Qualcomm chip + baseband 32 USD, plus two power management chips, for a total of only 40 USD!
Nvidia chip + Qualcomm baseband 43 USD, plus two power chips, directly increased to 51 USD!
Completely uneconomical.
Old Huang was a bit annoyed:
"Chairman Wang, you can't calculate it that way. Qualcomm chips are cheaper because their baseband is too expensive, exceeding the normal price!"
"If you buy our processor, there's no need to buy Qualcomm's baseband. You can choose Intel's baseband. I'll connect you, guaranteed to be cheaper."
"How cheap?"
Wang Yi became interested.
At that time, the gap between Intel's baseband and Qualcomm's baseband was not large, both were at a low level.
Several years later, Qualcomm's baseband made rapid progress, while Intel stood still, only then did the gap widen.
However, Intel's baseband did not support Telecom, while Qualcomm could.
Old Huang said frankly:
"Nvidia chip 16 USD, Intel baseband 14 USD! Together, that's only 30 USD, which is two USD cheaper than Qualcomm's 32 USD!"
It was clear that Old Huang genuinely wanted to sell chips, even roping in Intel's baseband.
Wang Yi waved his hand:
"I want two million Nvidia chips and two million Intel basebands. Give me your lowest price!"
Old Huang thought for a moment:
"I can't do anything about the baseband, but I can lower the chip price by another dollar for you, 15+14, a total of 29 USD, three USD cheaper than Qualcomm!"
"This is the lowest price!"
15 USD, an Nvidia dual-core chip, less than 97 yuan, truly not expensive.
But Wang Yi still said:
"Still not low enough!"
'In my previous life, your precise blade work cut me many times. This time, it's my turn to cut you!'
Wang Yi was full of mischief.
Old Huang frowned slightly:
"The chip price can't go any lower. I'll talk to Intel about the baseband, 13 USD for you! That makes it 28 USD in total!"
Intel baseband 13 USD, about 84 yuan.
Adding the two together, a set is 181 yuan, which is acceptable.
But baseband optimization and debugging is a big problem.
Wang Yi's phone was eager to launch, fearing there wouldn't be enough time for slow debugging.
If debugging goes wrong, it will be a disaster!
Moreover, Intel's baseband might not support tri-mode.
For example, the Telecom version still requires Qualcomm baseband!
Unless three million sets of Nvidia chips + Intel basebands, and two million sets of Qualcomm chips + Qualcomm basebands.
But how to divide them depends on the price offered by Qualcomm, a comparison is needed.
"Chairman Huang, I need to consider this, after all, it's a big order."
Old Huang nodded:
"Okay, I understand."
Wang Yi changed the subject:
"Actually, I'm very interested in your quad-core chips!"
He approached Nvidia, not caring whether the dual-core chip worked out or not; the main purpose was to pressure Qualcomm, forcing them to lower prices!
To make Qualcomm realize that if their dual-core sells expensively, then he will order Nvidia + Intel!
As for Nvidia, what Wang Yi truly valued was the world's first quad-core chip, Tegra 3, launching next year!
After all, other brands were still using dual-core processors.
If Wang Yi launched the world's first quad-core, it would create enough hype and sell explosively!
"Quad-core chips..."
Old Huang was somewhat conflicted:
"To be honest, our Tegra 3 is the world's first quad-core chip, and we have no trouble selling it!"
The world's first quad-core chip would have plenty of customers.
How to clear the inventory of unsalable dual-core chips was Old Huang's real problem.
"That's not a problem, my order quantity will be higher than theirs!"
Wang Yi smiled slightly.
Upon hearing this, Old Huang became interested.
Quad-core chips were not difficult to sell, so if Wang Yi ordered only a few, he wouldn't sell them, definitely prioritizing major customers like HTC!
But if the order quantity was large, then Wang Yi would also be a major customer, and arrangements had to be made!
"How high?"
Old Huang asked with a smile.
Wang Yi held up three fingers.
"Three million units?"
Old Huang was excited, this was a truly big customer!
HTC wouldn't order so many at once!
"If you give me the first launch, prioritized supply, and a suitable price, I can take five million units!"
Wang Yi smiled slightly, full of confidence:
"But if the supply is slow, and Qualcomm's quad-cores are already out, then I won't need too many."
Wang Yi did not hide anything.
In business negotiations, honesty is the best policy.
There's nothing to hide.
After all, even if you don't say it, everyone understands.
It's better to discuss openly and frankly to find a mutually satisfactory point!
