chsdbacks Chapter 48. Plans for the domestic market.
Chapter 48. Plans for the domestic market.
"Trial production is expected to begin at the end of the month, with an initial batch of 5 units," Chen Hai said. "All smartphones are currently planned to be produced here."
Assembly costs can be controlled to around $120.
Shen Fei did a quick calculation and the cost was 120. This only covers the cost of hardware and assembly; the total cost is definitely not that low.
Including taxes, transportation, and sales costs, the cost is only around 150. Selling it for 249 or 299, with a gross profit margin of 40-50%, is not bad.
However, this price is considered a high-end model in Africa, and it has a huge advantage compared to Nokia's high-end feature phones, as well as Samsung and Apple's starting prices of four or five hundred US dollars.
It's accessible to the middle and upper classes, but it seems a bit cheap compared to Lei Jun's 1999.
"How's the application ecosystem issue progressing? Give me a detailed report from Mr. Huang's side."
Shen Fei raised this crucial question: to win over high-end customers in Africa with smartphones, the application ecosystem is also an issue.
"Boss, this is the second piece of good news I have to share."
Chen Hai's face was still beaming with smiles. He had been communicating with Huang Tianya quite a bit these past few days and had learned a lot about the latest developments.
"Among the African internet companies that Mr. Huang has invested in, there are currently 16 companies that have developed corresponding software."
Although they are both startups, their user growth is very rapid.
As Chen Hai spoke, his hands continued moving, and he pulled out a document from the side.
The text lists various software applications under development for Tos, such as Nigeria's social networking app "AfroChat," Kenya's online education platform "EduAfrika," South Africa's music streaming service, and Mauritius's mobile payment software.
With these initial software developments, this prototype is no longer a toy, but a smartphone comparable to Apple products.
What? You're saying MediaTek and Transsion aren't good enough?
However, thanks to the enhancements from the cutting-edge technology center, the chip's performance has been significantly improved, making this phone truly comparable to the original Apple product in terms of user experience.
After all, the fruit we know today is not the same as the fruit of later generations, so the fruit company simply claimed the title of the world's first smartphone.
Shen Fei held the phone and slowly pondered.
This phone is indeed a bit ahead of them in terms of progress. From deciding to make a smartphone to the appearance of the prototype today, it has only been a little over six months.
"Professor Chen," Shen Fei suddenly stopped. "This phone is officially named Transsion S1. It will be launched in Nigeria next month."
"Then the pricing."
"Let's set it at $299 for now," Shen Fei said after a moment's consideration. "We want African consumers to know that smartphones are not a luxury, but a tool that everyone can afford."
Of course, this is just my initial idea. We'll discuss it at the next meeting, and you should also prepare a more detailed cost analysis report so we can discuss it further then.
Chen Hai nodded heavily.
As Shen Fei left the lab, he glanced back at the engineers who were still busy at work.
However, since he took over, the laboratory has undergone tremendous changes. Not only has the number of people doubled, but the team has also gradually become younger, with the average age dropping significantly from 35 to 30.
Although young, his skills are truly outstanding.
Shen Fei's phone vibrated slightly; it was a message from Zhang Mingzhu.
"I've made up my mind. I'm not staying at school this summer. I'm going to Guangzhou to work for you."
Shen Fei glanced at it and replied, "No problem, see you in Guangzhou. I'll give you the latest mobile phone in the world then."
After sending the message, Shen Fei fell into deep thought.
If he remembered correctly, it took Chinese mobile phone manufacturers more than 10 years to go from being chasers to running alongside them in the previous life.
Lei Jun (CEO of Xiaomi) has indeed made a significant contribution to the widespread adoption of smartphones in China, and the 1999 price point is certainly a good direction. I could suggest this to Huawei (the company behind Huawei) to release the Honor series ahead of schedule.
As for technological competition, with the addition of cutting-edge technology enhancement centers, he is confident that this process can be shortened to 5 years or even 3 years.
The Transsion S1 is just the beginning; there will be a complete smartphone equipped with a self-developed chip later on.
For now, let's focus on securing a firm grip on the smartphone market in Africa.
…………
July 1st, Transsion headquarters strategic conference room.
This meeting was indeed of a very high level, and Wang Tianya, the head of Huaxin Investment, was sitting next to Shen Fei.
In addition, Chen Hai, Li Qing, and others also participated.
Even Adebayor, the person in charge of Africa, was invited to participate.
Two days ago, when Adebayo saw the news, he was extremely excited. After all, although he had been promised he could attend the headquarters meeting, the journey was long…
Actually, he didn't have any particular expectations.
But when he actually received the news, he was so excited that he didn't sleep for two days. He was determined to come up with his own solution for this meeting and not let his boss down.
The projection screen already displayed a rendering of the Transsion S1 and its detailed specifications.
"Everyone, the S1 will go into mass production next month, and we need to decide on the initial market today." Shen Fei clapped his hands, drawing everyone's attention to the big screen. "And then there's the final pricing."
Let's discuss this issue today.
Li Qing, the person in charge of publicity and marketing, was the first to speak: "I suggest it should be at least 299."
This price is significantly cheaper than competing products like HTC, Apple, and Samsung, but they can further reduce the price through carrier contracts.
Therefore, with a price of 299, we have an absolute price advantage while maintaining a high gross profit margin of over 50%. This is also how smartphones differentiate themselves from ordinary feature phones.
The CFO didn't say anything, picked up a pen, and carefully calculated.
The hardware cost of the BOM is 120 yuan. With the addition of transportation, tariffs, and marketing, the total cost should reach 150 US dollars.
Li Qing's price is indeed reasonable.
"I support Mr. Li; the price of 299 is more reasonable."
"But our goal isn't to compete with Sansheng for high-end users," Chen Hai proactively voiced his objection, and Liu Zhihong nodded silently in agreement.
"Our core objective is to cultivate users, help us further improve the ecosystem of the Tos system, and discover problems with our self-developed chips."
This requires volume. If the price is too high, leading to poor sales, all our plans will be affected.
After Chen Hai finished speaking, Liu Zhihong picked up the engineering prototype and examined it carefully for a while. The feel of it was indeed good.
While it may not be comparable to Apple, it can certainly hold its own against newcomers like HTC.
"From a technical point of view, the performance of the S1 is indeed worth 299, or even more, 349 is also acceptable."
From a market perspective... I suggest we could release different versions.
The basic version can be priced as low as 249 yuan, then the rear camera will be reduced to 100 megapixel, and the storage will be slightly reduced. The price will then be increased based on the available memory.
Then the high-end version...