67: Chapter 67 Lei Jun: Oh no, my luck...

Shen Fei spoke modestly: "Huawei's technical foundation is right there, and with a good guide, the fire just caught on. Apart from that funding, we didn't play much of a role."

"That funding is the key. Those components are also very important." Mr. Ren spoke for a while, then continued to fiddle with the Smartphone.

After a while, he spoke again: "Now, regarding the pricing issue. CEO Shen, what is your suggestion?"

Mentioning price, Shen Fei's playful side immediately emerged. Of course, this wasn't ordinary play, but play with great potential; after all, in his previous life, a certain company relied on this price to completely break out.

Sorry, Lei Jun! I'll cut Xiaomi's fortune in half first. I believe Lei Jun can make a comeback with his marketing.

At this moment, Lei Jun, who was working at Kingsoft, suddenly felt as if something was leaving him...

"Let's go with 1999."

"How much?" Big Mouth Yu thought he had misheard.

The office instantly went quiet. Big Mouth Yu and Mr. Ren both widened their eyes. Then, Mr. Ren, not believing it, picked up the phone and placed it in front of Shen Fei.

This phone sells for 1999?

"It is indeed 1999 Chinese Yuan." Shen Fei repeated.

Seeing that he was not joking, Big Mouth Yu immediately became anxious.

"CEO Shen, this is impossible. The hardware cost of the Mate, even at the cost price you provided, is close to 1800. 1999 leaves almost no profit."

"You have to know this is a Smartphone. Samsung and Nokia's Feature phones sell for three or four thousand, not to mention Smartphones."

"Apple's iPhone, if converted, is also 5000, and we are selling for 1999..."

"Only in this way can we shock the market." Shen Fei was not surprised at all.

This price may not make money in the beginning, and might even result in a loss. But once the volume picks up, it will definitely be a huge profit.

"CEO Yu, let me ask you a question. How many people in our country can afford a three or four thousand [Yuan] phone right now?"

"Three or four thousand... there must be tens of millions, or even over a hundred million people, but most people won't spend that kind of money."

"Then how many people can afford a 1999 phone?"

"This... well, this price is about the same as a mid-to-high-end Feature phone. As for a Smartphone, it's ridiculously cheap. Most people can grit their teeth and buy it; the number is at least... over three hundred million."

"So..." Shen Fei spread his hands. "Are we doing business with 100 million people, or 300 million people?"

Big Mouth Yu opened his mouth but didn't speak; he was convinced.

"But 1999 is indeed too low." Mr. Ren shook his head slightly. "This price is indeed very attractive, but it is very likely that we will be trapped by this price, which is not good for the future. CEO Shen, don't test us on this; we fully support it."

Mr. Ren was worthy of having been in the business circle for so many years; he immediately understood the feasibility and the shortcomings of this plan. And he guessed Shen Fei's follow-up ideas.

"So I suggest taking two paths."

Shen Fei combined the old path that Huawei took in his previous life with Xiaomi's experience to create a more perfect plan.

"So Huawei should be the main brand, targeting the high-end market. I suggest the first Mate be priced at 2599, focusing on quality. At the same time, we establish a sub-brand specializing in the cost-performance market, and release both phones in succession. Use these two phones together to shock the market, and then leverage our carrier channels. While foreign manufacturers are still dealing with the financial crisis, we will first capture the bulk of the domestic market. Then accelerate the end of the Feature phone era."

"A sub-brand." Big Mouth Yu nodded slightly; this was a good idea. But this involved naming, and then he carefully glanced at Shen Fei.

"This plan is good... A dual-brand strategy can also better hedge against risks. I wonder what you, little friend, think about the name?" A smile immediately appeared on Mr. Ren's face.

In terms of naming, he really didn't trust Big Mouth Yu. An engineering guy... what does he know about names?

"Let's call it Honor," Shen Fei said.

Then, looking at the two thinking, Shen Fei continued to say, "This plan is indeed a bit rushed. The first-generation Honor phone will use the same design as the Mate, the same chip, and the same system. But the shell will be plastic, the camera pixels smaller, the battery smaller, or just use a regular battery. The cost will be pressed to around 1400 yuan, and then priced at 1999, or even flip the table and set it at 1799... spreading quickly through carriers."

"Honor, bringing glory to one's ancestors..." A flash of light passed through Mr. Ren's eyes, and then he looked at Shen Fei.

"That's right, that is indeed one reason, but its greater responsibility is to undertake the sales task of domestic mobile phones, which is also a great glory."

"I was narrow-minded." Mr. Ren picked up the teacup on the table again and toasted Shen Fei.

Shen Fei clinked his cup and said again: "At that time, Honor will be responsible for volume, seizing the market, and cultivating user habits. Mate will be responsible for prestige, establishing brand image, and earning profits. When the two brands expand the market, users will naturally upgrade to the higher-end Mate series."

As for Big Mouth Yu on the side, he was there holding a small notebook, taking a private lesson from Shen Fei.

Speaking of this, Shen Fei once again looked at Big Mouth Yu, and then asked a key question.

"CEO Yu, do you think if there is a phone that looks similar to the Mate, works similarly, and is a few hundred yuan cheaper, which one will users choose?"

Facing the sudden question, Big Mouth Yu thought it wasn't that simple. Could there be a trap? So he thought about it for a moment.

But after thinking for a while, it seemed there was no trap.

"What's there to think about? For consumers, they will definitely choose the cheaper one. Most users don't understand the parameters; they only look at the appearance and price..."

"So..." Shen Fei nodded with satisfaction, and then summarized.

"Honor will set the benchmark and move upwards. Walking on two legs, we have both sales and brand. Anyway, we are not short of money, so we can afford trial and error."

Not short of money, and can afford trial and error, made Mr. Ren think for a long time, and finally, he nodded.

"I agree. But the Honor brand will definitely be filled with the smell of gunpowder, so it must operate independently."

"Of course, I have the same idea. If Mr. Ren didn't mention it, I would have separated it as well," Shen Fei said.

"Honor can be placed under Huawei Terminals. If Mr. Ren is willing, it can also be placed under our joint venture company."

"Let's put it under Huawei Terminals; otherwise, Honor would be on the same level as Huawei Terminals."

Shen Fei nodded. He didn't care about this issue; it was the same wherever it was placed, as long as it followed the plan.

He looked at the date again: "Honor can be a little later. By then, it can be the first to be equipped with Taishan fast-charging technology. This is an exclusive selling point that can quickly build a reputation."

Big Mouth Yu was already excited: "Fast-charging technology will be mass-produced soon. Then when will the first Honor phone be launched? I will have the project department hurry up and trim it down."