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Chapter 560, 0548: [Deceiving Everyone]

The decision to launch HarmonyOS phones overseas was made quickly because ByteDance holds a controlling stake in HarmonyOS Technology.

However, the situation is different when HarmonyOS goes global, because HarmonyOS is managed by the foundation.

Members pay an annual fee to maintain and update the HarmonyOS system. Why should anyone care if extra money is spent on development in Europe and America?
Everyone knows that if this succeeds, it will benefit all manufacturers in the HarmonyOS camp. But what if it fails? What if it takes several years to see results?
Moreover, the initial members of the HarmonyOS camp have already withdrawn due to the failure of their mobile phone businesses. Examples include Panda Mobile and Changhong Mobile. The mobile phone businesses of manufacturers like TCL are barely surviving, so their withdrawal was only a matter of time.

Besides hardware manufacturers, there are also suppliers like Qualcomm.

For example, the Japanese display company that was just established this year joined the HarmonyOS Foundation simply to promote its own mobile phone screens. Whether your HarmonyOS system passes through customs or not is none of their business.

Chen Guiliang initiated a foundation meeting, and after exchanging opinions with the main members, he was too lazy to go through the voting process.

Because nobody supports it!

All manufacturers in the HarmonyOS camp support the overseas expansion of the HarmonyOS system. However, this is only moral support; it's impossible for them to spend money.

Therefore, Chen Guiliang had to pay for the land reclamation himself.

But the HarmonyOS system belongs to everyone. Once Chen Guiliang invests money and achieves results, these guys will immediately follow suit and share the profits without spending a penny.

That's just how the world is.

Chen Guiliang, relying on the HarmonyOS ecosystem, reaped the benefits of the app ecosystem and established his position in the industry. If he wants to continue developing, he needs to invest real money. Otherwise, he can only drift along with the rest of the team.

Other manufacturers can really just coast along, and if things get tough, they can simply switch sides.

The most typical examples are Huawei, ZTE, and Coolpad, which have both HarmonyOS and Android phones, and have been preparing for both scenarios for a long time.

Coolpad initially joined the Android camp, but after discovering the popularity of HarmonyOS in China, it eventually switched to the HarmonyOS camp.

In a private conversation, Wu Ying told Chen Guiliang, "I really want to support you, but my Xingyao mobile phone sales are declining. I'm having a hard time even in the domestic market, so I really don't have the energy or financial resources to expand into overseas markets."

“I understand,” Chen Guiliang said. “As Spider-Man said, with great power comes great responsibility. Now that HarmonyOS phones are selling well, it’s only natural that I should contribute the money.”

Wu Ying asked, "HarmonyOS Technology is now a listed company, so this won't have any impact, right?"

Chen Guiliang said, "The funds are not used by the foundation. Cooperation with foreign companies is also unrelated to the foundation. It is purely private business cooperation."

"Damn it, the mobile phone market is getting more and more competitive. I heard that Zhou Hongwei even wants to come and make 360 ​​phones," Wu Ying began to complain.

Chen Guiliang laughed and said, "It seems he's planning to cooperate with Coolpad."

Wu Ying said, "Coolpad has been too strong this year, but I don't think this company can stay successful forever."

Coolpad primarily targets carrier channels, with over 90% of its mobile phone sales coming from these channels.

Why should telecom operators cooperate with Coolpad?

Of course, we're offering crazy discounts!
For every phone Coolpad sells, the carrier earns more than Coolpad itself.

By offering such concessions, Coolpad has not only won over the three major domestic telecom operators, but also European and American operators.

In August of this year, Coolpad partnered with a US carrier to sell Android phones. This same month, Coolpad also partnered with a European carrier to sell Android phones.

If we only consider sales in the fourth quarter of this year, Coolpad phones have surpassed Huawei, ZTE, and Lenovo, and their domestic market share (for smartphones) is second only to Samsung and HarmonyOS.

……

"Twitter responded quickly, and we already have some initial information," Ye Peng said.

Chen Guiliang was slightly surprised: "So fast?"

Ye Peng said, "Twitter is currently unwilling to formally discuss cooperation. They have put forward two requirements: First, there must be more than 50 phones equipped with the HarmonyOS system shipped in the United States. Second, the transaction fee for the HarmonyOS app store must be reduced to below 15%. Only if these two points are met will they be willing to continue negotiations."

