#33 - Section: Market Changes

Lei Jun frowned upon hearing the suggestions from his own company. Xiaomi had always prioritized cost-effectiveness, demanding both reasonable prices and strong phone performance. However, MediaTek chips were simply disastrous for flagship devices.

The use of MediaTek chips in Redmi phones was a last resort. Redmi primarily targeted the sub-1000 yuan and even the 100 yuan markets. Using Qualcomm processors would increase costs. In this situation, Redmi phones could only opt for MediaTek chips, which were inferior to Qualcomm processors.

Lei Jun said with a worried expression, "To be honest, I'm still concerned about MediaTek processors. Although their performance is decent, it doesn't meet the standards for flagship devices. Moreover, MediaTek chips are less efficient and generate more heat compared to Qualcomm's."

Lei Jun, sitting in his seat, pointed out the weaknesses of MediaTek processors. Currently, Qualcomm chips were still the most suitable processor configuration for his company's phones. The company executives fell into deep thought upon hearing Lei Jun's words.

Qualcomm processor chips were undoubtedly a good choice in terms of performance and other aspects. However, Qualcomm chips were significantly more expensive than ordinary chips. If they were used in the Xiaomi 3 phone, the company's profits would be further squeezed.

Currently, the company's phones were consistently priced at 1999 yuan. If Qualcomm processors were chosen, the already meager profit of just over a hundred yuan would instantly be reduced to the point where it wouldn't even cover costs.

"Why don't we slightly increase the phone price by one hundred yuan?" Lin Wen suggested.

As the mobile phone market department manager, he had his own ideas. In his opinion, the Xiaomi phone was already in its third generation and had never increased in price, which was, frankly, unreasonable.

Lei Jun was now deep in thought. Many competitor phones had raised prices, but Xiaomi's digital series phones still adhered to their original intention, selling for only 1999 yuan. In his view, the problem facing Xiaomi was particularly significant and not just about profit.

"Temporarily halt phone sales. Also, go talk to Qualcomm about pricing. As for the price, keep it at 1999 yuan for now. After all, we must not forget our original intention. Without the support of these consumers, Xiaomi would never have reached where it is today."

Lei Jun seemed to have made a major decision. Looking at the executives in front of him, he believed that his phone company must be the most honest company.

The company executives, after listening to Lei Jun's words, felt somewhat unwilling, but they also understood that what Lei Jun said was indeed what Xiaomi Company should pursue.

That evening, Xiaomi Company stopped selling Xiaomi phones and sent people to Qualcomm to seek cooperation, striving to use Qualcomm's processor chips before the release of the Xiaomi 3 Unicom version.

The mobile phone market in these months can be described as turbulent.

Shenzhen, after internal adjustments to Huawei's mobile phone business department, it finally got back on track.

Huawei possesses absolute advantages in communication technology. At the beginning of the 21st century, Huawei relied on its strong communication technology in the feature phone market, where it thrived.

Although it couldn't compare to Nokia and other international manufacturers, it had a small reputation. Huawei's phones were even exported overseas, becoming a well-known domestic mobile phone brand with a relatively high global profile.

Huawei also gained a foothold in the Daxia Country market through cooperation with operators, leveraging its communication technology. When it gained certain benefits and market share, the mobile phone market underwent tremendous changes.

Feature phones had been replaced by smartphones, and feature phones were gradually declining. At this time, Huawei also felt the changes of the times. The functions of the feature phone era were basically the same. With the absolute advantage of communication technology, Huawei was able to occupy a place in the feature phone era.

However, smartphones and feature phones are very different. Communication technology is no longer one of the priorities of smartphones. What people are pursuing now is better mobile phone performance, as well as a more powerful system and diversified development.

At that time, Huawei should have also heard news from within the operators that the cooperation system between operators and mobile phone manufacturers would change, which also meant that businesses such as getting a free phone with a recharge would be reduced. Although there were still free phones with a recharge, the number of phones needed would not be too many. At the same time, operators would change their sales model and turn phone bill and phone sales into a bundled business. Although the two businesses have similarities, the gap is still very large.

The first method is for operators to spend a lot of money to purchase most models from manufacturers, and then give away phones based on recharging.

The second method is for operators to cooperate with mobile phone manufacturers to set up mobile phone manufacturers' sales points in the operators' business points, and promote preferential activities when users enter the operators' business points to purchase mobile phones. When users choose packages, they will recommend corresponding mobile phones and give certain discounts.

The first sales method is obviously beneficial to mobile phone manufacturers. Mobile phone manufacturers can directly sell mobile phones to operators without having to worry about it. Mobile phone manufacturers only need to muddle through and produce enough mobile phones.

The second sales method is not a good thing for mobile phone manufacturers. When the two become a relatively bound model, operators will also become more demanding on the quality of mobile phones, and operators will choose mobile phones with better performance and quality from various mobile phone manufacturers for bundled sales.

The senior executives within Huawei saw the changes in the current mobile phone market, and also saw the business crisis of Huawei mobile phones. If Huawei mobile phones continue to develop according to the original business, they are likely to be eliminated by the times.

Yu Dazui was appointed as the head of the consumer business in a critical situation, and also became the head of the mobile phone department. After learning from many successful mobile phone brands, he finally discovered some rules.

Also under the leadership of Yu Dazui, Huawei released a truly independent research and development and production of mobile phones after the year, and it was also equipped with an independent research and development Kirin chip.

This processor chip should be the first chip used on Huawei mobile phones, which also determines Huawei's determination to deeply transform.

This time Huawei has made a very big breakthrough, and has abandoned the original conservative attitude and used an aggressive approach to show the company's importance to the mobile phone business.

This time the mobile phone brought by Huawei did shock many domestic mobile phone manufacturers. Huawei has always had a good reputation in China. In the era of feature phones, it relied on communication technology and good mobile phone quality, and it also had a certain reputation among consumers.

This sudden effort in the smartphone market has put tremendous pressure on domestic counterparts.