination and investment of Chen Mo and Lei Jun, and the invisible assistance from China, she can be described as "when the time is right, everything works together for her".

Her brother was convicted of corruption and accused of bribery. He was sentenced to three years in prison last year and appealed the verdict.

In fact, her brother is nothing compared to her father, not only in business, but also in his methods of climbing the social ladder.

When the former chairman took power, he forced his eldest brother into a mental hospital and expelled his second brother from the country, almost staging a Korean version of the "Xuanwu Gate Incident".

In South Korea, there is an unwritten "three-five rule": no matter how serious the crime is in the first trial, the second trial will always result in a three-year suspended sentence with five years probation, without even going to jail, and the matter will be settled by donating money.

To illustrate, everyone knows that Hyundai, LG, SK, and Samsung are the four major conglomerates in South Korea.

Rakuten is not on this list, but it still made it into the top ten. During its trial, Rakuten's founder shouted in court: "Who dares to convict me?"

This can be seen.

But last month, the most important 5 in this three-five rule failed.

With the combined efforts of Lee Boo-jin and her superiors, Lee Jae-yong was again found to have used banned drugs.

Despite the fact that the sentence was not increased after much negotiation, the probation was revoked, and he must serve a full three years in prison.

Samsung was suddenly leaderless. Lee Boo-jin attempted to seize power using the influence of Summer Technology, leading to a fierce internal power struggle.

Six months later, although Samsung has not changed hands, the market has changed hands—it has been devoured by Xiaomi and Xiaomi.

Xiaomi has taken the top spot in the global mobile phone market; in the South Korean domestic market, the S3 phone, which was just released this summer, has surpassed Samsung in sales, and is also doing very well in Southeast Asia and South Africa, forming a tacit cooperation with Xiaomi.

There's even a saying: "Summer is the Chinese equivalent of Xiaomi"—while in South Korea, it's the other way around: "Xiaomi is the Korean equivalent of Summer."

Chen Mo's visit this time was to provide this "neighboring comrade-in-arms" with a new round of firepower:
Invest money, expand scale, provide technology, build relationships, deepen partnerships, determine the next steps, and incidentally invest some "energy".

According to the previous agreement, Chen Mo would receive the majority of the investment returns, but the final decision-making and control would be reversed, with Lee Boo-jin in charge.

Therefore, the performance of Summer Technology's S3 phone after its launch was also very profitable. The software from the Beyond Group also entered the mainstream user group in South Korea with the Summer phone, forming a strong competitive advantage.

Even lovers need to keep clear accounts. After the final calculation, the returns will be extremely considerable—the current return on investment is already over 50%, with a net profit of over 10 billion.

And this is just the result of pursuing a cost-effective strategy. As the mobile phone market moves into the high-end segment, it will further erode Samsung's profits, and the profits will be even more astonishing.

However, the strategic significance of this matter far outweighs its revenue significance.

By allying with Xia Tian, ​​the other side and Xiaomi can smoothly transition into each other's territory, using both hard and soft tactics.

The latter has seized the opportunity to cripple Samsung, a former powerhouse, and become the mobile phone giant in one fell swoop.

Despite Xiaomi's current status as the world's number one in shipments, Chen Mo is well aware that the situation remains severe.

In terms of profit margins, Apple remains the undisputed "father" – with a gross margin of nearly 50% and a net margin as high as 25%.

This means that an iPhone priced at $1000 has a manufacturing cost of about $500, and after deducting operating expenses, the remaining profit can reach $250.

In contrast, Xiaomi's gross profit margin often hovers around 20%, and its net profit margin is often only in the single digits.

Apple's profit margin is several times higher. This is one of the reasons why, even though Xiaomi dominates in sales, its market capitalization is still far behind Apple's. Of course, this is only one aspect of a complex set of factors.

Apple's pricing strategy can be described as "selling silver at the price of gold," and it is also known as a "master of incremental upgrades" when it comes to hardware upgrades, with precise adjustments, for fear of squeezing out too much at once and having nothing left to squeeze out later.

However, last month, facing immense competitive pressure from Xiaomi, Cook made a rare decision that seemed to "go against Jobs's principles," squeezing the toothpaste tube until it burst.

By launching iPhones of different sizes and price points (XS, XS Max, XR), the market is more precisely covered, new chips are used, battery life is improved, and even the fast charging limitation is addressed.

Lei Jun, of course, was not idle either.

After the Apple event, he planned carefully and then launched a series of products, including the Mix 2, tablets, laptops, smartwatches and smart bands, and smart home devices.

The highly anticipated Mix2 retains the classic design of its predecessor while undergoing a comprehensive hardware upgrade, especially with the self-developed Surge system and the Xuanjie chip.

Although there is still a gap between Lei Jun and Apple in terms of system and chip maturity due to the shorter development time, Lei Jun's greatest strength lies in creating a differentiated and challenging situation.

Don't you have advantages in systems and chips? Then I will deeply integrate and optimize the Beyond software ecosystem with the Surge system, using the collaborative experience of the "whole family" to make up for the underlying gap, so that ordinary users can hardly perceive the difference.

At the same time, leveraging strengths and avoiding weaknesses, in areas where breakthroughs have been achieved, such as motherboard stacking, battery capacity, and battery life, Lei Jun has adopted the "Lei-style comparison method" he learned from Chen Mo, and this time with innovation: instead of comparing parameters on PPT, they are competing on the same stage.

At the launch event, a sped-up video visually demonstrated the battery life comparison between the Mix2 and the iPhone XR.

As a result, the iPhone XR ran out of battery first, while the Mix 2 still had 58% battery remaining;

Then they switched to an iPhone XS to continue the comparison, and both phones eventually "died" almost simultaneously, achieving a perfect effect.

The slogan on the PPT, "One Xiaomi is better than two Apples," was very impactful. Although some netizens later discovered a small line of text in the lower right corner that read "Battery life only," this detail did not cause much of a stir at the time.

When Lei Jun announced that the Mix 2 had a domestic component coverage rate of up to 80%, making it the flagship phone with the highest domestic component rate at the time, and after several years of hard work, the "strengthening and combining with Apple" strategy proposed by Chen Mo to him was finally showing initial results, it caused a stir among the audience.

Ultimately, Xiaomi maintains its tradition of "more for the same price," with the starting price remaining at 4499 yuan and the top-of-the-line Mix2 Ultra at only 5999 yuan.

Compared to the iPhone XR starting at 6499 yuan, the iPhone XS starting at 8699 yuan, and the top-of-the-line iPhone XS Max at 12799 yuan, Xiaomi offers product capabilities that are close to or even surpass those of the iPhone XR at almost half the price.

After watching the press conference, even someone as brilliant as Chen Mo had a brief moment of disbelief, thinking that if it weren't for the brand premium or the smooth mobile operating system, he really couldn't think of a reason to choose Apple.

If he's like this, what about the average consumer and the vast number of Mi Fans?

"Perhaps that's Lei Jun's charm," he thought at the time.

As long as Xiaomi continues to invest in chips and operating systems and avoids making directional mistakes, its high-end strategy has a real chance of success.

Just then, Chen Mo's other personal cell phone rang.

Upon seeing the caller ID, I thought of Lei Jun, and then Lei Jun appeared!
The phone connected, and a familiar voice came through.
"The design plan and concept for next year's Xiaomi X11 have been finalized; I'll send them to you."

Wasn't it 8? Why did it jump to 11?

Chen Mo was stunned after hearing this.
Are mobile phones also going to skip generations?

(End of this chapter)