Chen Guiliang said, "We can agree to anything. It's just about the shipment volume, not the sales volume. We'll directly cooperate with US carriers to offer discounts on low-end phones."

"So the current challenge is how to persuade US carriers to sell phones running HarmonyOS. Simply offering discounts won't be enough," Ye Peng said.

Chen Guiliang said, "Then we'll offer huge discounts, even at a loss, and use this as a good opportunity to test the waters in the US market!"

Without the burden of massive amounts of code, the development costs for major international companies to create apps were actually not high at this time.

Take Twitter for example. Not only are there Google and Apple versions, but there are also Symbian, Blackberry, and Microsoft versions.

Twitter would be willing to develop another HarmonyOS version as long as the capabilities of HarmonyOS phones are demonstrated even slightly.

At that time, European and American users were not deeply integrated with Google mobile services.

The most obvious example is Apple abandoning Google Maps, resulting in Apple Maps being a complete mess. Even without map software, iPhone sales weren't significantly affected.

Many app developers nowadays even deliberately avoid listing on Google and Apple App Stores, instead opting for third-party platforms to circumvent the 30% Android and Apple tax.

Ye Peng said, "I believe the HarmonyOS app store should be free. It shouldn't even take a 1% cut, in order to attract European and American manufacturers to create HarmonyOS-based apps!"

"It'll be free," Chen Guiliang said.

This so-called HarmonyOS App Store is not an app store belonging to the HarmonyOS camp, but rather belongs exclusively to HarmonyOS Technology.

Other phones in the HarmonyOS camp also have their own app stores, such as Xiaomi App Store, Huawei App Store, and so on.

Chen Guiliang said, "Those who came to the meeting this time are completely incapable of making decisions, so I personally flew there to persuade their boss."

……

Shenzhen. Chen Guiliang first went to see General Manager Shi of ZTE.

Like Chen Guiliang, Mr. Shi also received the CCTV Economic Person of the Year award last year. We had a pleasant chat and exchanged phone numbers.

"Please have a seat, Mr. Chen," Mr. Shi greeted him warmly.

Chen Guiliang said, "I apologize for the intrusion and for disturbing you."

Mr. Shi smiled and said, "Mr. Chen is now a business leader and the newly crowned richest man in China. We are delighted that you can come to ZTE as a guest, and we can also learn from you about making mobile phones."

ZTE is in a bad situation this year, experiencing its first loss since its listing.

The main reason is competition with Huawei. Both sides were drastically lowering their prices to win projects. ZTE was particularly aggressive in its price-cutting, resulting in winning projects but not being able to increase profits, and even potentially incurring losses.

Furthermore, the US investigation into ZTE's project in Persia has severely hampered ZTE's overseas expansion.

ZTE's mobile phone business is also engaging in vicious price competition.

ZTE shipped 6500 million mobile phones this year, of which 3500 million were smartphones. Moreover, the majority of these sales came from overseas markets, not the Chinese market.

After chatting for a while, Chen Guiliang asked, "Does ZTE intend to equip its overseas versions of mobile phones with the HarmonyOS operating system?"

Mr. Shi shook his head: "Overseas competition is extremely fierce, and we have already squeezed our profits to the minimum. If we were to use the HarmonyOS system, foreign operators would not cooperate."

“ZTE mainly sells low-end phones in Europe and America, and many apps are simply unusable. Only a few basic apps are needed to meet user needs,” Chen Guiliang said. “Could we join forces and negotiate with major companies such as Facebook and Twitter to ask them to develop HarmonyOS-based apps? If we can reach an agreement, we can convince the operators.”

Mr. Shi couldn't refuse outright, but he also couldn't agree immediately, so he said ambiguously, "We can try to talk about it."

Chen Guiliang said, "I want to bring Huawei and Coolpad together for discussions."

Huawei and Coolpad are both competitors of ZTE, especially Huawei, which is a mortal enemy.

Now Chen Guiliang has a wild idea: he actually wants to drag a group of competitors who are capable of fighting tooth and nail together to go and negotiate with the Americans.

Mr. Shi's expression was subtle, and he smiled, "Mr. Chen is quite imaginative."

Chen Guiliang said, "There are some things I want to try. If it's just for making money, I can just abandon the HarmonyOS system and switch to Android. Does that make sense? Anyway, the HarmonyOS phone brand has already been established, so it doesn't matter what system I switch to."

