Chapter 245

Other brand companies could enter the Little Smart market and get a piece of the pie, but the tribute money that had to be paid to Dongling High-Tech could not be a single cent less!

Qualcomm, relying solely on patents, authorized a 5% patent fee to 3G and 4G brand mobile phone companies, meaning that no matter how much the device sold for, they had to charge based on the price of the entire machine.

In addition to patents, plus the cost of selling chips, it was equivalent to 70% of the profit of every device sold by a domestic brand being siphoned away by Qualcomm, as well as overseas companies led by Qualcomm for cameras, screens, sensors, and the like.

The more devices domestic mobile phone brand companies sold, the more patent fees they paid to that group of companies like Qualcomm, and the more chips they needed to purchase from overseas. It was equivalent to domestic mobile phones working for companies like America, and the money earned was all taken away by America.

This was also why, when the Chrysanthemum Factory began to challenge Qualcomm in 4G technology, developed 5G technology, and self-developed 5G chips, America reacted so strongly. It was because the pyramid model constructed by America, standing at the very top and harvesting the leeks of the entire mobile phone industry, had developed a crack, making America somewhat hysterical.

Placed in the current mobile phone industry, before Dongling High-Tech launched the Little Smart mobile phone, it was foreign companies like Motorola that were harvesting the domestic mobile phone industry.

In the future, it might still be harvested by Qualcomm, Nokia, Motorola, Apple, etc. Rather than being harvested by these foreign companies, it was better to let Dongling High-Tech benefit. At least Dongling High-Tech did things much more decently than those companies above. Besides, being harvested by Dongling High-Tech meant the meat stayed in the domestic pot.

"As long as they pay patent fees to Dongling High-Tech and purchase radio frequency chips, mobile phone motherboards, mobile phone screens, etc., from Dongling High-Tech, allowing Dongling High-Tech to siphon off 19% of the profit, then Dongling High-Tech's entire component supply chain can be opened to those brand companies!

If necessary, Dongling High-Tech can also provide customized services for these companies, helping them design and develop products. Dongling High-Tech's sales channels and promotional channels can also be opened to them, of course, on the premise that sufficient profit must be delivered to Dongling High-Tech!"

Li Dongling said that other brands could enter the PHS market, but they had to pay. As long as the money was sufficient, Dongling High-Tech's component supply chain could be opened to them. If necessary, Dongling High-Tech's design team could also help directly design the mobile phone's appearance and functions, Dongxin Semiconductor could customize chips for them, Focus Media could promote for them, and the sales stores and after-sales services of Dongling High-Tech and Feiyan Technology could all provide support for this, provided the price was right!

The domestic mobile phone market was still too weak and far from reaching the level of the world's largest mobile phone market; it needed time to cultivate. Rather than letting other foreign mobile phone brands wreak havoc, it was better to let Little Smart and companies authorized by Little Smart occupy it. Later on, brands under Dongling High-Tech could also take over the Little Smart market!

Another point was that other brands purchasing patents and components from Dongling High-Tech could also provide Dongling High-Tech with enough funding to research new mobile phone technologies. Dongxin Semiconductor could obtain funding to continuously research new generations of chips.

Ren Yuefeng and Hu Zixian both gasped in shock. If they really played like this, then no matter how the Little Smart mobile phone industry went or how many brands popped up, the lion's share would likely be earned by Dongling High-Tech, and it might even turn out that other PHS mobile phone companies would all have to work for Dongling High-Tech.

However, no matter how ruthlessly Dongling High-Tech siphoned profits, as long as Dongling High-Tech released these conditions, it was estimated that there would be plenty of companies coming to their door, begging to cooperate with Dongling High-Tech.

Earning a little is better than earning nothing. Cooperating with Dongling High-Tech and purchasing components from Dongling High-Tech meant they could directly assemble a white-label Little Smart. Even if the lion's share was siphoned away by Dongling High-Tech, the white-label mobile phone could still earn quite a bit.

Haven't you seen the later automotive industry? Even with the Chrysanthemum Factory charging such high fees, there were still many manufacturers who would rather risk huge losses than choose to cooperate with the Chrysanthemum Factory.

