“Is this product similar to the definition of luxury, focusing on high-end consumer goods from electronic brands?
If you can succeed, you will be better than Sony and Samsung. Their products are luxury goods in China, but they are just ordinary commodities in developed countries.
Therefore, we have always advocated the importance of technology research and development. Only when technology research and development achieves breakthroughs can our masses afford good industrial products.
In the 1980s, refrigerators, air conditioners, and televisions were considered luxuries. With the development of technology, these commodities have now been downgraded. "
Zhou Xin: "Yes, Matrix is a high-end brand that focuses on consumer electronics. Maybe in the future we will make mid-to-low-end brands with high volume, but Matrix will only be defined as a high-end brand."
This is also based on Huawei's thinking. Huawei takes the high-end route and Honor takes the mid-to-low-end route.
"Only high-end consumer electronics brands can have sufficient profit margins, and only sufficient profit margins can support technology research and development."
The other party retorted: "Comrade, I disagree with you on this point. It's not that we don't want to make products that are profitable enough, but we don't have the conditions.
First of all, we do not have unique technology. Secondly, our national image and the growth stage of Chinese enterprises determine that we cannot build a high-end electronics brand.
Neon, Korea and Lion City have all gone further than us on the road to economic development. Even for them, their consumer electronics brands are still mainly mid- to low-end.
High-end products require high costs from research and development to production to marketing, and our companies cannot afford this cost.
What I disagree with is that only high-end brands can have sufficient profit margins. Once the volume of mid- to low-end brands increases, the profits will also be considerable.
We can gradually increase investment in research and development, and we can eat as much as we have. Products focusing on mid- to low-end brands will naturally move up to the high-end when technology accumulation reaches a certain level.
This is a process, and our country needs such a process.
Because you became famous in America, from the perspective of the majority of overseas people, being Chinese is just one of your many identities that is not so eye-catching. In contrast, Silicon Valley people are more identified with their identity.
Matrix's production, manufacturing and marketing are all in Americen. Even if you are the founder, it is not a Chinese brand. "
What the other party said is also the strategic strategy adopted by Huaguo. No matter what industry it is, I will take over it first. As long as there is profit margin, even if it is just a little, I will do it.
This is how the white goods industry started, slowly mastering core technologies.
Zhou Xin said: "Just talking about matrix keyboards, most of the production is in China, and the R&D and marketing are in America.
Your words also gave me some inspiration. At the same time, from my perspective, it is true that when the profits of mid- and low-end manufacturing reach a certain level, they can generate enough profits to feed back research and development.
One problem is that there will be many companies capable of undertaking these businesses in the mid- and low-end manufacturing industries, which means that the mid- and low-end manufacturing industries in each industry will be allocated to different companies.
Take the refrigerator industry as an example. There are many brands of refrigerators in China. After fierce competition, a few large companies may survive in the end, forming an oligopoly situation.
However, in the process of competition to oligopoly, there is not much profit to invest in R&D. It will be until the oligopoly situation is completed that the surviving oligarchs will gradually increase their investment in R&D.
China, on the other hand, lacks a mechanism to form a positive cycle ecosystem between industry and research and development.
I have not thought of a good solution for industry, academia and research.
Talking back to Matrix, the manufacturing of Matrix keyboards is in China. Our internal Matrix mobile phone project has been approved and is now in the research and development stage.
For the core chips of matrix mobile phones, as long as Chinese companies can meet the requirements, I will let Chinese companies enter the matrix supply chain.
For example, Hua Hong Semiconductor's storage products and logic circuit products, as well as mobile phone chips manufactured by Chinese companies in the future.
I will try my best to consider Chinese companies in these matters, and at the same time, I will also promote the proportion of Chinese companies in the entire industrial chain.
I personally handle chip design and lithography machines. China has memory chip manufacturing and DRAM manufacturing. We will incubate companies in the entire semiconductor industry upstream and downstream.
To put it simply, matrix will become a market-oriented carrier. Such a high-end brand not only has enough room for profit.
What's more important is to help China's semiconductor companies endorse it. They can't only supply matrix for one brand. If they want to be bigger and stronger, they definitely need to supply other companies at the downstream integration end of the supply chain.
For example, for companies such as Nokia, Motorola, Sony, and Samsung, their status as matrix suppliers will be of great help in entering the supply chain systems of these companies. "
This is the same as future generations who can become a member of the fruit chain and want to enter the supply chain system of other mobile phone brands will get twice the result with half the effort.
After Zhou Xin finished speaking, the other party nodded frequently: "I understand what you mean, matrix is equivalent to the chain owner of the supply chain.
Taking advantage of its dominant position in the entire supply chain, it has a strong influence on the resource allocation of most enterprises throughout the supply chain.
At the same time, we will use this influence to promote the growth of Chinese enterprises. "
The concept of supply chain chain owner can often be seen on government affairs websites twenty years later. The concept of chain owner appears frequently in official newsletters of powerful cities such as Shenhai, Pengcheng, and Hangcheng.
What drives the industrial chain and supply chain to strengthen together? Many companies in Shenhai emerged from the cocoon and became chain owners. What is it about building a circle and strong chain and creating ten key industrial chains worth hundreds of billions?
At the turn of the century, you could often see the term chain owner in the news.
At that time, the media focused on which home appliance company could become the chain owner, and put forward specific concepts:
In supply chain integration, coordination of interests should take precedence over information transparency. When controlling and integrating supply chain resources, companies that can find new profit growth points can often become "chain owners."
Zhou Xin said: "You have a much deeper understanding of the electronics industry than I thought. Including the precise use of these terms, I only learned about it after doing matrix."
The other party smiled slightly: "This is an old concept. If I remember correctly, this concept existed more than ten years ago.
I have many more channels for receiving information than the outside world imagines. If I don’t know such an old concept abroad, how can we talk about industrial development?
Including the chain owner, I saw an article on Internal Reference in June this year about this matter. Changhong and the others signed a monopoly supply agreement with the eight major color tube factories at the end of last year.
Color tubes, also known as color picture tubes, are the core components of color TVs. Changhong controls the upstream core components and drastically cuts prices. In April, it cut prices in an attempt to defeat all other competitors.
Originally, Changhong was the chain owner, otherwise the eight major color tube factories would not have signed a monopoly agreement with him.
They want to further become the only chain owner of the entire chain.
Internal Reference asked me what to do, and I approved that it was not recommended to use administrative means to interfere with market behavior.
In the end, Changhong failed because they neglected two things. One was the availability of color tubes in the second-hand market, and the other was the credit problem of the color tube company.
Now that Changhong has a large number of color tubes, it is estimated that there will be a big price war. "
Zhou Xin listened with great interest.
"I think there is no problem with your strategic concept, but there is a problem with the specific implementation.
How can you guarantee that matrix will be successful? "
Zhou Xin said: “Our mobile phones are expected to launch the first batch of products in the fall of next year, and I use the results to prove it.
As for the support I hope to gain from the development of the supply chain driven by matrix, I will talk about this after there are results.
Because if you don’t succeed next year, you will succeed one day in the future.
But regardless of whether matrix will be successful or not, I will keep these two companies in China for photolithography machines and chip design. "
I will update one chapter today and another chapter tomorrow morning.
(End of chapter)