Mr. Shi did not respond.

Chen Guiliang said, "This is the last chance for our domestic mobile phone system. The longer we wait, the more complex the apps will become, the higher the cost of cross-system development will be, and the deeper users will be bound to Google mobile services. By then, there will be no hope of ever getting ahead."

Mr. Shi suddenly said, "If you can convince Huawei, then I can agree."

……

Huawei's headquarters is not far away, and Chen Guiliang had already made an appointment with Mr. Ren in advance.

After exchanging a few pleasantries, Chen Guiliang said, "Congratulations, Mr. Ren, HiSilicon has successfully developed the first quad-core mobile phone chip in mainland China this year."

Mr. Ren was quite proud of the HiSilicon chip, smiling as he said, "Congratulations to HarmonyOS on developing the Xirang power chip. We have already tested the Xirang chip, and it does indeed reduce power consumption and heat generation. I wonder when it will be available for external supply?"

"Once production capacity expands, in addition to our own use, we will prioritize supplying to our partners in the HarmonyOS camp," Chen Guiliang said, not giving a definitive answer.

The two sides then entered a mutual praise mode.

After praising for a while, Chen Guiliang asked, "President Ren, have you heard that the United States has launched an investigation into ZTE's Persia project?"

Mr. Ren nodded: "This is a major event in the industry."

Chen Guiliang said, "In the past two years, trade frictions between China and the United States have continued to escalate. With the rise of the Chinese economy and the decline of the US economy, I estimate that it will eventually develop into a trade war. At that time, not only ZTE will be investigated, but Huawei may also be punished."

"Huawei has always followed the rules. The United States can't investigate us without any reason, can it?" Ren said.

Chen Guiliang asked with a smile, "Why is it impossible? If our European and American counterparts can't beat Huawei, won't they lobby the US president?"

Chen Guiliang sat up abruptly: "President Ren, do you still remember Alcatel? At its peak, it was number one in everything—switching, broadband access, optical cross-connects… A few years ago, a French executive of such a French company was suddenly arrested in the United States for allegedly bribing a Costa Rican telecommunications giant. Even if there really was bribery, what business is it of those Americans if a Frenchman bribes a Costa Rican company? But this man was not only arrested in the United States, but also sentenced to 30 months by an American judge."

Mr. Ren stopped arguing.

Chen Guiliang said, "I don't understand those basic telecommunications equipment, but I work in the mobile phone industry, so I understand the mobile phone industry. Huawei has developed the first quad-core mobile phone CPU in mainland China, so I'm afraid they won't just keep selling low-end phones, right? This year, Huawei mobile phones have tried to break into the high-end market, and although they failed, I believe that Mr. Ren will never give up."

Mr. Ren smiled and said, "Mr. Chen, just say what you want to say. There's no need to beat around the bush."

Chen Guiliang said, "Whether it's communication equipment or mobile phone chips, as Huawei's products become more and more high-end and its market share increases, it will inevitably be targeted by the United States. If a trade war breaks out between China and the United States, Huawei will be the first to be affected."

"President Chen overestimates us," President Ren said.

Chen Guiliang said, "I plan to sell phones running HarmonyOS in the US, and I also want to work with Huawei, ZTE, and Coolpad to persuade European and American manufacturers to create HarmonyOS-based apps. Mr. Ren, are you interested?"

Ren Zhengfei remained noncommittal: "With such a high-profile move, it's clear the HarmonyOS camp is going global. Will the Americans agree to cooperate?"

Chen Guiliang said, "The Android camp has developed too fast, while Symbian, Microsoft, and BlackBerry systems have declined too quickly. Large companies like Twitter don't actually want to see this situation. Too many mobile phone systems are inconvenient for them. But too few mobile phone systems are also a threat to them, greatly weakening their negotiating and bargaining power. Three systems are just right, and they actually welcome the emergence of new mobile phone systems."

Mr. Ren thought for a full half minute: "Did ZTE agree?"

Chen Guiliang said, "I agree."

Mr. Ren did not reply immediately, but said, "I need to think about it some more."

“Of course.” Chen Guiliang stood up and shook hands. He still needed to go see the CEO of Coolpad and tell him that Huawei and ZTE had already agreed.

(End of this chapter)