"Alright, for your boldness, I'll give you five million units for the first launch!"
Old Huang decisively made the call:
"As for supply, we'll start supplying in February next year, synchronized with HTC!"
"Good!"
Wang Yi beamed with joy.
Supply and launch in February, stockpiling in March.
If fast, the quad-core Pro version could launch in late March; if slow, early April!
No, it must launch in late March, directly competing with HTC for the world's first quad-core flagship!
Wang Yi had his own factory and could operate at full capacity, producing quickly!
Just the "world's first quad-core flagship" gimmick alone would be enough to sell explosively!
In 2012, this gimmick was incredibly powerful!
The HTC One X had many shortcomings, but because of the "world's first quad-core flagship" gimmick, it sold out completely.
The Xingyi Phone 1 Pro was even better, fully capable of selling more.
From March to August, five months, selling 5 million units would not be a problem.
And after August, he could snatch the first launch of Qualcomm's quad-core processor APQ8064, which was even more powerful than Nvidia's quad-core!
Similarly, placing a one-time order for five million units, there would be no fear of not getting the first launch of Xiaomi 2!
This way, he would continuously seize the initiative and maintain a significant lead!
"As for the price, Chairman Huang won't be asking for an exorbitant price, will you?"
Wang Yi laughed.
"Of course not."
Old Huang patted his chest:
"A Tegra 3 quad-core chip, only 30 USD! We guarantee you 1 million units per month!"
Wang Yi silently grumbled:
'Damn, Old Huang, you're really a profiteer!'
The dual-core processor Tegra 2, you sold for 15 USD, and the quad-core Tegra 3 is directly 30 USD?
It's a direct double!
Prices don't rise like that!
Holy cow!
"Old Huang, think carefully before you speak!"
Wang Yi frowned slightly.
In my previous life, you used precise blade work and cut me many times.
Now I'm a big customer, and you're still doing this? Are you giving me face?
At Wang Yi's sudden change of demeanor, Old Huang gave an awkward smile:
"Since you're ordering a lot, I'll give you 28 USD!"
"Cut another dollar!"
Wang Yi said huffily.
"27 USD!"
"Old Huang, you're not being sincere!"
"..."
For a moment, Old Huang was a bit bewildered.
'Why is this guy so angry? I don't have any feud with you!'
Wang Yi sighed,
'We have a big feud, it started in our previous life. You better cut me less!'
"Alright, I'll give you the same lowest price as HTC, absolutely sincere, 25 USD!"
25 USD, 161.47 yuan.
Adding the external Intel baseband, it would be 38 USD, 245 yuan!
Wang Yi understood this was the lowest price.
Processors are always most expensive when they first launch.
For example, Xiaomi One's Qualcomm 8260, at launch, cost around 23 USD, and only dropped to 20 USD a few months later.
Old Huang's Tegra 3 selling for 25 USD doesn't seem cheap, it's even more expensive than the Qualcomm 8260's launch price.
But after all, it's the world's first quad-core processor, so a premium price is normal.
To get the first launch, you have to burn money.
A few months later, when production capacity increases and costs decrease, the price will drop to 23 USD, 20 USD...
And at 25 USD, the same price as HTC, it's probably impossible to cut it further.
Giants like HTC also place considerable orders.
If Old Huang gave Wang Yi a lower price, he wouldn't be able to explain it to HTC.
Since the price couldn't be cut further, it was better to retreat to advance and secure other benefits.
Wang Yi nodded:
"Chairman Huang, you said 25 USD, so 25 USD it is. However, I want 2 million units in February, and 3 million units in early March!"
"This..."
Old Huang was stunned, full of disbelief, and after a long deliberation, he said:
"Chairman Wang, with so much inventory, can you sell it all in two months?"
He was practically saying that this was selling phones, not cabbages.
"I should be able to sell it, don't worry, full payment in advance before shipment!"
Samsung S3 sold 20 million units in three months.
Wang Yi selling five million units in three months should not be under much pressure.
After all, by that time, the reputation of Xingyi Phone Generation 1 should have been established.
Plus the gimmick of the world's first quad-core flagship, there truly wouldn't be much pressure.
Phones have always had their hot-selling golden period in the first three months after launch, selling the best.
The longer it goes, the cooler it gets.
After half a year, prices have to be cut for promotions, or the model needs to be updated!
Even Xiaomi at 1999 yuan later dropped to 1299 yuan.
Wang Yi's sales strategy was to ship aggressively during the golden first three months!
