Tech startup: I really do make mobile phones!

Chapter 12 New Era Leaders

Now that Chen Mo has been reborn, he has obtained a cutting-edge mobile phone R&D system, giving him the opportunity to change the configuration of the Orange 1 phone.

Naturally, I should seize this opportunity to make up for my past regrets.

Therefore, the brand-new Orange 1st generation is destined not to go back to the old path of its predecessor, but to board the ship to the new era of smartphones, and even become a pioneer and trailblazer.

Under Zhao Tiezhu's shocked gaze, Chen Mo, without hesitation, began to quickly recite the modified and upgraded configuration of the Orange 1st generation.

1. Core hardware changes:
Screen – Upgraded from a 3.5-inch TFT resistive screen (480×320 resolution) to a 3.5-inch capacitive touchscreen.

Chen Mo's specific solution directly referenced Lao Wang's knock-off Orange 4, adopting a G+F structure (single-layer glass + resistive film), theoretically supporting 3-point touch (actually 1-point precise touch) resolution: 480×320 (HVGA), 165PPI.

Old Wang's screen supplier, Chen Mo, who had disassembled the device, also remembered that it was a small touch screen factory in Bao'an District, Shenzhen.

It is said that this small-to-medium-sized touch panel manufacturer mainly undertakes leftover orders from large manufacturers and uses the FPC1020 touch panel chip from Taiwan Duntai.

The cost is approximately 30 yuan, which is 12 yuan more than the original solution using a resistive touchscreen.

Although the capacitive screen used by Chen Mo is not as good as the Retina display of the iPhone 4 for multi-touch precision, it at least supports single-point precision touch with a finger, eliminating the pain point of resistive screens that require fingernails or styluses to operate.

This offers a faster touch response compared to resistive touchscreens, with a speed improvement of at least 40%, resulting in a smoother visual experience.

Chen Mo's Orange 1st generation wasn't about beating the Apple 4, but about beating the feature phones from the North China Strong competitors, and securing a ticket to the domestic smartphone era.

Core hardware cost +12 yuan!
2. Changes to distinctive components:
The mobile phone battery will be replaced with a new, cutting-edge technology developed by the system, instead of the original HuaT-10 model 1200mAh lithium battery and the integrated battery and battery case solution.

Solution for adapting an unknown model of gaseous lithium battery to a custom-packaged battery casing.

That's right! It's a phone that's adapted to the battery; that's something else entirely.

If it weren't for the research and development site, Chen Mo wouldn't have gone through all this trouble!
This is a solution for adapting an unknown model of gaseous lithium battery to a custom-packaged battery casing.

The research and development results of gaseous lithium batteries were originally provided by the system and were considered "zero cost". However, Chen Mo later rented a battery laboratory and bought materials to make batteries and packaged 1050 batteries in a unique battery case.

预备生产的1000台橙子1手机，原本只需要1000支电池就可以了，顶多预留3~5块作为备用。

The extra 50 batteries were used for three purposes: first, to submit as samples for testing; second, to reserve as spare parts; and third, to send as samples to some manufacturers. Chen Mo wanted to see if he could sell some gaseous lithium batteries as accessories to help Orange Technology recover some losses.

Although selling parts cannot accumulate R&D points, for this small workshop of Orange Company located in North China, the most urgent task is to make a quick profit and gain a foothold.

If you focus solely on research and development while neglecting the fact that the fundamental purpose of a company is profit, then you've reversed priorities and put the cart before the horse, inevitably leading yourself down a dead end.

Chen Mo didn't want to end up like he did in his previous life, where he couldn't sell a single Orange 1 unit, had to mortgage his company to Lao Wang, and was left with a mountain of debt.

Chen Mo roughly estimated that if all 1050 batteries were produced, even without considering his own labor costs, it would cost more than 6 yuan.

Therefore, when the production process cost is spread across the first batch of 1000 Orange 1st generation mobile phones, the cost of each battery is as high as 57 yuan.

This unique component directly increases the cost by 31 yuan, more than doubling it. And this is still the result of Chen Mo developing it "at zero cost" using his advanced mobile phone R&D system; if R&D expenses were included, the cost would soar to 60 yuan.

60 yuan, that's three times the cost of the mature lithium batteries currently used in the market. No wonder those counterfeit phone manufacturers in North China are unwilling to do the "stupid thing" of developing their own technology like Chen Mo did.

The high-tech products you develop yourself may not be good products on the market.

With such high costs and new technologies that haven't been tested in the market, users may not be willing to pay three times the price for such a slight performance improvement in your product.

Large manufacturers can cover and spread costs by extending the product payment cycle, but for small manufacturers to engage in self-developed products is completely overestimating their capabilities and is like moths flying into a flame.

With meager financial reserves and limited risk resistance, small factories may face a broken capital chain due to the high upfront investment once they embark on the thorny path of self-research and development.

Under pressure from large companies and market uncertainty, even if a small workshop like Orange Technology, which lacks systematic support, manages to develop its own products, it will likely struggle to make a splash in the market due to high costs and a niche positioning, ultimately resulting in a complete loss.

Fortunately, Orange Technology's R&D relies entirely on its systems, and the only cost it has to bear is the production process cost of applying new technologies, which it can manage to cover.

Special components cost +31 yuan!
3. Structural and Interaction Changes:

The machine body is made of engineering plastic (120×60×12mm, 135g). It uses a general mold discarded by Dongguang Factory, with only the LOGO injection molded part modified.

Chen Mo didn't plan to change the engineering plastic body material, but he intended to use a piano lacquer finish to enhance its texture.

Because baking paint requires a high degree of surface flatness for injection molded parts, about 5%-8% of defective products need to be discarded, thus increasing the cost by 3 yuan.

Keyboard – The physical keyboard has been removed from the original T9 full keyboard, and three capacitive buttons have been added to the bottom chin of the front screen (back, home, multitasking), and three function buttons on the side (power/power off + volume ±).

Adding or removing a keyboard does not change the cost.

Structure and interaction costs: +3 yuan!
4. The software network remains unchanged, and the cost remains the same.

5. Additional feature changes:
The resistive touch pen has been eliminated, reducing costs by 2 yuan.

Premium individual packaging box (using Dongguang public mold, bubble wrap, OPP self-adhesive bag, calendered and glazed double-layered support cardboard box, and finally the surface is laminated, cost 15 yuan)
Additional features cost: +12 yuan!
陈默改进后的橙子1代，总成本增加：12+31+3+12=58元。

Needless to say, the main component is a "self-developed" gaseous lithium battery. Now you understand why you can't consider the cost-effective route when developing your own batteries!
People are willing to do the business of beheading, but nobody is willing to do a business that loses money.

Even though Orange Technology relies on its own system and invests in R&D at zero cost, the process and material costs for manufacturing a new type of gaseous lithium battery have already reached 57 yuan per unit.

At 57 yuan a piece, there's no profit at all, while mature lithium batteries on the market only sell for 26 yuan a piece, and still have a gross profit of 10% to 15%.

Tell me how you manage to balance cost-effectiveness, compete with your peers, have extra money to invest in R&D, and also update processes and reduce supply chain costs!
Chen Mo himself entered the mobile phone manufacturing industry and engaged in "self-developed" technology, so he is probably the one who understands Huawei's "high price, low configuration" predicament the most.

However, Orange Technology has an advantage over Chrysanthemum Technology in one aspect: zero-cost research and development.

(End of this chapter)