Recently, Liu Chuanzhi was very busy with work. Lenovo's PC had won against Japan, South Korea, Europe and the US. But at this time, Taiwanese PC brands had started to enter the Hua Xia market.
At this time, Hua Xia's relationship with Taiwan had eased, and he had opened up the market to Taiwan. His original plan was to exchange goods and achieve economic integration, thereby assimilating Taiwan.
But they forgot that where Hua Xia is strong, Taiwan is also strong. Because Taiwan has some import advantages, many of their products are more competitive than Hua Xia's products.
This included computers, especially laptops, which suffered the greatest impact.
Among them, there were three brands, Asus, Acer, and Acer. Acer and Acer were founded by the same founder. Acer used to be a subsidiary of Acer, but it was later separated from Acer.
ASUS is the world's top motherboard supplier, accounting for more than a quarter of the world's motherboard market share. Ever since ASUS started manufacturing computers, its notebook sales have been increasing rapidly.
Acer and Acer were slightly worse, but they were still doing well. At least, they were not worse than Japanese and Korean manufacturers. Their notebook production and sales were also ranked among the top in the world.
In China, there is another PC brand called Shenzhou. This company is also manufacturing laptops, but their prices are very low. Their PC's prices are even lower than Lenovo's.
Lenovo was one of the top companies in the world because of its huge production and sales volume. But unexpectedly, China's production cost was even lower.
After studying it, Liu Chuanzhi finally understood why China's cost could be so low.
First of all, China was not a complete assembly. Piecing and assembling belonged to the bottom of the food chain. The profits were the lowest, and it was not easy to build a brand.
For example, Intel and AMD, they are in charge of R&D, design, and production. But the sales of their own brands are very average.
There are also mid-tier manufacturers like Toshiba, Samsung, etc. They produce the main components, and some of them develop the components, and the rest purchase the components.
There were also top hardware manufacturers like Nvidia that gave up the opportunity to make their own PCs and focused on their own products, which could be said to be the main components of computers.
Asustek is one of the upstream manufacturers and is one of the world's leading motherboard manufacturers. Their cost is about the same as Lenovo, and Liu Chuanzhi is not surprised.
On the other hand, China's technology should be much weaker. Even if they wanted to be a mid-level company, independently develop some of the main components, and then rely on their advantages to produce computers, they still needed to have products with advantages.
China did not have an advantage in any of the major computer components, nor did it have any outstanding products. Feng Yu does have some patents, but those patents are not worth anyone's attention. Feng Yu cannot be compared to Lenovo.
So how did China control the cost? One is that the wages of the workers in their factories are lower, which can reduce production costs.
Another reason was that they didn't have any direct stores. They were all franchised franchises. During the expansion period, the franchise fees were also very low, allowing their franchises to expand rapidly.
The boss of Shenzhou also gave his employees a bright future. He used Lenovo Group as a model and told them that their hard times will be over soon. In the future, everyone will own original shares, and after the company is listed, everyone will be at least a millionaire. That's why their employees' salaries are very low now, and their benefits are nothing compared to Lenovo Group.
As for getting listed, Liu Chuanzhi felt China will not be able to get an IPO in the near future. This is because their accounts do not meet the requirements to be listed. Also, China's IT companies are under strict scrutiny now, and almost no investors think China will be able to gain a foothold. They will be acquired by other manufacturers soon.
The last point, which Liu Chuanzhi found interesting, is China's geographical advantage. They are close to the ports, and they often import some leftover goods.
What is leftover goods? It means some factories had produced products, but due to some reasons, the orders were canceled, resulting in a backlog of products. Or, some factories' products did not reach the expected sales volume, resulting in a backlog of products. There are also some reserved "losses," which are reasonable in theory. But in reality, the losses are not that high.
There are many reasons for leftover goods, but it is undeniable that the factories will be eager to dispose of the leftover goods. On one hand, they can clear their inventory to prevent the warehouse from being overstocked, and prevent these materials from being wasted. On the other hand, selling the leftover goods is also a source of income. Although this income is very low, it is not part of the plan.
But now, China not only bought some spare parts to assemble their own notebooks, they also had another way, which was to import electronic components from the leftover goods, and then produce the parts themselves to assemble the computers. This was China's so-called independent research and development, and they could barely be considered to be in the second echelon.
Among the leftover goods, the quality of the products cannot be effectively controlled. That's why China's computers often break down, and the repair rate is very high. But the cost can be reduced by 40%!
What is the concept of 40%? Now, the profits of notebooks are only slightly more than 10%, and the profits of desktops are less than 8%. Furthermore, the profits are decreasing gradually. This is because there are more and more manufacturers, and more companies start to lower their selling prices. The cost of marketing, production, sales, etc. is increasing rapidly.
The cost of the most common notebook in China is 20% lower than Lenovo, and that's why China is so competitive. Now, the main selling point of the other companies is cheap!
You are selling a 10,000 RMB laptop, and I am selling it for 8,000 RMB or even 7,000 RMB. The specifications are still the same. How will the consumers choose?
Even if the after-sales service is not good, how much can it cost to repair a laptop? Furthermore, although the quality is slightly inferior, the repair rate is not high. This is only high compared to other brands of notebooks. It is not even higher than some home appliances.
They also know that many users prefer cheap products. After all, this is still a notebook and not a desktop. It looks more high-end.
So, China's notebook industry entered the stage of competition. Lenovo is mainly targeting the European, Japanese, and Korean manufacturers and neglected other brands. This allowed them to expand rapidly and snatch away a lot of Lenovo Group's market share.
In the desktop market, there are more and more assembled computers, especially those merchants in the PC city. The computers they give to their customers are cheaper than the computers in Lenovo's retail outlets.
They are also using some leftover goods to sell. Anyway, the customers will not be able to tell, and if there are any problems, they can just provide a warranty.
The notebook and desktop market is facing challenges at the same time, and Lenovo Group is in a passive position. They are actively expanding into the European and US markets. They cannot let their base camp be conquered before they even take over those markets.
Coincidentally, when Feng Yu mentioned the tablet, he reminded Lenovo. Why not introduce a notebook with simpler functions? It is cheaper, and with Lenovo's brand and marketing, it will surely sell well.
But Lenovo and Feng Yu have different opinions on how to market this product.
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