A “bargain price” mobile phone can also make money at 599 yuan

Recently, an article titled "Ren Zhengfei's Internal Speech at Huawei" has been widely circulated. In the article, Huawei President Ren Zhengfei asked Huawei executives, "Making 30 yuan from a mobile phone, what kind of high-tech is that?" After that, Lei Jun, chairman of Xiaomi Technology, posted on Weibo that the 4G version of Redmi will be launched on August 16, priced at 699 yuan. And Huawei's "4G Honor 3C Changwan Edition" will also be sold for only 599 yuan. 699 yuan, 599 yuan, how can 4G mobile phones be sold at such a low price? !

hardware

Gross profit margin 25%-30%

All mobile phones have a process of increasing production during the production process. For low-priced mobile phones of a few hundred yuan, when the scale is small at the beginning, a single machine may not make money or even lose money. But the current market situation is that as long as the upstream supply chain is stable, as long as it is a branded low-priced smartphone, it can basically sell well and break through the critical point in a relatively short period of time to achieve a stable profit state. If only hardware and processing costs are counted, the low-price gross profit margin is between 25%-30%, and the value increases as the production scale increases.

channel

E-commerce is the most cost-effective

In the past, operators would subsidize each mobile phone in order to attract users, and directly give it to mobile phone dealers. However, due to factors such as the tax reform, operator subsidies have been reduced, and mobile phone dealers must adjust their channel strategies. Therefore, in the communication with Nandu Jun, Yu Chengdong also frankly stated that in the future, 80% of Huawei's mobile phone channels will be handed over to e-commerce and social channels, that is, operator channels will only account for 20%.

When it comes to saving money, e-commerce has an absolute advantage. The operation and logistics costs of online shopping platforms are nothing compared to the rising costs of physical stores. Therefore, low-priced smartphones under the banner of Internet phones can only be guaranteed to be cost-effective through e-commerce channels. Of course, you can also see these products in many physical stores, but none of them sell them without adding a markup. Basically, 100 yuan is the starting price.

patent

You can save dozens of dollars by not using Qualcomm

In the eight-core mobile phone war triggered by Redmi Note in March this year, careful friends found that whether it is Redmi Note, Huawei Honor 3X Fun Edition, Lenovo Golden Fighter S8, Coolpad Dasheng F1, these low-priced eight-core smart phones are all launched first in China Mobile 3G version. This is because China Mobile 3G is a TD-SCDMA standard with independent intellectual property rights in my country, which is partially exempted from Qualcomm patent fees, saving dozens of yuan. When the production scale is gradually increased and some fixed costs are shared, the China Unicom version and the China Telecom version will be launched. So far, the China Mobile version of Redmi is only sold for 699 yuan, and the China Unicom version is 799 yuan, which is also the reason.

software

Open source system does not require payment

As we all know, Google Android is an open source system and does not require payment. However, each mobile phone manufacturer will make in-depth modifications based on Android to form operating systems with unique brand characteristics such as Xiaomi MIUI and HTCsence. In the products of the same brand, the operating system is basically unified. The only difference is that the details are optimized according to the hardware performance of different models to ensure user experience. In theory, the larger the sales scale, the more the cost of software development and operation can be diluted. Therefore, the low-priced smartphones in the mobile phone manufacturer's product line actually dilute the software costs of mid- and high-priced products through their own scale, achieving the effect of saving money.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.