Even if selling cars lost money, with a big mountain to lean on, the stock price would soar. Losing tens or hundreds of billions selling cars, but with the stock price rising, they would earn it back several times over. For major shareholders, losing money selling cars was nothing at all; cashing out a wave of equity was more than enough to earn it back.

Furthermore, many investment companies and institutions even liked this kind of company that lost money in the early stages but had huge future potential.

Because the stock market is all about expectations. Think about it: now a company losing tens of billions has car sales that have already surpassed a host of old-school automotive giants, and its market value or valuation has exceeded a hundred billion. When it starts to make a profit, won't the stock price fly to the sky? Having the market value multiply several times over isn't that an easy thing? Isn't this how the hype is built? Won't the leeks be howling as they rush in to take over the shares?

Conversely, companies in industries like banks, traditional banks, aviation, and infrastructure have performance that can be estimated. No matter how much money they make, they can't tell stories or hype. Even if the stock price of such stocks is pulled up, they can't attract leeks to take over, so naturally, they aren't favored by those institutions.

After all, of those who can enter the stock market, how many can endure loneliness? Most are still gamblers with a mentality of wanting to get rich overnight. If they could really hold onto stocks and wait for the stock price to rise or for dividends, it wouldn't be as safe as putting money in the bank...

As long as they cooperate with Dongling High-Tech, they have the opportunity to become a leader in the mobile phone industry, obtain large amounts of revenue, and possibly even complete an IPO. Under this temptation, there would definitely be a large number of companies willing to cooperate with Dongling High-Tech, even if Dongling High-Tech's conditions were very harsh.

"If Dongling High-Tech is willing to provide key components like PHS patents, technology, chips, and motherboards, I think no company that wants to enter this line of work can refuse!" Ren Yuefeng said, exhaling a breath of murky air.

Li Dongling looked at Ren Yuefeng and said, "Domestic mobile phone market users need to be cultivated. If Little Smart guards the threshold of the PHS mobile phone industry and doesn't let other brands enter, then sooner or later, counterfeit machines will become a disaster!

Rather than handing the market over to Little Smart counterfeit mobile phones and foreign mobile phones, it is better to allow other brands to enter this industry with conditions.

Of course, in the overseas PHS market, Dongling High-Tech absolutely does not allow other brands to ruin the market. If domestic PHS mobile phones want to export, they must obtain Dongling High-Tech's approval. Otherwise, we will let them know what 'Hanxi Pizza Hut' means!"

When saying that last sentence, Li Dongling's expression was very cold. Dongling High-Tech had set the rules of the game. Those who were unwilling to follow these rules could just exit. Those who wanted to play but were unwilling to follow the rules needed to be taught by Dongling High-Tech why flowers are so red.

Sometimes, you can take a step back, but sometimes, you cannot take even half a step back. If you take a step back, the other party will push their luck. When necessary, you need to show your fangs and give those opponents a proper warning; otherwise, everyone will ride on your head.

Up to now, Dongling High-Tech has been competing with all kinds of opponents, whether domestic or foreign, according to means within the rules, and has not used means outside the rules. But that doesn't mean Dongling High-Tech doesn't have them, especially the large amount of foreign exchange that Dongling High-Tech earns every month. Once something goes wrong with this, no one in the country would be able to escape unscathed!

"I understand. I will gradually release the news!"

Ren Yuefeng said that even if other brands are allowed to enter the PHS mobile phone industry, it must be done with strategy. They need to set up one or two typical companies that have eaten meat by working for Dongling High-Tech, so that other brands will rush to send money to Dongling High-Tech.

"Li Zong, over at the fishing rod factory, we have currently found a suitable target. It is a fishing gear company in Laizhou called Guangwei. Although they don't have carbon fiber fishing rod technology, their sales in the domestic fishing gear market are quite good, second only to foreign fishing gear companies!"

After Ren Yuefeng, Hu Zixian spoke to Li Dongling and handed a document to Li Dongling.

(End of chapter)