With a strong ecosystem behind them, there would be a huge bonus in everything they did. In fact, in the internet industry in Hua Xia's previous life, Teng Xun was more likely to succeed in all user-based products than ordinary companies. In fact, Teng Xun had indeed done many businesses very successfully. As for those that were not successful, it was either because Teng Xun did not do it well enough, or the enemy was too strong, strong enough to surpass the bonus given by Teng Xun.
It was easy to explain this problem with a hypothetical formula. For example, Teng Xun itself had a huge user base. No matter what kind of user-based business it did, it would have a 50% bonus. If Teng Xun itself achieved 80 points, then with an additional 40 points, Teng Xun's actual score would be 120 points. Other companies in the market could only achieve 90 points even if they worked their hardest. Therefore, Teng Xun could be the first in the industry.
However, the reason why Teng Xun had not been able to do e-commerce was not because Teng Xun was not suitable for e-commerce, but because it did not do e-commerce well. If Alibaba's e-commerce reached the limit of 100 points, then even with the 50% bonus, Teng Xun itself could achieve 30 points. If it did not do a good job, even with the bonus of ecology, it would still not pass.
It was the same for Weibo. If Sina Weibo achieved 80 points, Tencent Weibo could only achieve 20 to 30 points.
Now, Li Mu's YY itself was a more powerful Teng Xun QQ. Therefore, in theory, any user-based product Li Mu made would receive a huge bonus from its own ecosystem. Under such circumstances, even if it barely passed, it would be able to surpass most of its competitors. If it put in a little more effort, no one would be able to match up to it. If it put in a little more effort, it would be invincible.
YYtunes was an unprecedented super product created by Li Mu based on music. Not only did this product integrate several major functions of iTunes in the later stages, but it had also made a greater improvement on these functions. The "Music Social" built on music itself and supported by the YY social function was a superweapon that no other similar products could compare to. It was even a superweapon that could not be replicated.
ITunes was a product that Apple had just launched this year. Although the response was good, it was still a first-generation product after all. Its maturity and combat power were far inferior to Li Mu's YYtunes. If this product was launched, it would definitely have a huge impact on Apple's iTunes in the overseas market. In the domestic market, it would directly cripple the Easy Listening website that Baidu had just bought.
If Apple had the iPod hardware as its ultimate defense, the Easy Listening website in Baidu's hands would not be able to defend against YY Music.
Li Mu had no intention of tricking Baidu, but in the face of Apple, he could no longer care about the life and death of Baidu, even if he was one of the shareholders of Baidu.
In order to completely destroy Apple's industry chain in iTunes and iPod, Li Mu had specifically approved a sum of money to do a second-generation upgrade of Mango-ME when he commissioned the development of YYtunes. YYtunes was aimed at iTunes, and Mango-ME was aimed at iPod.
During this time, Makino Technology's hardware laboratory, as well as several domestic and Taiwan MP3 OEM companies that Makino Technology had acquired, were working together to develop a new generation of Mango-ME. Among them, several senior engineers were poached from Taiwan's Nvidia with high salaries. Nvidia was the OEM company of Apple's iPod, and its production line was in China. Therefore, a considerable part of the iPod's industrial technology was used in the new generation of Mango-ME.
The research and development of the new generation of Mango-ME had now been completed and had begun to enter mass production. The new generation of Mango-ME was named Mango-ME2. It added some practical functions on the basis of Mango-ME, such as a larger screen, stronger sound effects, better touch wheel operation, and a more reasonable UI and human-computer interaction.
It was worth mentioning that in order to enhance the sound effects of Mango-ME2, Makino Technology bought out the audio processing technology of a well-known player manufacturer in Taiwan. They provided a variety of highly adjustable equalization modes in Mango-ME2, which provided sufficient support for the sound quality.
In addition, the team also greatly increased the memory capacity on the basis of the original 64 MB and 128 MB. The new generation of Mango-ME had 128 MB flash memory, 256 MB flash memory, and 5 GB, 10 GB, and 30 GB hard disk versions.
The industrial design concept of Mango-ME and ME2 itself was inspired by Li Mu from the iPod a few years later. Overall, it was several generations ahead of the current iPod, and the production technology was the same. It was not inferior to the Apple iPod at all.
Moreover, Mango-ME2 could perfectly support PCs, much better than the iPod for PCs. Even if users used the Apple system, they could get very good compatibility support.
As for the production cost, it could currently be controlled at 33% of the selling price of Apple products of the same size. It was said that the production cost of Apple iPod accounted for about 30% of the final selling price. This figure included research and development and production costs. As for the remaining 65%, part of it was net profit, accounting for about 20%. The remaining part was various soft costs, including various taxes, packaging logistics, distributor profits, and after-sales service costs. In addition, there was a little Apple brand premium.
Now, Apple had not really built up its brand, so the brand premium was relatively low. In the era of Apple, due to the increased brand premium, the production cost of Apple's products would be lower than the price of the iPod. However, because the technical content and software support behind Apple's mobile phone was far greater than that of the iPod, Apple's soft costs in research and development would also increase. However, the higher the sales volume, the more the R&D costs would be. Generally speaking, if one spent 100 million to develop a product and sold 10,000 units, the average R&D cost of each unit would be 10,000 yuan. However, if one sold 100 million units, the average R&D cost of each unit would be only one yuan.
Overall, the cost of Mango-ME2 was not lower than Apple's. In fact, because of the R&D costs, the cost was slightly higher than the iPod. Normally, such a product would have a weak point compared to its competitors. However, the most important thing about Li Mu was that he did not need to rely on Mango-ME2 to make money.
