Tech startup: I really do make mobile phones!

Chapter 195 The Resurgence of Unified Procurement
The autumn chill in Shenzhen couldn't completely quell the summer heat. Chen Mo, who had just returned from Beijing, accepted Shen Yiwei's unexpected invitation and took a rare day off to hike the old hiking route in Dongyong Village.

Essentially, Chen Mo, who is restless at heart, doesn't like this "unchanging" route, but Shen Yiwei values ​​the "atmosphere" of hiking more than the "novelty".

Since Shen Yiwei hinted that he had some personal matters to discuss privately, Chen Mo did not invite Jiang Yu, the technical department head who also shared a passion for hiking.

Otherwise, hiking together as a trio would be much more fun.

Xiao Zheng drove Chen Mo, who was "fully armed" with a windbreaker, hiking boots, a backpack, and trekking poles, to the entrance of Dongyong Village. Then, he led a group of people to hide behind the village and provide covert protection.

Unlike their light hike with Lu Qingyue at Jinshan Beach in Shanghai, the two amateurs are going all out for an extreme hike today.

The two set off from Dongyong Village and traveled along the winding and rugged rocky coastline.

Beneath your feet are jagged rocks sculpted by the waves over millennia, while beside you, the azure waves tirelessly pound against the shore, splashing up sprays like shattered jade.

Shen Yiwei also noticed Xiao Zheng and the others who were faintly visible in the distance, and joked with them.

"Xiao Chen, you're quite the character now, aren't you? You're making such a big fuss when you go out!"

Chen Mo smiled, his tone seemingly boastful but actually more self-deprecating: "There's nothing I can do, once you reach a certain status, you can't help it, Wei Ge!"

Shen Yiwei laughed and said no more. The two quickened their pace in tacit agreement.

Upon arriving at Chuanbiyan, the two immediately took a taxi to Yangmeikeng.

We rented two bicycles there and leisurely rode along the scenic Lu Zui Avenue, pushing them along steep slopes as we went.

Here, steep cliffs rise on one side and a vast, boundless sea view stretches out on the other. The sea breeze caresses your face, making you feel refreshed and relaxed.

After a quick afternoon snack of two energy bars, the battleground shifted to the north gate of Wutong Mountain.

Plunging into the Taishan Stream Trail, you are instantly enveloped in dense, cool shade, completely shutting out the hustle and bustle of the city.

Upon arriving at Hulu Pond halfway up the mountain, the two rested briefly and sipped water.

After descending the mountain, turn onto the Luohu Greenway for a walk.

Passing through the ancient, towering trees and the negative oxygen ions-filled Fairy Lake Botanical Garden, the bright yellow walls of Hongfa Temple are partially hidden among the green trees, and the calm surface of the tree fern lake is as smooth as a mirror, allowing one's heart to settle down.

As the afterglow of the setting sun painted the horizon a magnificent orange-red, they finally arrived at the end point of their hike: the starting point of the Shenzhen Bay Coastal Promenade, the Mangrove Park.

The two unloaded their slightly heavy backpacks and, traveling light, strolled along the gentle and comfortable seaside boardwalk.

On one side, the cityscape is silhouetted against the backdrop of dusky lights and shimmering neon, while skyscrapers begin their dazzling light show.

On the other side are lush wetlands, where migratory birds returning to their nests can occasionally be seen gracefully skimming across the water.

The city's vibrancy and the tranquility of nature blend together wonderfully at this moment.

At 6:30 p.m., after a full eight hours of trekking, the two dragged their leaden legs and finally arrived at the entrance of the small restaurant near Talent Park that they remembered.

"Viagra! Let's have a water fight!"

Chen Mo smiled as he took off his backpack and pulled out a bottle of mineral water that was still more than half full from the side pocket.

Shen Yiwei also took out his water bottle, shook it, and found that he consumed significantly less water than Chen Mo.

"Damn! Viagra! You've really impressed me today!" Chen Mo looked at his bottle, which had consumed even more water, and said with a look of defeat, "Fine! A bet's a bet, this meal's on me!"