After three months, as the hype cooled, sales would become more steady.
This could achieve maximum sales and create maximum profit!
"Alright, I promise you, it'll be as you said, two million units in the first month! Three million units in the second month."
Old Huang agreed readily.
The world's first quad-core processor was never short of buyers.
Even if Wang Yi didn't want them later, plenty of others would!
Nvidia could also earn a wave of liquidated damages.
Old Huang wasn't worried at all.
If Wang Yi took all of them and sold five million units in three months, that would be even better!
Nvidia could significantly increase its production lines and capacity!
Chips, too, are subject to economies of scale; the more you produce, the more you sell, the lower the cost.
"Good, a pleasure working with you!"
Wang Yi smiled:
"If they sell quickly in May, I'll place additional orders, and you'll have to give me a discount then!"
"Continued additional orders? Alright! Absolutely no problem!"
Old Huang readily agreed.
If Wang Yi sold five million phones in three months, he would be a super big customer!
He would have to be revered like an ancestor!
But the possibility wasn't high, truly not high.
'Young people are just full of spirit!'
'But what does it have to do with me? I sell the chips, and I make my money. If they end up in Wang Yi's hands, it's none of my business.'
'But still, I hope he sells well!'
Old Huang smiled:
"Chairman Wang, I will provide technical support. When you have your product launch, I will fly to the Imperial Capital and personally stand on stage for you!"
"Good, a pleasure working with you!"
"A pleasure working with you!"
Subsequently, a contract was drafted, and after lawyers confirmed there were no issues, both parties signed.
Officially finalizing the five million unit big order, worth 125 million USD, over 800 million yuan.
"Chairman Wang, it's a pleasure working with you on the quad-core processor, and I hope we can cooperate again on the dual-core processor!"
Old Huang said, extending his hand with a smile.
He felt that Wang Yi in front of him was simply a god of wealth.
"Same here!"
Wang Yi smiled.
Signing for the first launch of the quad-core was enough.
As for the dual-core, let's see what Qualcomm has to say first.
In the afternoon, Wang Yi didn't rush to Qualcomm but instead strolled around the Imperial Capital and even gave alms to several homeless people.
But he didn't encounter any acquaintances.
Presumably, those two old runaways were holed up in some shanty town.
He wondered if they managed to get food today!
Additionally, yesterday the iPhone 4S had been released, exactly as he remembered.
It was considered good at the time, but nothing more.
The iOS system was quite good, much better than Android 4.0.
Android only caught up with Apple's system many years later.
Android from a few years ago was incomparably inferior to the iOS system.
Wang Yi here was very calm, but Qualcomm couldn't sit still.
Qualcomm CEO Jacob frowned:
"That damned Old Huang actually snatched my customer!"
"Wang Yi is so calm, could he really have bought Nvidia chips?"
"Damn it! He should have talked to us Qualcomm first before ordering!"
"That's a five million unit big order!"
For a moment, Jacob was filled with regret.
He shouldn't have been so arrogant; he should have gone to pick him up at the airport, otherwise, where would Nvidia fit in?
"Quick, go and check for me! See how much cooperation Wang Yi and Nvidia have actually achieved!"
"Yes!"
The subordinate quickly left.
It wasn't until he received the results that Jacob breathed a sigh of relief:
"So it was just a quad-core chip order, the dual-core hasn't been ordered yet... Then I must secure it with all my might!"
The next day, Wang Yi arrived at Qualcomm headquarters, and Jacob warmly welcomed him.
After some pleasantries, Jacob got straight to the point:
"Chairman Wang, I heard you signed a big order for five million chips with Nvidia yesterday?"
"That's right, but it's for next year's cooperation. We need their quad-core processor."
Wang Yi didn't hide anything.
There are no secrets in business; what happened yesterday, Qualcomm would know yesterday.
"Quad-core processors..."
Jacob fell silent, wanting to curse inwardly.
'Nvidia is just here to cause trouble!'
Before, when everyone was using single-core, he came out with dual-core.
Okay, Qualcomm also had dual-core, and now this guy started with quad-core again!
Forcing Qualcomm to follow suit!
But the problem was, they couldn't catch up!
Even with constant effort, it would only launch in August next year, a full six months later than Nvidia!
No wonder Wang Yi sought cooperation with Nvidia; if it were him, he'd do the same.
Half a year later, the chance would be gone.
'Forget it, no need to worry about quad-core matters, let's talk about dual-core processors!'
