49: Chapter 49 How Much Should a Smartphone Cost?

"Then for the high-end version, let's follow what Mr. Li said and change the camera lens to 5 megapixels. Then, start the same memory version at 299 yuan, and we can also provide some ultra-large memory versions to push the price above 300 USD."

"Performing a cut-down isn't a big problem. We have already reserved some plans and can do it at any time. But isn't the differentiation a bit small..."

"Cutting one lens is indeed not enough; everyone will choose the low-end version."

"How about we also cut down the middle frame and the back cover?"

"What else can we cut? It's already plastic. If we cut any more, are we going to change it to transparent?"

Regarding how to cut down features or what price to set, the conference room was filled with endless debate, and everyone had their own reasons.

After discussing for a while, Shen Fei looked at Mr. Adebayo, who was sitting to the side.

"Mr. Adebayo, you are on the front lines in Africa and understand the local market better than we do. Tell us what you think."

Mr. Adebayo stood up and bowed deeply to Shen Fei first.

Everyone present was stunned for a moment.

They knew there was a very capable market manager in Africa who learned quickly, but they didn't expect him to learn so fast—he had actually picked up this gesture.

While they were looking at each other, Mr. Adebayo wiped away tears while speaking with deep emotion:

"Mr. Shen, thank you so much. If it weren't for you, I might still be repairing phones in the Bal Market..."

[Ding! Congratulations to the host: Loyal Retainer +1. Loyalty System activated.]

Shen Fei's eyes widened instantly, and he began to carefully study the Loyalty System in front of him.

Looking at everyone, Huang Tianya was naturally at 100%, at the level of a loyal retainer, absolutely loyal.

Li Qing, Chen Hai, and the other veterans who went to Africa with him to develop the market were basically at 95% loyalty, at the level of absolute loyalty.

Liu Zhihong and others were also able to maintain it above 90%...

It could be said that no one participating in this meeting was below 90%. After studying it a bit and getting the gist, Shen Fei closed the system interface and continued the meeting.

Looking at Mr. Adebayo, who was still giving his speech, he waved his hand and said, "I know your heart, let's talk about business."

"Yes."

Mr. Adebayo immediately took out his research report: "Over the past period, our Africa branch has also conducted several surveys in Nigeria, Kenya, Ghana, and Ethiopia."

"It was mainly aimed at our high-end customers. We took out a few Smartphones to show them and asked how much they would be willing to pay to purchase such a novel experience."

The relevant survey data also appeared on the projection screen.

Nigeria: Average psychological price point of 400 USD.

Kenya: 362 USD.

Ghana: 270 USD.

Ethiopia: "195 USD."

"Why is there such a big difference?" Liu Fang, the head of the supply chain, put down her teacup.

"Because of the level of economic development," Mr. Adebayo explained.

"Nigeria's development level in Africa is quite good, and there is a large middle class. Mainly because Samsung and Nokia have invested there to a certain extent, users have an understanding of high-end phones and know that you get what you pay for."

"Ethiopia is the opposite. Most people there still use Feature phones and don't understand what so-called Smartphones are. Their income is also low. Although they are tempted, they cannot afford them."

Everyone in the conference room immediately nodded to show they understood, and then began a new round of discussion.

After discussing for a while, Mr. Adebayo continued: "Actually, when we were conducting the survey, we discovered a rather interesting piece of data."

"When I said that if Transsion were to also create a similar Smartphone, users' psychological price points generally increased by 10-20%."

"They said that Transsion's phones are worth it even if they are a bit more expensive because they are durable, have good signal, take clear photos, and have good after-sales service."

"These high-end customers have already recognized our brand to a certain extent."

After Mr. Adebayo finished speaking, the people who were originally discussing immediately fell silent.

At this moment... a very bold conclusion immediately emerged in everyone's minds.

"Brand loyalty."

While they were silently thinking it, Shen Fei had already spoken the answer.

"We have established brand loyalty in the African market in less than a year. This is fantastic news."

"Yes," Mr. Adebayo nodded. "So my suggestion is a unified price of 349 USD."

"This price is very competitive in Nigeria, and for the target users, it might even be a bit low. In very underdeveloped regions like Ghana and Ethiopia, it might be a bit expensive, but it can still sell based on brand premium."

"This profit is indeed acceptable," the Financial Director confirmed again.

"Actually, this price isn't expensive; compared to Nokia and Apple, it's already much more conscientious."

"This price can also be considered thin margins for high volume," Mr. Adebayo said very firmly. "Besides, the goal of the S1 is not to make money, but to capture the market."

"As long as we capture over 30% of the Smartphone market share in Africa, subsequent software services, app revenue sharing, accessory sales... will all be profit."

Just as everyone was arguing, Huang Tianya also brought out a key piece of data.

"When we were investing in them, we also calculated in detail that the African Smartphone market will grow from the current hundreds of thousands of units per year to 30 million units."

"If we lay the groundwork now, in the future, we'll have tens of millions in annual sales. A gross profit margin of over 50% multiplied by tens of millions in sales—how much would that be?"

The sound of calculator buttons rang out in the conference room. Soon, the Financial Director raised his head, and his eyes had changed—it was a very "wise" look.

"If we sell 10 million units a year at a price of 349 USD, the gross profit is... 1.5 billion USD in profit."

"That's definitely doable, and as the scale expands, our costs will also decrease," Chen Hai quickly reacted, and then he said excitedly.

"Once their self-developed chips are mass-produced, the costs can go down even further. By then, the gross profit margin might be more than 60%."

Everyone didn't even consider the thoughts of competitors, not because they were overconfident, but because of the unique advantage of their photography algorithm and user word-of-mouth.

If they want to enter, they can, and Transsion welcomes them at any time.

But they had better be well-prepared, otherwise they will be the second Bird, with phones that won't sell... and then repeatedly getting fleeced by the locals in various ways.

Everyone thought about the future layout for a moment, and their faces were filled with irrepressible smiles.

Soon, Shen Fei clapped his hands, bringing everyone back to reality: "Are there any opposing opinions?"

No one in the conference room spoke...