52: Absolutely not

"President Yu, Red Star just contacted us. They also received the notice about the increase in patent fees. It seems Qualcomm isn't just targeting us at Huawei this time."

Hearing the news from his subordinate, Yu Chengbei tapped his fingers on the table, lost in thought. This price hike by Qualcomm was definitely a bad sign. Furthermore, it only targeted Red Star and himself. Both companies shared a common trait: they had the capability to design and develop chips.

"What does Red Star say?" After a long silence, Yu Chengbei asked.

"Red Star has decided to resist this round of price hikes. At the same time, their president, Lu Weiqi, wants to meet with you to discuss patent licensing matters for Huawei."

"Hmm, let's set a time to have a good talk. Last time, Chen Chen readily agreed to license the type-c interface, so we shouldn't be too stingy this time. Besides, I suspect Qualcomm's goal is to suppress our Chinese domestic chips. The more this happens, the more we need to unite."

Yu Chengbei was also prepared to resist this round of price hikes. As the person in charge of Huawei's mobile business, he clearly understood that having one's lifeline held by others was absolutely unacceptable.

Not to mention a sudden supply cut of chips, even endless rounds of extortion and price hikes were unbearable. Accepting this price hike might temporarily restore a harmonious situation, a good cooperative relationship, but no one could guarantee what they would do next.

Compared to Red Star, Huawei's technical foundation was stronger. Even if they broke ties with Qualcomm right now, it wouldn't affect the future development of their mobile business. At worst, they could just continue using MediaTek and Kirin. The next generation of Kirin chips had already passed simulation verification and were expected to be mass-produced in the second half of the year.

The main issue was what to do in the future. The 4G era was coming soon, and it was really hard to bypass Qualcomm for 4G patents.

A headache. Since taking over Huawei's mobile business, even with several failed models, Yu Chengbei had never had such a headache.

On the Red Star side, after reaching a consensus, Lu Weiqi immediately posted a statement expressing resistance to this unscrupulous price hike.

【We at Red Star firmly resist this targeted price hike. As an international enterprise, raising prices for Red Star without any discussion and without any bottom line—this behavior is absolutely not normal business conduct, nor is it the style an international company should have. We at Red Star absolutely do not accept this!】

Once this post appeared on the Social Media Platform, it instantly blew up online. Everyone was asking what was going on.

"What else could it be? Qualcomm suddenly wants to raise patent fees, and Red Star isn't accepting it."

"What patent fees? Didn't they say there wouldn't be any fees after the patent licensing? How can they suddenly raise prices?"

"The person above clearly doesn't understand. Qualcomm's patent fees are collected several times. First, they collect upfront licensing fees by licensing communication patents to communication companies. Finally, they collect backend patent fees based on whether you use their chips and basebands, and based on the retail price of your mobile phone. As far as I know, their backend patent fee is 5% of the mobile phone's retail price."

"Holy crap, 5%? Is it that dark? That means if a phone sells for 3,000, Qualcomm takes 150? If it sells for 10,000, they take 500?"

"Exactly, that's how it is. Now that Red Star is using its own chips, I estimate the fee won't reach 5%, but I bet it's definitely a few dollars per phone."

"No way, are you saying every phone in China has to pay this USA company? And now they want to raise prices?"

"I don't know exactly how much they are raising the price for Red Star, but this is definitely a bad sign. Now it depends on how Red Star handles it. Our communication technology in China still can't compare to the USA companies; there's no way around it."

"I estimate Red Star will eventually give in. What else can they do if they don't? Stop the mobile business? Or find another company to replace them?"

"We should firmly resist! We shouldn't just resist Qualcomm's price hike; we should also resist these USA companies. Think about it: if core technology is in the hands of outsiders, doesn't that mean our phones have no privacy at all?"

"Don't be naive, the person above. What can we use to resist? Sigh."

Compared to the worried netizens, ever since Dr. Zhou and Dr. Lu, who had rushed back from Taiwan, had given Chen Chen some peace of mind, he wasn't worried anymore. Huawei had also agreed to license their technical patents.

It didn't matter. Qualcomm could do whatever it wanted; in any case, he wouldn't accept the price hike.

If they cut off cooperation, so be it. It would have to be cut off sooner or later.

"Boss, the reaction from Red Star seems very intense. Regarding our urging, their president directly expressed opposition."

Smith also had a headache. He had thought that with this one-dollar price hike probe, Red Star would agree after weighing the pros and cons. But he really hadn't expected such an intense reaction, to the point where they didn't even care about cutting off cooperation.

On the contrary, they were now in a difficult position. Qualcomm didn't want to completely cut off cooperation with Red Star right now. Their sales volume in China was currently quite high, definitely ranking in the top five. They collected quite a bit in annual patent fees, and who knew, maybe future models would use Qualcomm chips.

Cutting off cooperation directly was a bit too regrettable.

"How about this, Jack. Tell them that the price can be negotiated. I need to get their license for the type-c interface. Even if it only goes up by 1 cent, it has to go up, otherwise, we'll lose all face this time."

After receiving Qualcomm's reply, the atmosphere at Red Star suddenly relaxed—Qualcomm had backed down.

As long as their attitude was tough enough, Qualcomm wouldn't dare to do anything for real. However, this probe had let everyone at Red Star see Qualcomm's true face; they were treating Chinese companies like sheep to be sheared.

"Don't accept it. Forget 0.5 dollars, Red Star won't accept even 1 cent."

Compared to Chen Chen, Lu Weibing, who had come through that era, hated these USA companies even more, and his attitude was extremely tough.

"Uncle Lu is right. Even if it's 1 cent, we at Red Star won't accept it. And they still want to license our fast-charging technology? Dream on!"

Facing Red Star's second refusal, Smith was truly at a loss this time. A small probe had unexpectedly evolved into this.

Smith, who was losing face, hardened his heart. With a dark expression, he said to the CEO:

"Fine. Since Red Star is so tough, then just cut off cooperation directly. Put them on our Qualcomm blacklist. From now on, they won't get a single chip from us!"

"Boss, is this... do we need to ask the Board of Directors for instructions..."

Jack Wells was a bit apprehensive now. A few days ago, he had been hoping to see Red Star come begging or sit down to negotiate. Now, it was the opposite: they were directly terminating cooperation.

"No need to ask for instructions. I have full authority this time. Implement a ban on Red Star Company in China and no longer accept their cooperation."

"Alright. I hope we won't be held accountable by the Board of Directors."