SWNOVELXO Chapter 677 Mobile Phone Market_2
Last year, the total profit of the global mobile market was $120 billion USD, with Apple alone taking away $90 billion USD.
That's nearly ninety percent of the entire industry.
This is hard to imagine in any industry, only in the tech industry can such a monopoly occur.
Within five years, he definitely doesn't dare to imagine surpassing Apple, and even for the next ten years it's unlikely.
If he can achieve something similar to Samsung, that would already be an extraordinary success.
Just in October, as soon as he announced entering the mobile business, a series of moves far exceeded the expectations of the industry.
He directly invested $70 billion USD into this effort, making him a domestic example of deep pockets.
Chen Pingsheng has never believed in achieving big wins from small investments; his investment strategy has always been big wins from big investments.
The same goes for tech products - for car manufacturing, he relied on investments across the entire supply chain far exceeding competitors to succeed.
Manufacturing phones would naturally follow the same approach.
This month, he liquidated all of his 1% stake in Google, acquiring $16.5 billion USD.
That's roughly 115 billion RMB, to be used for Tengfei Mobile.
Initially planned to directly acquire a major brand, but since no one would sell to him, he had to pull out a trillion capital and start from scratch.
Purchasing Meizu Mobile aside from building the super factory, in four major first-tier cities, he established R&D centers.
Another most important task was building offline mobile sales channels.
This was also the most time-consuming.
Whether it's OPPO or vivo, they rely on extensive offline channels to firmly hold a spot among the top five domestic mobile brands.
This is also the main reason big factories find it very difficult to establish a new mobile brand; frankly speaking, building a phone is relatively easy.
Chips from Qualcomm, systems from Android, assembly from OEMs.
These three combined don't really cost much; the key is to sell well, you must build your own offline sales channels.
Trying to follow in Xiaomi's steps, using a light-asset internet sales model, is completely unfeasible now.
This path has been locked off by Xiaomi.
Before the mobile brand gets established, there's no way channel franchisees would be willing to join.
Once established, the franchise model would lead to profit sharing at multiple levels, eventually losing the cost advantage.
Once, Xiaomi sold phones at 1999 RMB with a clear price advantage as a light-asset internet model.
Now, with Xiaomi's House everywhere, this advantage has become scarce.
It's safe to say that the operational costs of offline stores are now entirely reflected on the phones.
This is the main reason why Xiaomi's phones are getting more expensive.
He's already invested $70 billion USD, with the remaining $45 billion as R&D funds for the next one to two years.
Regarding sales channels, initially, they can only be self-built, Chen Pingsheng allocated another $10 billion USD.
Initiating Tengfei Mobile's sales network, which essentially means opening offline channel stores.
Based on an investment of $500,000 USD per store, he could open 20,000 stores at once.
This sounds like a lot, but considering Blue and Green Factory have exclusive phone stores in each town, these 20,000 stores are just moderate.
Mobile stores have first investments primarily concentrated in first-tier cities.
Only after establishing a good presence in first-tier cities can future franchise models cover all major towns.
Just looking at his current capital, one can understand why the mobile industry is hard to enter.
Without a few billion USD as a foundation, Xiaomi or Blue and Green Factory could easily dominate you.
He has to bring in over a trillion dollars to gain a foothold in the future.
Not to mention Tengying Group already accumulated substantial super factory management experience, along with AI technology including solid-state battery technology.
The only weak spots are the system and chips.
These two are actually compensable with Android and Qualcomm.
He's also been developing his own AI system; whether it succeeds one day is unknown, but clearly, if this step succeeds, it'll mean a lot.
If Tengfei Mobile wants to be fast, it can be manufactured in just a few months.
Chen Pingsheng does not plan to proceed in such a hurry; he plans to formally launch his Tengfei Mobile externally within one to two years.
Either don't launch, or launch a phone with true core technology that can make a big impact in the market.
After all, the domestic market has no shortage of any mediocre phones.
Absorb all of Meizu's mobile technology, and then rely on the four self-established R&D centers to cultivate the core technology in the mobile field anew.
What's more important is to incorporate his AI technology, solid-state battery technology, etc., all into the new phones.
Then through investment over a hundred billion into super factories, achieve perfect matching and assembly of phone components.
All of this requires time.
He is unlike other big factories in a rush, mainly because his capital does not require others' money, nor others' advice.
Disregarding all short-term interests, with only long-term gains in mind.
This is the benefit of available funds.
It's like selling houses; once the land is bought, he can hold it for seven or eight years before selling.
Waiting only for the best period in house prices.
It's the same with phones; October announced a series of large investment directions.
Later, it seems like he stopped, as if he wasn't doing this at all.
Only those in the know understand, the Tengying Group's colossal ship has already set sail.
Just like when he was making cars, investing the most, neither hastily nor slowly emerging, sneakily surprising everyone.
Tengfei Mobile can quickly use money to pave the way through the entire industry chain, but the integration of the technical module, the establishment of offline channels, the development of proprietary technology, etc.