Jacob sighed:
"Chairman Wang, your dual-core processors haven't been decided yet, have they? You can consider our Qualcomm!"
He calculated clearly that Wang Yi had already ordered screens and lenses, which would arrive in early November.
It was impossible to wait until April next year to release the phone!
He would most likely release dual-core phones first, and then quad-core phones in April next year!
'Qualcomm can't hold back!'
Wang Yi chuckled inwardly.
With Nvidia's quad-core pressing, Jacob's temper had improved a lot.
There was no helping it; when Qualcomm monopolized the market and was number one globally, they were outrageously arrogant.
But now, with many competitors like TI, Nvidia, and Intel, Qualcomm couldn't monopolize.
And being half a year behind Nvidia, they couldn't really be arrogant, so they had to bow their heads!
It seems Nvidia must remain in the mobile chip market to suppress Qualcomm!
Wang Yi smiled slightly:
"Qualcomm chips have always been excellent, I intend to purchase a large quantity, if the price is right."
Jacob beamed with joy:
"Absolutely right! Chairman Wang is generous, and Qualcomm will also give the most suitable price!"
"Our external selling price for the 8660 chip + baseband set is 32 USD. Since Chairman Wang is ordering a lot, we'll give it to you for 28 USD! For the 8260, it's only 27 USD."
Xiaomi's 8260 was a single-mode version, not supporting Telecom, so it was a bit cheaper.
However, Wang Yi preferred to spend one more dollar for the dual-mode 8660, which supported China Unicom, China Telecom 2G, 3G, and China Mobile 2G.
As for not supporting China Mobile 3G, it didn't matter, since China Mobile would soon abandon 3G itself...
Wang Yi sighed inwardly:
'28 USD! This cutting skill is really precise!'
The lowest price for Nvidia chips and Intel basebands was 28 USD.
As soon as Qualcomm came out, it offered dual-mode for 28 USD directly!
Single-mode for 27 USD!
This cutting skill was really precise!
Even more precise than Old Huang!
It could only be said that Qualcomm was already well aware of Nvidia and Intel's lowest prices, and blocked them off from the start!
At the same 28 USD, Wang Yi naturally chose Qualcomm.
No other reason, with Qualcomm chips + Qualcomm basebands, Qualcomm would provide technical support, debugging everything directly, saving effort, and supporting Telecom!
But with Nvidia chips + Intel basebands, Wang Yi would also have to sign with Intel, not to mention needing separate debugging, which would be more laborious and troublesome.
At that moment, the Xingyi Phone Generation 1 was in a hurry to launch, and there simply wasn't that much time.
Qualcomm was still more suitable.
"What about with the dual power management chips PM8058 and PM8901?"
Wang Yi asked.
A phone doesn't just have processor chips and baseband chips, but also two power management chips.
However, these two chips were cheaper, four or five dollars each.
Xiaomi Generation 1 also directly bought four Qualcomm chips, totaling 45 USD in September, and dropped to 40 USD in December.
"8660, 36 USD, for you! 8260, 35 USD for you."
Four dual-mode versions, 36 USD, which was 4-9 USD cheaper than Xiaomi.
But it wasn't enough!
These chips would continue to drop in price in the future.
"At this price, I can order two million sets of 8660!"
Wang Yi said calmly.
Jacob smiled:
"Chairman Wang certainly has courage, 35 USD, five million sets of 8660!"
"34 USD for 8660, five million sets!"
Wang Yi cut another dollar.
"This price truly cannot be done."
Jacob was very troubled; he had already made significant concessions.
Wang Yi waved his hand:
"Then let's meet halfway, at the price of 34 USD, give me 2.5 million sets of 8260 and 2.5 million sets of 8660!"
Jacob thought for a moment and nodded:
"You are a wise businessman, deal!"
The 8260 did not support Telecom, so 34 USD for Wang Yi was not a problem.
As for 2.5 million sets of 8660 also at 34 USD, losing 2.5 million USD was considered a concession.
Who told Wang Yi to order so much, and with Nvidia lurking!
Four chips, 34 USD!
This price was quite good.
Not to mention now, even in March next year, Xiaomi might not get this price unless they also ordered in large quantities!
Wang Yi stood up:
"A pleasure working with you!"
"A pleasure working with you!" Jacob breathed a sigh of relief.
The big order for five million quad-core chips was snatched by Nvidia.
But this big order for five million dual-core chips, Qualcomm secured!
No, it was five million application chips + five million baseband chips, a whopping ten million units big order!
