217: Chapter 217 Selling one? 251?

"Mr. Zhang, this price…" the legal counsel beside him whispered, "It is far too low compared to the price we offer other clients."

Zhang Song ignored him.

As long as the volume is high, the board of directors won't be able to disagree.

After all, this price is still not lower than Transsion's. As long as it doesn't cross that bottom line, it's acceptable.

He looked at the numbers on the contract, his mind calculating rapidly.

The initial cost of the MTK6573 was roughly 700 New Taiwan Dollars, equivalent to about 150 Chinese Yuan. But now, its cost has dropped to around 120 Chinese Yuan.

The price for Xiaomi, 165 yuan, is slightly higher than the cost price.

A profit of 45 yuan.

As a Smartphone chip, this is already considered a low-profit product.

However, a volume of 15 million is enough to fully occupy the entire production line's capacity. Once economies of scale kick in, the cost can be reduced even further.

With next year's iterative chip, this order will be able to make more money.

Make big money!

More importantly, signing this contract is equivalent to tying Xiaomi to MediaTek's chariot.

Regardless, Xiaomi is definitely more reliable than Huawei and Transsion.

As for the entire Chinese market, Qualcomm and NVIDIA are both fighting for a piece of the pie. If MediaTek doesn't step up now, it will really only be left with scraps.

"Mr. Lin's sincerity is high; I cannot refuse." Zhang Song picked up his pen and pulled the contract toward him.

"Mr. Zhang, should we discuss this with the board again?" the legal counsel reminded him once more.

"No need." Zhang Song signed his name on the contract. "If there are any issues, I will take responsibility."

...

The news reached Dami Company, and Lei Jun, who had been holding back for a long time, finally posted on Weibo.

"Two days ago, someone at a press conference mocked us, saying that while we talk about popularizing large memory, we immediately turn around and serve up a low-memory version. That move was certainly interesting.

They also claimed that while we talk about universal benefits, we start calculating the moment costs increase, saying our 'popularization' is just a slogan and that stripping down specs is our standard practice.

We won't offer too many explanations regarding this, because true popularization requires showing some sincerity.

After negotiating with multiple suppliers, Dami Company is officially entering the 100-yuan market, and our new phone will be released soon.

No empty talk, no trademark gimmicks. We provide sufficient memory, honest pricing, and we refuse to use tricks to fool our users.

Also, I advise our competitors to stop preaching to others and to pull back your own low-spec offerings. Xiaomi is coming to the 100-yuan market. This is what true technology for the masses is all about."

Once the news broke, the entire mobile phone industry was shaken.

The 799 Honor is already cheap enough. Now that Dami Company has entered this market, given the bad blood between the two, will they continue to fight?

Just how cheap will Smartphones actually get?

799? Or 699? Or even lower?

Meanwhile, Xiaomi's official Weibo account began a countdown.

27 days until the Redmi brand's new product launch event. (October 28th)

Many excited Mi Fans gathered under Lei Jun's Weibo post.

"Mr. Lei, keep it up! I'm not a Mi Fan, and the specs of the Enjoy series are indeed good, but I don't like Taishan System. You must release a product to compete with it!"

"I support 100-yuan phones. How long has the Enjoy series been on the market? They still haven't lowered the price. Where do they get the nerve? We must teach them a lesson."

Lei Jun sat in his office, looking at the Mi Fans cheering him on in the comments section, with only one thought in his mind.

Big Mouth Yu, Shen Fei—this time, he wouldn't lose…

After all, he hadn't had a peaceful night's sleep in days. Every time he closed his eyes, Big Mouth Yu's iconic smiling face would appear in his mind.

Besides that, there was another person haunting him… He couldn't see his shadow, yet he could feel his presence at every moment.

And that person was constantly stealing the plans from his mind.

Although that person hadn't shown his face, Lei Jun knew clearly that it was Shen Fei.

...

October 20th, Jingdu, Dami Company.

Lei Jun hadn't rested well for over half a month.

It wasn't because of overtime, but because of a nightmare. The closer the launch event got, the more he feared that Big Mouth Yu would pull some new trick on him.

But the attack from Huawei didn't come; instead, the supply chain played a massive joke on him.

That cost accounting sheet looked, in every way, like a math teacher playing a joke on him.

Lin Bin pushed the door open and walked in, holding the latest supply chain quotes in his hand.

"Mr. Lei, everything has gone up."

Lei Jun took the sheet, glanced at it, and his expression darkened further.

For the MTK6573 and its 'toothpaste-squeezing' upgrade, the 6574, although MediaTek had promised a 10% price cut, every other component was rising in price.

Flash memory was up 8%, storage up 12%, batteries up 3%, and even the packaging boxes were up 2%.

The impact of the 3/11 earthquake in Japan was still ongoing, and the global semiconductor supply chain was facing shortages. Chinese Smartphone manufacturers were fighting over the little remaining capacity.

[Japan: I've already been through the earthquake, and now you're all making me the scapegoat? Doesn't your conscience hurt?]

"What's the cost now?" Lei Jun asked.

Lin Bin shook his head. "Based on current prices, the BOM cost for the first-generation Redmi is about 950 yuan.

Including R&D, marketing, distribution channels, and after-sales, the comprehensive cost is 1,050 yuan."

"Our expected pricing is 799, which means we lose money on every unit sold?"

"251?"

Lin Bin gave him the final answer directly. It was a very ugly number.

It was agonizingly close to 'two-hundred-and-five'.

Lei Jun closed his eyes and began to consider if it was worth it.

Losing 251 yuan per unit meant a loss of 251 million for 1 million units.

For 10 million units, that would be 2.5 billion.

Xiaomi's Series A valuation was 750 million. It looked like a lot, but the total valuation was only about 5 billion RMB.

If Redmi sold 10 million units, the hardware costs alone would eat up half of the company's market value.

This wasn't a money-making venture, nor was it some sort of hope; it was a monster that would devour the company.

"How about… we wait a little longer?" Lin Bin suggested tentatively. "We could wait for supply chain prices to drop before releasing it."

Reason told him that as soon as this product was released, it would be a massive hit, but it would also drag Xiaomi into the abyss.

But at this moment, in order to exorcise the nightmare in his heart, Lei Jun shook his head.

"We can't wait any longer." He stood up abruptly and looked at Lin Bin. "The Enjoy 2 series is definitely on its way.

Do you remember what I told you? If they bring the K3v1 down to the 100-yuan price point, we will have absolutely no chance to enter the market."

Lin Bin nodded.

He understood what Lei Jun meant. Releasing Redmi now meant losing money to capture the market. If they waited a few more months to release it, they wouldn't even have the chance to lose money—they'd be shut out entirely.

"Then… can we cut the RAM to 128MB? And the storage to 1GB? We could also cancel the second battery that comes in the box," Lin Bin suggested. "That way, we could lower the cost by at least 100 yuan."

Lei Jun sat back down and considered the feasibility of this plan.

The 100-yuan price point was for the elderly; they really didn't need large storage.

1GB of storage was enough; Honor next door was also using 1GB.

It seemed they wouldn't be wrong to do that.

"Old Lin, do you still remember why we wanted to make Redmi?"

"To snipe Honor?" Lin Bin said subconsciously.

Lei Jun glared at him, and Lin Bin instantly changed his answer…