11: Rice that is out of stock

As soon as Chen Chen returned to the company, Lu Weibing pushed open the door and said,

"Xiao Chen, there's good news and bad news. Which one do you want to hear first?"

Chen Chen looked puzzled. Why was there good and bad news?

Shouldn't it all be good news?

"Bad news first."

"TSMC can't produce our chips because their 28nm process isn't mature yet."

"And the good news?"

"The good news is that our chip has successfully taped out based on the 32nm process. Dr. Lu is preparing to take the nearest flight back to the company."

Chen Chen breathed a sigh of relief. He knew it—how could there be any real bad news?

Normally, TSMC's 28nm process wouldn't mature until next year.

Building based on 32nm now was perfectly fine.

As long as the performance tests were okay once he returned, it would be fine.

Speaking of chips, Chen Chen truly admired that old man he had never met.

One could only say he had incredible foresight.

He had put together a top-tier chip team.

Coming here, at least he didn't have to start from scratch with chips.

This was a very rich legacy; he had to make good use of it.

"Also, the development progress of red star 1 is just waiting on our chip. The Qualcomm version of the chip has already finished adaptation and can go into mass production by the end of this month."

"I suggest we directly release the Qualcomm version. After all, the S2 chip has already been verified by Xiaomi; it's an excellent chip."

After listening to Lu Weibing, Chen Chen couldn't help but nod.

The explosive success of the mi 1 was foreseeable. Even if he used the same configuration and price as the mi 1, he likely couldn't catch up to Xiaomi's pace at this stage.

Besides, he didn't plan on using the same price. Since Xiaomi had hit the price point of 1999, Chen Chen didn't mind adding more fuel to that fire.

After all, Qualcomm's chips cost $50 each, while his own chips wouldn't cost nearly that much. The initial costs had already been invested; if sales reached over 3 million units, then the cost of his chips would only be around 200 rmb. Moreover, Red Star's current bargaining power was much stronger than Xiaomi's, and some suppliers could accept lower prices.

There were also the foundry fees. Red Star and Foxconn had been partners for many years, so the foundry fees would definitely be lower than those for the Mi 1st generation.

Taken together, by using its own chip, the Red Star 1st generation could achieve a lower price than the mi 1!

The only thing lacking now was time. Could Red Star mass-produce the phones during these days when the mi 1 had no production capacity?

"Wait for Dr. Lu to return and succeed in testing, then concentrate all resources on chip development and adaptation. Then prepare for mass production; we'll hold the launch event next month."

Hearing that Chen Chen wanted to hold the launch next month, Lu Weibing couldn't help but remind him anxiously,

"Xiao Chen, won't next month be too rushed? We might not even finish the adaptation work by then, and even if we launch, we won't have any phones to sell!"

As soon as Chen Chen heard this, he knew Lu Weibing still had a traditional mindset.

It was worlds apart from Xiaomi's Internet Thinking.

"No, no, no, Uncle Lu. This time we need to learn from Dami Company and start an Efficiency Revolution. We'll stock up on the first batch if we can, and if we can't, we'll learn from Xiaomi—directly go with zero inventory and produce according to orders."

"What I told you before about streamlining the personnel structure—don't be afraid of having too few people, as long as we can grasp the key points."

"For those old-fashioned, inefficient guys, fire them if they need to be fired!"

By the end, Chen Chen's voice was quite stern.

In his previous life, he had always been at Xiaomi. He had seen the operational efficiency of the entire Xiaomi company. Looking at Red Star now, everything felt sluggish.

Like a decaying old man.

To change, one must use a heavy blade!

"People like Xu Guangyi—if you don't fire them quickly, are you really planning to exile them to Africa?

And the camera department. A camera department of 12 people actually has two directors and three managers. Who does the work?"

"Right, and that person doing UI—who was it? Last time he said he applied several times and couldn't get the new UI proposal approved. There's actually a director and a manager above him. What use are these people besides wasting food? The head of the UI department I need must understand technology and report directly to me."

Listening to Chen Chen's long list of complaints, Lu Weibing could only smile bitterly. He also knew the company's management was a bit too bloated, but since you, Chen Chen, hadn't returned, I couldn't make such drastic layoffs.

"Don't fire the workers first. Don't let it happen that you don't know the situation and accidentally cut a main artery; that would be ugly. You're more familiar with the management. For pure management who don't come from a technical background, you decide what to do."

It was true; if you fire some management, the company still runs. If you accidentally fire a worker, an entire department might crash instantly.

Chen Chen didn't want to make such a mistake.

Seeing that Chen Chen wasn't in high spirits, Lu Weibing had to head back first to think over the layoff list.

On the way back, he kept thinking about what Internet Thinking was and what traditional thinking was.

In fact, in Lu Weibing's traditional thinking, a batch of phones should be produced first, then launched and sold.

Subsequent orders would be increased or decreased at the factory based on sales performance. If it sells well, produce more; if not, produce less.

The advantage of this was that there would be stock to sell after the launch. Consumers wouldn't have to scramble; it would be available anytime.

There were disadvantages too. If the market response to the phone was very bad, the produced phones could only be sold at a discount. Moreover, the process required warehousing, logistics, and product parts that were depreciating every second.

As for Lei Jun's Xiaomi Internet Thinking: launch first, then produce according to the number of customer orders. This could save a lot of capital and eliminate inventory pressure.

For example, the 169 rmb luggage Xiaomi sold in later generations—could other manufacturers do it at that price?

They could, but they wouldn't make money or would lose money.

But Xiaomi dared to do it because there was no inventory pressure. One could even say they only produced it after you placed the order, shipping it directly from the factory with a label stuck on it.

The profit per unit, after everything, was only a few or a dozen rmb.

The profit came from cutting out the intermediate inventory and channel links.

When Lei Jun wanted to make power banks, he consulted many manufacturers: could they make one for 65 rmb?

Many manufacturers shook their heads; it couldn't be done at that price.

Many people would give up at this step, but Lei Jun's nickname was not like that; he felt his opportunity had come.

"Since others can't make it for 65, if I can, then won't this market be mine?"

As for the result, everyone saw it. The 69 rmb power bank—how explosive were its sales? Over ten million units could be sold in less than a year.

Little did anyone know that Lei Jun, using Internet Thinking to make products for the first time, was currently both happy and troubled.

Although the Mi 1st generation had been launched, except for over 1,000 engineering units, there wasn't a single real mass-produced machine.

Facing the howling netizens and fans online, Lei Jun was truly facing a happy trouble.