In other words, Li Mu could throw away the 15-20% net profit that Apple originally left for himself. In this way, he would immediately have a crushing advantage in terms of price. In addition, Li Mu was prepared to adopt the direct sales model, which could suppress the distributor's profits by another 5-10%. In this way, he could at least open up a 20-25% price gap with Apple's products.
Compared to the price in Hong Kong without tariffs, the iPod 3-30GB version, which had just been launched, was sold at about 4500HKD. If the Mango-ME2 was also sold in Hong Kong, Li Mu dared to sell it at 3600HKD.
Moreover, the cheaper Mango-ME2 was paired with the more useful YYtunes. It was also integrated into the entire YY social ecosystem and promotion resources. This was much more advantageous than Apple's iTunes and iPod.
The software and hardware products had been finalized. Li Mu formulated a strategic plan for the core management during the meeting. YYtunes would be officially released to users worldwide in two days, and Mango-ME2 would enter the active stocking stage. At the same time, they would cooperate with import and export trading companies around the world to complete the relevant import and export processes as soon as possible. They would strive to sell the products to developed countries within one to two months.
From Li Mu's point of view, even if Makino Technology were to lose hundreds of millions of US dollars, they would use Mango-ME2 to destroy Apple's revenue. If both iTunes and iPod failed, Apple's development would be delayed by at least a few years, and it would most likely be left with a permanent disability.
Therefore, in order to achieve the goal, Li Mu had an idea during the meeting. He said to Fang Xudong, "Xudong, ask your hardware team to send someone to Germany to look for Sennheisel and Bayer Dynamics, the two companies that specialize in producing headphones. Talk to them about the matters related to co-branded custom headphones."
"Co-branded custom headphones?" Fang Xudong said in surprise, "Do you mean that Mango and these two companies will co-brand custom headphones?"
"Yes." Li Mu nodded. Many people in China did not know much about the operation of "co-branding," but Fang Xudong, a high-end talent who had returned from overseas, was no stranger to it. Western brands often co-branded, and most of them were cross-industry collaborations. For example, a fashion brand and a sports brand jointly launched a sports shoe. Such things could often achieve greater value than 1 + 1.
Li Mu said, "We need to further improve the price-performance ratio of our products. The player itself is a product for listening to music. For most people, when they listen to music on an MP3, the main two factors that affect the sound quality are the decoding and the headphones. We already have acquired the processing technology for the decoding, but the performance of the headphones produced by Taiwan's technology is still a lot worse. The sound quality of these headphones, which cost less than 20 yuan, is barely passable. If the headphones can also be improved, the quality of the sound will be improved."
Fang Xudong asked, "So what you're saying is that we will work with these two companies to create custom headphones and sell them as the standard headphones for the Mang-ME2 to the consumers?"
Li Mu nodded and said, "We will only work with either Sennheisel or Bayer Dynamics. The premise of the cooperation is that we order more than a million sets of co-branded headphones from them. These million sets of co-branded headphones will only have one design, and this design must be co-designed with us. It cannot be highly similar to any of their current products. At the same time, it must have our Mango logo on it. Furthermore, they must give us a sufficiently low price and a sufficiently good quality control."
After that, Li Mu explained, "To be more specific, we now need to increase the cost of our headphones from less than 20 yuan to around 120 yuan. I believe that according to the normal profit margin of electronic products, a production cost of 120 yuan can sell the headphones for at least 500 yuan in the end market. Naturally, we can't expect these two headphone companies to produce the headphones for us at the cost price, so we need to guarantee a certain profit margin for them.
"In this case, we will pay Sennheisel 120 yuan per headphone, and at least the quality of Sennheisel's headphones on the market will be equivalent to the quality of the 300 to 350 yuan Sennheisel headphones on the market. Furthermore, we will promise them that all the co-branded headphones will only be sold together with the Mango-ME2 player, and will never be sold separately. Therefore, they can rest assured that we will use the products they give us at a low price to attack their market.
"Under normal circumstances, out of a million Mango-ME2 users, less than 5% of them will buy the branded headphones. Based on Sennheisel's market share of the entire headphone market, they can only get 20% of the 5%. In other words, out of a million Mango-ME2 users, only 10,000 people will buy Sennheisel's headphones. However, through our cooperation, these one million people will all buy Sennheisel's headphones. This will have a huge impact on Sennheisel's sales.
"In addition, we will also integrate the co-branded headphones into the promotion of Mango-ME2, and we will use the YY promotion method to release it to users around the world. This will have a strong pull effect on their brand. If they can see this, even if the profits from the co-branded headphones are negligible to them, they will still accept our cooperation for the global promotion opportunity."
Fang Xudong said, "Li Zong, if we equip each Mango-ME2 with a custom Sennheisel headphone, the cost of each machine will increase by an additional 100 yuan, and the price advantage will shrink again."
Li Mu waved his hand. "It doesn't matter. Consumers know how to calculate. They can calculate the value of the co-branded headphones, and then put it into the total price to calculate the price-performance ratio. Therefore, as long as one of these two companies agrees to produce the co-branded headphones for us at a low profit, although the additional 100 yuan will narrow the price gap between us and the iPod, it will widen the price-performance ratio gap between us and the iPod. This will play a more positive role in our path of sniping Apple."
Everyone present was amazed. In order to deal with a company with a market value of less than 10 billion US dollars, Li Mu actually made so many preparations. YY Ecology, YYtunes, Mango-ME2, Sennheisel, or Bayer Dynamics' co-branded headphones …
Li Mu was not competing in business. He was prepared to bury the bodies, prepare guns, bullets, and body bags. With so many preparations, it was no longer a normal fight. It was a fight that would not stop until the other party was dead!
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