Chapter 36 Supply Chain and Cash Flow
Chapter 36 Supply Chain and Cash Flow
It is not that difficult to assemble, adapt, and optimize the system of a smartphone. However, if you want to make all the core components yourself, that would be very difficult.
Core components such as chips, screens, batteries, and cameras are extremely difficult to produce for contemporary domestic manufacturers, especially for Zhiyun Technology.
At this stage, we can only purchase from outside, and even if we do, there are actually very few manufacturers to choose from.
For example, when it comes to mobile phone chips, to meet the high-performance requirements of smart phones, currently only Qualcomm, Quadcore, and Texas Instruments are doing relatively well.
As for 3G baseband, the only two companies that are doing well and can sell on a large scale are Qualcomm and Infineon. Domestic manufacturers can only choose one of the two.
Compared to the difficulty in obtaining core components, the appearance patent is much easier.
According to his memory, Xu Shenxue registered various classic appearance designs of smartphones. For example, the return button was round like the one made by fruits, so Xu Shenxue applied for an oval one. He also developed various patents for the side and back return button designs... However, these are not actually needed now, as they are mainly to prepare for the subsequent fingerprint buttons.
As for current Android phones that don’t have fingerprint unlocking, there is no need for these things.
Then there is the phone camera on the back, which takes away all the different shapes of multi-phone camera designs on the back.
Although these appearance patents can be easily circumvented by other mobile phone manufacturers after minor modifications... they can still seize the initiative and block the paths of other manufacturers, making it extremely difficult for them to develop fingerprint unlocking and multi-camera solutions in the future...
Apart from the appearance, it is currently too difficult for Zhiyun Technology to develop its own hardware technologies, and some underlying technologies are even impossible, and patent authorization must be obtained.
On January 22, after several rounds of negotiations, Zhiyun Technology, following several domestic manufacturers, reached a patent licensing agreement with Qualcomm on CDMA and other technology licensing, and also reached a chip procurement agreement.
At present, 3G construction has been officially promoted in China. In early January, the 3G technology solutions obtained by the three operators were officially announced. Therefore, Zhiyun Technology also obtained the basic environment for launching 3G smartphones, and began to contact the supply chain and reached agreements one after another.
For example, the chips and 3G baseband are from Qualcomm, the screens are purchased through a purchasing agreement with LG, and the touch ICs are from Synaptics.
In fact, it is not difficult for Zhiyun Technology to obtain these patent licenses and purchase hardware. This is their business, and they will not push the business away if you approach them.
However, Zhiyun Technology is not well-known and its expected production volume is small, so it has no advantage in price negotiations...
Anyway, after colleagues in the supply chain ran around, they finally managed to secure the supply of core components and some patented technologies that needed to be licensed.
The process was naturally very difficult and the negotiations were naturally tough. To be honest, the supply chain staff of Zhiyun Technology received a lot of cold stares.
For example, when negotiating the purchase of touch panel ICs, Synopsys only does business with major foreign brands and manufacturers, while Zhiyun Technology has little reputation and no past proof of strength, and the purchase orders are not large!
If you go to their door, they will do business with you, but the price will be a little higher. For an order of tens of thousands of pieces, they also require batch delivery and installment payment... In this case, the spare parts supplier will not give you any preferential price, just the market price!
There are actually many similar situations, not only with foreign manufacturers of core components. In fact, some domestic mobile phone component manufacturers also offer high prices.
Again, your order is too small... and you're asking for payment in multiple deliveries!
This kind of small customer, who typically has little money but a lot of work to do, naturally won’t give you any price discounts!
For a startup company, these are unavoidable problems!
Fortunately, Zhiyun Technology is not just a startup company. It was spun off from Wecoo Electronics. Although Wecoo Electronics is a manufacturer of miscellaneous machines, it is also an old-fashioned feature phone company and has a large number of suppliers.
At the same time, Weiku Electronics performed very well in the low-end feature phone market in one month, which also gave some confidence to those suppliers.
Therefore, when Zhiyun Technology was negotiating with the supply chain, it encountered relatively few problems. Some suppliers with which it had cooperated before were still willing to give it a try, give you a preferential price, and try their best to cooperate with you, just to bet on whether your smartphone could be made.
If it were a real mobile phone startup starting from scratch, the supply chain alone would be difficult to manage!
Just when Zhiyun Technology was busy with the final R&D sprint and preparing the supply chain and marketing.
Xu Shenxue also did not forget another important company under his control, Weiku Electronics.
After the smartphone and manufacturing businesses were divested, the remaining Wecoo Electronics mainly operates the two brands of Wecoo mobile phones and Xiaolan mobile phones. Currently, these two brands still focus on the low-end feature phone business.
Among them, the Little Blue mobile phone performed well online, so it began to raise its price further in January, trying to seize part of the feature phone market priced at 800 yuan.
Bai Qiwen, the new deputy general manager of Weiku Electronics Co., Ltd., found Xu Shenxue early in the morning with a report document to report on the operation status over the past period of time.
"In January, our V-Cool mobile phones did not experience much fluctuation in the offline market. Limited by the channel capacity, our V-Cool mobile phones are expected to sell 2 units this month. Thanks to the sales impact of the S1 mobile phone and the continued popularity of the S mobile phone, the sales of the Bluegogo mobile phone are expected to reach units, an astonishing increase of more than twice compared to last month!"
"We expect that if everything goes well, the monthly sales of the two brands combined will hopefully exceed 100,000 units, and the gross profit margin will be higher than last month!"
"The production capacity of Weiku Industry is not enough to supply our two brands of mobile phones. We have reached a contract manufacturing cooperation agreement with Huasong Industry. If everything goes well, the company will be able to provide us with a maximum monthly production capacity of 100,000 feature phones."
"At the same time, we are also contacting other foundries to prevent the sales of Bluegogo phones and subsequent mass production of smart phones from being squeezed out by the production capacity of Weiku Industrial."
It has been decided before that the initial small-scale assembly and trial production of Zhiyun mobile phones will be carried out by Weiku Industrial's own factory. For this purpose, equipment has been purchased in advance and workers have been trained. As for the subsequent large-scale mass production, it will definitely be necessary to find large and powerful OEM factories.
Once the production capacity of Wecoo Industrial is squeezed out by the smartphone business, Wecoo Electronics will have to look for nearby large and small OEM factories for its feature phone business. However, there are many OEM factories for such feature phones in the surrounding area with large production capacity, so they are easy to find.
(End of this chapter)