Their Qualcomm earned more.
As for patent fees, they were all added to the chip and baseband prices.
The 34 USD already included everything.
Of course, Jacob was very smart, he didn't mention the Qualcomm tax throughout.
There was no choice; at that time, Chinese smartphone companies were just starting, and no one was paying taxes at all.
He didn't dare to collect.
If he raised the Qualcomm tax, an extra 5% per phone, 23 USD, would be more expensive than the application chip.
Needless to say, Wang Yi would definitely turn around and leave, immediately embracing Nvidia and Intel.
A big order of tens of millions of chips would also fly away!
At that time, Qualcomm couldn't yet rule the world with one hand!
Moreover, Xingyi Phone was a new brand, just starting to make phones.
Qualcomm would not collect the Qualcomm tax; instead, it would support them with low prices.
This way, as Xingyi Phone grew larger, it could buy more Qualcomm chips and Qualcomm basebands, and Qualcomm could earn more...
In fact, foreign giants adopted such a strategy for domestic companies.
They mostly let you develop first; once you grew big, they would start collecting patent royalties.
Similarly, Qualcomm also allowed domestic phone brands to grow strong, only starting to harvest from the four major domestic giants in 2014.
Subsequently, both parties signed the contract.
Starting from November, 1 million sets of application processor chips + baseband chips were to be delivered by the 3rd of each month.
Half of them 8660 and half 8260!
For each batch of goods, Wang Yi needed to pay in full half a month in advance, and then Qualcomm would arrange shipment!
Ten million chips, a total price of 170 million USD, 1.098 billion yuan!
This cooperation was a win-win.
For Qualcomm, as long as they didn't raise the Qualcomm tax, Wang Yi was still willing to be friends with Jacob.
When the Qualcomm tax would be collected three years later, Wang Yi's self-developed chip might already be successful, and could very well replace it!
Three years to forge a sword should be enough!
"Chairman Wang, our Qualcomm will also have a quad-core flagship chip in the second half of next year. We hope to continue our cooperation!"
The big order for five million quad-core chips being snatched away still made Jacob feel quite aggrieved.
After all, this five million unit big order should have belonged to their Qualcomm!
No, it was ten million units!
And five million baseband chips!
Wang Yi smiled, and said meaningfully:
"No problem, I can sign another five million Qualcomm quad-core flagship chips, but I want ten million sets of basebands. Of those, five million sets of basebands are needed in February or March next year. I hope they are all at a reasonable price!"
Nvidia's Tegra 3 quad-core chip was released early, but it didn't come with a matching baseband chip.
Wang Yi still had to buy it separately, either Qualcomm baseband, or Intel, Broadcom, or even Spreadtrum, etc...
But in terms of network standards, Qualcomm baseband was still the most comprehensive.
Especially for Telecom users, they couldn't do without Qualcomm!
It's just that Qualcomm basebands sold separately were ridiculously expensive, even more expensive than the chip, which was too uneconomical.
But if baseband and chip were sold together, it would be cheaper, basically buy one get one free.
Now that Qualcomm asked Wang Yi to order quad-core chips again, Wang Yi readily agreed, directly asking for five million units, giving Jacob ample face.
Asking for an additional five million basebands, Jacob couldn't refuse either and had to offer a fair price.
Otherwise, this terrifying big order might be lost.
At that time, Qualcomm couldn't yet rule the world with one hand.
"Qualcomm's basebands are never sold cheaply, that is our principle!"
Jacob sighed:
"But Chairman Wang is a friend of Qualcomm, so we can sell you more basebands for backup!"
Principles are principles, and patrons are patrons!
Patrons are above principles!
"Then the baseband price..."
Wang Yi asked with a smile.
If it was 27 USD, then forget it, it would be worse than Intel's 13 USD, just make do with it.
"Don't worry, you are a friend of Qualcomm, so we will give it to you at half price, 13 USD per unit!"
Jacob thought clearly: Nvidia snatched the big order for 5 million quad-core chips, so he would snatch back this big order for 5 million basebands.
Anyway, if Qualcomm didn't sell, Wang Yi could go to Intel, Broadcom...
It would be foolish not to make money!
Moreover, this Oriental tycoon was so generous!
"As for the price of Qualcomm's quad-core processor, it will be determined after the APQ8064 is released, but it will definitely be cheaper than Nvidia's!"
After all, Nvidia had already snatched the first launch of the quad-core, and Qualcomm was half a year behind, so they couldn't command a high price!
(End of Chapter)