Shockingly, a counterfeit factory has produced a 3-nanometer chip.

Chapter 218 "Success" - The Costs of Pressure

"Because we want everyone to have access to smartphones," Lei Jun corrected him.

"Yes! Yes! We need to make sure everyone has access to smartphones," Lin Bin chimed in. "Then how about we set the storage to 512MB and only store the system?"

Then all the data is put onto the memory card. Although it's a bit slow, if the price-performance ratio is good, users will definitely not have any problems.

Lin Bin still hadn't forgotten about the cost. After all, retaliating was one thing, but surviving was more important. He couldn't let his emotions cloud his judgment in business.

"128MB RAM and 512MB storage, that's the configuration of a feature phone, right?"

Users buy it, install a few apps and it fills up, it lags after two months of use, and then what?

They'll say that cheap rice products are of poor quality?

Faced with Lei Jun's reminder, Lin Bin could only sigh helplessly.

He certainly knows that you get what you pay for.

But the current rice is simply not worthy of competing with Honor in the 100-yuan market. This market is about grabbing users, but it's also about burning money.

Using the company's cash flow to cultivate the future market?

But rice companies only raised a few hundred million yuan, while Huawei raised 20 billion yuan...

Moreover, the first generation of Redmi is currently losing 251, but this does not actually include the manufacturing cost and logistics cost, which is around 300 if you calculate it slightly.

Lei Jun thought for a long time and finally said:

"We're making Redmi not to make quick money, but to capture the market and cultivate users. If the user experience is poor, they won't buy Redmi again next time."

Lin Bin knew that his solution was the best option for budget phones, but it negatively impacted the user experience.

Things haven't gotten that bad yet; he's still fundamentally unwilling to agree...

He walked back to his desk and picked up the phone.

"Let me call Zhang Song again and see if we can lower the price a bit more?"

The phone rang for only a few seconds before it was answered?

"Mr. Lei, wasn't the contract just signed?" Zhang Feng's voice was tinged with amusement.

"Mr. Zhang, the contract has been signed, but I have a new idea."

"What?" Zhang Song hesitated for a moment on the other end of the phone.

Is the rice supplier going to change their mind?

He was berated by Tsai Ming-chieh for over half an hour in the office about this contract, and now...

If the other party changes their mind, his promotion plan will fall through... and then Zhang Song will be the one to pack his bags and leave.

"Could the price of the Mtk 6574 be reduced by another 5%?"

The original price of the MTK6574 iteration chip was 143 Chinese Yuan. This price was already very close to the cost price.

Since it wasn't a particularly popular chip, Lin Bin pushed the price down very hard.

"Mr. Lei, aren't you putting me in a difficult position?" Zhang Song gave a wry smile. "The price we signed is already at cost."

If the price drops any further, MediaTek will have to sell at a loss. If the company investigates, I'll probably be fired.

"Mr. Zhang, I know your difficulties, but please let me finish." Lei Jun's voice was serious, but this was just another empty promise.

"The addition of a MediaTek version to the Mi 3 is confirmed."

But I'd like to add one more point: for the next three years, will all business with MediaTek versions come through your company?

Zhang Song's breathing became heavier.

Since everything goes through him, it means all the commissions belong to him.

"I guarantee that this year's annual procurement volume will be no less than 3500 million units." Lei Jun's voice was even more enticing at this moment. "That's the minimum. If Redmi sells well, it might reach 5000 million units?"

A sound of swallowing came from the other end of the phone, indicating that the other party had already fallen for the trap.

"Mr. Lei, are you serious about this quantity?"

"Seriously."

Honor also uses your chips; you should know how many orders they've placed.

Our goal is simply to break even, so our prices will definitely be more attractive than theirs. You should understand how the market will react then.

Another long silence followed... with only the occasional rustling of pages turning.

"I'll make a call and call you back in 10 minutes."

Lin Bin stood aside, pondering what other aspects could be reduced.

It has 128MB of RAM and 512MB of storage. The two batteries were combined into one, the screen was replaced with a 3.2-inch OVGA (320p) resolution screen, the rear camera was a 30-pixel lens, and the front camera was removed.

The GPS positioning system can be removed, a standard mold can be used, a single SIM card can be used, and other components can be reduced. This will significantly reduce the cost, bringing it down to around 700 yuan.

MediaTek was significantly faster; thanks to Zhang Song's efforts, the call came through in less than 8 minutes.

"Mr. Lei, I agree to another 5% reduction." Zhang Song's voice carried a hint of helplessness. "This is the maximum of my authority, so I have one condition."

"A three-year contract, at least 3000 million per year, not a penny less, the original price must be paid."

"make a deal."

After hanging up the phone, Lei Jun started calculating. He figured they could save a few dollars more in costs. With optimizations to other components, the hardware costs could probably be reduced to the point where they wouldn't lose money.

On the OEM side...

Selling one unit will result in a loss of at least tens of dollars, which is still painful, but at least acceptable.

"Old Lin, pass the word down."

On October 28th, the Redmi Mi 10st generation will be available during the Double Eleven shopping festival, with prices drastically reduced and millions of units in stock.

"clear."

"Also, regarding the publicity team, from now on, send out one message every day."

Prices, inventory, and configurations will be released in batches.

We need to build up the buzz until October 28th.

"Old Lin, we absolutely must win this battle!"

Lin Bin stopped and nodded.

Fortunately, Lei Jun made the right choice in the end, and the supply chain achieved a "great victory".

…………

That afternoon, Redmi's official Weibo account posted a message: "The first generation of Redmi, this time it will be a stunning release. This time we are redefining the budget phone."

What other creative uses can be made from rice?

"Could it be another piece of electronic waste with 256MB of memory?"

"Upstairs, what kind of phone are you using? Are 256MB phones in the 100-yuan range considered garbage?"

"Mr. Lei, I just pray it's not futures trading?"

Lin Bin replied: "This time it will definitely not be futures. We have already stockpiled 100 million units. Currently, three contract manufacturers are producing them simultaneously, and we can add 50 units to our inventory every week."

"Holy crap, a million in stock? That's awesome! No need to fight over it now?"

"Awesome! Honor next door should feel the pressure. I wonder if they're scared?"

"Hahaha! Go, Big Meow!"

Lei Jun did not comment in this section; only Lin Bin and others replied.

He simply forwarded that Weibo post and pinned it to the top.

As for him, he turned on his computer and started revising the PPT for the Redmi launch event.

On page 10, he added a sentence: Make smartphones available to everyone.