Qualcomm had been having a hard time recently.
The company's market situation could be described as "perilous" and "perilous".
It could be said that it was on the edge of "life and death".
From last year to this year, Qualcomm had laid off three times in a year. 80% of the research and development staff had been laid off to save personnel expenses.
The company's main executives had taken the initiative to reduce their salaries to only 20% of their previous salaries.
There were also a variety of other cost-saving measures to desperately save money and avoid expanding losses.
Even so.
Although they had done all they could, Qualcomm's net loss in this year was still as high as 3 billion US dollars!
Qualcomm, which had been profitable for many years, had experienced such a big loss for the first time.
How was this possible?
Qualcomm held tens of thousands of communication technology patents in its hands. It could make a lot of money every year just by collecting patent fees. How could it lose money by lying down and making a lot of money?
Take Nokia for example. The company had been up and down for more than 30 years. It had encountered many crises and been acquired and sold several times, but it did not go bankrupt. Instead, it relied on patent fees to revive itself and occupy a place in the market.
Therefore, as long as the people on this planet still needed communication functions, the relevant communication companies would not go bankrupt. It would be very difficult to go bankrupt!
The same was true for Qualcomm.
But Qualcomm also had to make money!
Without enough profits, how could Qualcomm's executives and employees enjoy material things?
Without enough profits, how could follow-up research and development work be carried out … Any patent did not fall from the sky, but was created with money!
However, not only did Qualcomm not have money, but it had also suffered huge losses.
What was the reason?
In the office.
Zheng Junming, President of Qualcomm's Z country, reported to President Christian Amon, "Mr. Amon, the company's revenue in Z country this year has plummeted by 70% compared to last year. It is expected that it will be difficult to exceed 30 billion yuan."
"30 billion yuan?"
Christian Amon was taken aback and frowned, "Why is our performance so bad?"
He slapped his forehead hard, spread his hands and complained to Zheng Junming, "Peter, I listened to your advice and moved the company's headquarters to Z country. 70% of the executives also came to Z country. They worked hard to adapt to the environment here and even learned a lot of Z language, but why? Why do Z country's consumers still not like us and choose to abandon us?
"What did we do wrong to deserve such treatment from them?"
Christian Amon looked as if he had suffered a great blow. He was extremely disappointed and depressed. He valued the Z country's market very much. He had even left his hometown and come to this mysterious Eastern country. He had repeatedly taken the initiative to express his goodwill and showed enough sincerity in order to achieve commercial success.
What was the result?
Reality poured a bucket of cold water on him. Qualcomm was losing ground in the Z country's market, and its revenue had plummeted by 70% compared to last year.
This filled his heart with a sense of defeat.
The thought of withdrawing from the Z country's market popped up, but it was immediately dispelled.
Qualcomm could not afford to leave the Z country's market.
Especially after entering the 5G era, only in Z country could Qualcomm's 5G chips achieve better sales and collect more patent fees.
The reason was that Z country was the only country that had truly stepped into the 5G era! Only Z country was able to come up with trillions of investments to set up 10 million 5G base stations throughout the country, covering all cities.
As for other countries, due to cost, population density, technical strength, and so on, the density of 5G base stations was not only lower than Z country, but the usage fees for 5G services were also higher, resulting in only a small range of coverage and difficult to fully spread.
One of the most intuitive data was that the total number of 5G base stations in other countries and regions around the world was less than 8 million, excluding Z country.
This made it difficult for Qualcomm's 5G chips to sell at all, except Z country. It was difficult for most users to experience the speed and convenience brought by 5G.
Of course, another reason was that Qualcomm's percentage of patent fees was too high. For traditional 4G phones, Qualcomm collected 3.5% of patent fees, and for 5G phones, it had to add another 5%, for a total patent licensing fee of 8.5%.
This meant that for a phone priced at 3,000 yuan, Qualcomm had to take 255 yuan … The extra part was naturally borne by the consumers.
However, due to the incomplete 5G signal coverage, the user experience was not much different from 4G phones.
The 5G package was more expensive.
Therefore, after thinking about it, it was better to continue using 4G phones.
Therefore, Qualcomm's 5G chips could only achieve a certain sales volume in the Z country's market.
In addition, the Snapdragon CPU had a good reputation in the Z country's market and was welcomed by consumers. At one time, the Z country's revenue accounted for 75% of Qualcomm's global revenue.
This was also why, after the "backdoor incident" of the Android system broke out, Qualcomm was under severe criticism and was willing to move its headquarters to Z country in order to win the trust of Z country's consumers.
But even if Qualcomm had done so much, in the face of a 70% drop in revenue, Qualcomm's executives could not help but feel helpless and depressed.
"Mr. Amon, this is not a problem with our market strategy," Zheng Junming comforted him and analyzed the situation.
"The main reason for the decline in the company's revenue is that the performance and price of the company's products have not been favored and recognized by consumers, causing hardware manufacturers to choose to cooperate with Hua Yao or Xing Hai Technologies.
Our latest 5-nanometer process, the Snapdragon 8550, only has a running score of 610,000, which is not as good as the SX-2000's 780,000 and Hua Yao's Kirin 1220's running score of 650,000. The performance of high-end SoCs is not as good as them.
There is a gap in performance. As long as the gap is not too big, consumers can accept it. But because we are the OEM of Mossy Electrics, the manufacturing cost of our chips is higher, so the price is higher.
In addition to the SoCs, we also charge 5% of the communication patent fee for each mobile phone. This ratio is not very high. Based on the current high-end flagship model's price of more than 2,000 dollars, we only need to add about 100 dollars for each mobile phone. "
The sharp drop in mobile phone prices was also one of the reasons for the decline in Qualcomm's revenue.
"But Hua Yao does not charge licensing fees for 5G patents. They also do not charge additional patent fees for the 5G baseband they sell. This means that the cost of each mobile phone equipped with Qualcomm chips is about 100 to 200 dollars higher. Of course, hardware manufacturers will abandon us.
"Mr. Amon, we need to adjust our business strategy! If this continues, our remaining market share will be snatched by Hua Yao and Xing Hai Technologies. We will completely lose the Z country's market. "
Zheng Junming voiced out the opinion that had been hidden in his heart for a long time.
Christian Amon shook his head. Adjustment? How to adjust? Qualcomm was only a company specializing in communication technology. Its only means of profit were selling SoCs and collecting patent fees. It could not compare to Hua Yao, which did both software and hardware. It could not compare to Xing Hai Technologies, which had countless core technologies.
Only by being a patent troll could Qualcomm survive.
Of course, Zheng Junming also understood this point. So, he made another suggestion, which made CEO Christian Amon's eyes light up.
"Yes, Xing Hai Technologies has advanced technologies such as the Work Assistant and the Virtual Factory. But in the field of communication, it is restricted by Hua Yao. There are only a few communication patents on hand. If we cooperate with Xing Hai Technologies and join forces, we can definitely improve Qualcomm's current situation!"
Christian Amon immediately asked Zheng Junming to contact Ling Dong Jun of Xing Hai Technologies and convey a signal of desire for cooperation.
…
Xing Hai Building.
In the conference room.
After listening to Ling Dong Jun's description of the situation, Chen Jin was slightly stunned. Then, he smiled and said, "Are you talking about the Qualcomm that is known as' Z Emperor's Conscience, Righteous Destruction Fruit? '"
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