27: Chapter 27 Finalizing the MediaTek Supply Contract

What was even more shocking were the other purchase contracts in the attachment. The combined purchase intentions from the already signed channel distributors indeed exceeded 1 million units per month.

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"President Shen, this volume..."

Liu Zhihong put down the document, and the expression on his face changed instantly. Mood? There was no such thing.

What? Bad attitude? That just meant his service wasn't up to par, or that it was a test from Transsion for him. He had to fix these bad habits.

This wasn't some small-time loser; this was clearly a major patron. Those people at Bird only knew how to hinder his career.

"President Shen, to tell you the truth, MediaTek's production capacity is indeed tight, especially for the Smartphone platform. You also know that last year's sales of the iphone 3g really exploded; everyone is scrambling for capacity and market share.

Our MTK6573 has just entered mass production, and many big manufacturers are lining up for it."

"So what we need to discuss isn't just the price, but also priority," Shen Fei interjected.

Liu Zhihong frowned slightly. Priority? That could be discussed. But Transsion's meager sales volume didn't qualify for it. However, since the major patron wanted it, he would... communicate with headquarters and take the initiative to agree.

"Transsion can sign a three-year long-term contract and prepay 30% of the payment.

But there are two conditions..."

"Please go ahead..." Liu Zhihong nodded subconsciously, his face full of anticipation. There was no need to ask headquarters; he could agree to this himself.

"The price should be reduced by another 15% from the current base, and the second point is to guarantee a monthly supply quota of 500,000 units for the Smartphone platform."

"15%? That's impossible!" Liu Zhihong's expression changed again, and he shook his head subconsciously. Although Transsion's proposal was indeed very tempting, this price cut percentage... They had already squeezed their profits to the limit to grab market share; another 15% drop...

"The most favorable quote MediaTek gives to major clients is only a 10% reduction, and your company already enjoys a 2% discount.

If it's the Smartphone chip platform, I can agree to 15%, but for the Feature phone platform, I can't make that decision." Immediately, a look of difficulty appeared on Liu Zhihong's face.

"That's the price for the domestic market," Shen Fei interrupted him, pressing his advantage.

"Currently, MediaTek already holds over 80%, or even 90%, of the domestic market share, but the penetration rate in the Africa market is not high.

If MediaTek is willing to support us, Transsion's sales in Africa will exceed 20 million units next year, and MediaTek's market share will increase by at least 10%.

I believe President Zhang will be satisfied with this market, and you will be the key contributor to opening it up, earning a huge bonus."

Liu Zhihong fell silent. MediaTek had indeed always wanted to explore other markets.

Africa was an important target, but it was mainly being occupied by Nokia's low-end platforms. If Transsion could really reach 20 million units, that would indeed be an irresistible temptation.

"The Feature phone platform can be reduced by a maximum of 12%, and capacity will not be restricted." Liu Zhihong gritted his teeth, as if making a difficult decision.

"The Smartphone platform can be given a 16% discount, but the supply can only be guaranteed at a maximum of 300,000 units per month. This is the highest authority I have."

"President Liu, we can't play like this, right? Neither plan satisfies me; this is just..." Shen Fei interrupted him. "Don't blame me for being serious; the Africa market has thin profit margins. Every penny has to be squeezed out."

The other party nodded without saying a word.

"How about this: let's slightly adjust the conditions for both sides. Let the Feature phone platform price drop to 13%, and provide 400,000 units per month for the Smartphone platform."

Shen Fei took another step forward from the original basis. The other party was a smart person, and he believed they would agree. However, seeing the hesitation, he added another strike.

"President Liu, I know that the yield rate of the MTK6573 has already exceeded 85%, and the actual cost is 25% lower than your quote. Transsion only wants a reasonable profit."

"This... you even know this."

Liu Zhihong frowned slightly again. The yield rate of the MTK6573 was the top priority for the group, and only a few people knew the specific yield rate.

And he was one of them.

But he had never told anyone in the China market. Where did this guy find out? Did someone leak it while drunk...

It must be those idiots at Bird.

The conference room fell silent.

Chen Hai also chimed in to assist: "President Liu, our first Transsion Smartphone is already under development, and we plan to use the MTK6515 for the low-end model.

If the cooperation goes smoothly, we might use the MT6575 or even a dual-core platform next year. Transsion's sales network in Africa can become the best testing ground for MediaTek's new platforms."

Soft and hard tactics combined!

Looking at the young man under 30 across from him, Liu Zhihong finally realized that this person was definitely not a second-generation rich kid who got his position through connections, but a shrewd businessman.

"I need to report to President Zhang and discuss this matter in person; there are too many factors involved. If possible, we can sign a strategic partnership," he finally said.

"Please go ahead," Shen Fei gestured. "But I want an answer by 5 PM tomorrow.

Because a Qualcomm representative is coming to Guangzhou on Wednesday, and they are also very interested in Chinese manufacturers entering the Africa market."

This was a naked threat, but it was effective.

MediaTek's biggest goal was to break into the high-end market, but this was also their biggest crisis.

Qualcomm's patents in communications were practically given away with their chips; if they tried to break into the high-end, they would be in great danger.

And they couldn't compete with Qualcomm in terms of technology either.

"Understood," Liu Zhihong stood up. "I will give you an answer by noon tomorrow."

After seeing off the MediaTek team, Chen Hai couldn't help but ask: "President Shen, are we really going to meet Qualcomm?"

"Of course we have to meet them," Shen Fei laughed. "If we don't meet them, how can we put pressure on MediaTek? However, Qualcomm's chips are too expensive; we can't afford them for the time being.

But letting them know that Transsion has options is the only way for negotiations to go smoothly, and this isn't the only option."

"Not the only option?" Chen Hai looked at him in confusion.

"Don't ask too much."

...

On the other side, in Bao'an.

The No. 3 factory building at Transsion's No. 2 production base had already become a device dismantling center. At this moment, only an empty factory building remained inside, and the construction team was undergoing emergency upgrades.

At the same time, security capabilities and entry/exit settings had been given an epic upgrade.

Shen Fei returned to his office, pulled up the system interface, and continued to study the recycling and dismantling center.

Equipment footprint: 500 square meters, fully automated operation, requiring only 15 people to operate and maintain.

The core is molecular-level dismantling and atomic-level repair technology, etc., which disassembles waste mobile phones into original parts and repairs microscopic damage, restoring performance to new product levels.

Most importantly, its output is 20,000 units per hour, 480,000 units per day, and 175 million units per year!

This already exceeded the annual inflow of waste mobile phones in Africa.

The King of Africa, huh? Easily within reach.