boyutpedia Chapter 49 How Much Should a Smartphone Cost?
Chapter 49 How Much Should a Smartphone Cost?
"Then, for the high-end configuration, we'll do as Mr. Li suggested and upgrade the camera to a 500-megapixel lens. The same memory version will start at 299 yuan, and we can also offer some ultra-large memory versions, raising the price to over 300 US dollars."
"The castration itself is not a big problem."
We've also prepared some backup plans, so we can be ready at any time. But isn't this level of differentiation a bit too small...?
"Removing one shot is definitely not enough; now everyone will choose the lower-spec version."
"How about we cut down the mid-frame and the back cover as well?"
"What else can be castrated? It's already made of plastic. If you want to castrate it further, are you going to replace it with something transparent?"
The meeting room was abuzz with debate about how to perform the castration procedure or what price to set, with everyone having their own reasons.
After discussing for a while, Shen Fei looked at Adebayor beside him.
"Adebayor, you're on the front lines in Africa, you know the local market better than we do, tell us about it."
Adebayor stood up and bowed deeply to Shen Fei.
Everyone present was stunned for a moment.
They knew there was a very capable market manager in Africa who was also a quick learner, but they didn't expect him to learn this method so quickly.
As they looked each other over, Adebayor wiped away his tears and uttered his heartfelt words:
"Mr. Shen, thank you so much. Without you, I might still be repairing my phone at the Bal Market right now..."
[Ding! Congratulations, host! Deadpool +1. Loyalty System activated.]
Shen Fei's eyes widened instantly, and he began to carefully study the loyalty system in front of him.
Looking at everyone, Huang Tianya was undoubtedly 100% loyal, a die-hard strategist.
The loyalty of Li Qing, Chen Hai, and other elderly people who went to Africa with him to explore the market was basically 95%, which is an absolute level of loyalty.
Liu Zhihong and others were also able to maintain a success rate of over 90%...
It's safe to say that at least 90% of the participants in this meeting room were present. After some research and getting a general idea, Shen Fei closed the system interface and continued the meeting.
Looking at Adebayor, who was still giving his speech, he waved his hand and said, "I know what you mean, let's get down to business."
"Yes."
Adebayor immediately pulled out his research report: "Over the past period of time, our African branch has also conducted several surveys in Nigeria, Kenya, Ghana, and Ethiopia."
Primarily targeting our high-end clients, we showed them several smartphones and asked them how much they were willing to pay for such a novel experience.
Relevant survey data also appeared on the projection screen.
Nigeria: Average price target $400.
Kenya: $362
Ghana: 270 US dollars
Ethiopia: "195 US dollars."
"Why is there such a big difference?" Liu Fang, the supply chain manager, put down her teacup.
"Because of the level of economic development," Adebayor explained.
"Nigeria is a fairly well-developed country in Africa, with a large middle class. This is mainly because Samsung and Nokia have invested in the country, and users are aware of high-end phones; they know that you get what you pay for."
In contrast, in Ethiopia, most people still use feature phones and are unfamiliar with smartphones. Their incomes are also low, so while they may be tempted, they cannot afford them.
Everyone in the meeting room immediately nodded in understanding, and then began a new round of discussion.
After a brief discussion, Adebayo continued, "Actually, during our investigation, we discovered some rather interesting data."
When I said that if Transsion were to create a similar smartphone, users' perceived value generally increased by 10-20%.
They said that Transsion phones are worth the higher price because they are durable, have good signal, take clear photos, and have good after-sales service.
These high-end clients have already developed a certain level of recognition for our brand.
After Adebayor finished speaking, the crowd that had been discussing immediately fell silent.
At that moment... a very bold conclusion immediately arose in everyone's mind.
Brand loyalty.
While they were silently reciting it in their hearts, Shen Fei had already given the answer.
"We built brand loyalty in the African market in less than a year, which is fantastic news."
"Yes," Adebayo nodded. "So my suggestion is a flat price of $349."
This price is very competitive in Nigeria, and might even be a bit low for the target audience. In less developed regions like Ghana and Ethiopia, it might be more expensive, but the brand premium would still allow it to sell.
"This profit is indeed acceptable," the CFO reiterated.
"Actually, this price is not expensive. Compared to Nokia and Apple, it's much more reasonable."
"This price is already considered low profit margin with high volume," Adebayor said firmly. "Besides, S1's goal isn't to make money, it's to capture the market."
"As long as we capture more than 30% of the smartphone market in Africa, subsequent software services, app revenue sharing, accessory sales... all become profits."
Just as everyone was debating, Huang Tianya also presented a crucial piece of data.
"When we invested in them, we also did a detailed calculation. The African smartphone market will grow from the current hundreds of thousands of units per year to 3000 million units."
If we plan ahead now, we can achieve annual sales in the tens of millions. What would that be multiplied by a gross profit margin of over 50% and tens of millions in sales?
The sound of computer keys clicking filled the conference room. Soon, the CFO looked up, his eyes changing to a very "wise" look.
"If we sell 1000 million units a year, with a price of $349, the gross profit would be... $15 billion worth of profit."
"That's definitely possible, and as we scale up, our costs will decrease," Chen Hai quickly realized, and then he said excitedly.
"Once they mass-produce their own chips, the cost will drop even further. At that point, the gross profit margin might be more than 60%."
The group didn't consider their competitors' thoughts at all, not because they were confident, but because of the unique advantages of their photography algorithms and positive user feedback.
You are welcome to come in, and I will always welcome you via voice message.
But they'd better be well-prepared, or they'll become the next Bird, unable to sell their phones and repeatedly getting ripped off by the locals.
After a brief discussion about their future plans, everyone's faces beamed with uncontrollable smiles.
Shen Fei quickly patted the seal, bringing everyone back to reality: "Any further objections?"
No one spoke in the meeting room...