Shen Yiwei rarely showed a hearty smile, and shook his water bottle: "You flatter me! Xiao Chen, sitting in the office all day is really taking a toll on you, your physical strength has obviously declined!"

The restaurant owner peeked out at the sound and saw two dusty, well-equipped "masked men" wearing hats and masks at the door. He was stunned for a moment, then suddenly slapped his thigh.

"Oh! It's Wei and Xiao Chen! Come in, come in! Same as usual? Salt-baked chicken with sand ginger, water chestnut and sugarcane juice with Imperata cylindrica root, and two big bowls of rice?"

"Boss has a good memory!" Chen Mo and Wei Ge smiled at each other, took off their hats and masks, revealing their sweaty but radiant faces after exercising.

The two leaned their heavy backpacks and trekking poles against the corner of the wall, practically slumped down on the small stools by the door, sipping the last bit of water from their bottles, enjoying the feeling of complete relaxation after extreme exhaustion and the comfort of the cool evening breeze.

"Brother Wei, what's on your mind today?" Chen Mo screwed on the bottle cap and got to the point.

"Ha! You figured it out after all!"

Shen Yiwei let out a breath, his expression becoming slightly more serious: "My senior brother said he wanted to retire gracefully and enjoy life. Master's intention is for me to take over the Bubu Ointment Group."

"what?"

Chen Mo raised an eyebrow slightly, somewhat surprised, but upon reflection, it made sense. After all, President Jin hadn't been persuaded by him to enter the smartphone market, and history was back on track!

"What about your blue factory?"

Shen Yiwei shook his head slightly, his tone somewhat complicated: "Originally, the license of Lan Factory was affiliated with Bubu Gao. There has never been an independent 'Lan Factory,' only the Lan Factory Business Department under Bubu Gao."

"Forehead?"

Chen Mo looked at him and roughly understood why Wei Ge had been silent and walking with his head down all day.

"Brother Wei, don't be so... over the top. All good things must come to an end, and you have to walk your own path in life!"

At this moment, the owner served up a steaming, sizzling chicken with sand ginger, and the aroma instantly filled the air.

Shen Yiwei handed Chen Mo a bowl and chopsticks, his tone returning to calm.

"When I came back, I never thought I would actually inherit the Step-by-Step Ointment. I thought my senior brother would promote his own disciple to the position. Now that this responsibility has suddenly fallen on me, I wasn't prepared at all!"

Chen Mo raised an eyebrow and chuckled, serving him a bowl of sweet and refreshing sugarcane and cogongrass juice.

"Alright, Viagra! Don't try to act innocent after getting the benefit."

You've essentially passed the beginner's trial and directly inherited a multi-billion dollar conglomerate.

"Who can we complain to when we've worked so hard and struggled to barely catch up to your starting point?"

Shen Yiwei was amused by his words and raised his cup to drink tea instead of wine.

"Brother, I appreciate your kind gesture, Xiao Chen!"

Then, amidst the aroma of food, Shen Yiwei roughly explained to Chen Mo the specific arrangements for the separation of the Bubu Gao family business.

According to the master's opinion, who was far away in Niuyue, he and his second senior brother Cheng Yonghao (Green Factory) would divide the family business of Bubu Gao.

The main body of the Bubu Gao Group (brand, core supply chain, R&D system) was inherited by Shen Yiwei, and the Lan Factory business line was incorporated into it.

With over 6 stores nationwide, the two companies split the profits equally.

Shen Yiwei was allocated approximately 3000 stores in first-tier and strong second-tier cities in East China, South China, and Central China, while Cheng Yonghao was allocated approximately 3000 stores in Southwest China, Northwest China, Northeast China, and third- and fourth-tier cities.

Regarding overseas channels, the Southeast Asian market is handled by Cheng Yonghao, while the Indian market is handled by Shen Yiwei.

Research and development and the supply chain have also been divided according to region and business focus, and a transition period has been set. After listening, Chen Mo clicked his tongue: "Brother Wei, what are you being so fussy about!"

"If I had a mentor back then, I could have made a decent mobile phone and passed the test, and then directly inherited such a huge multi-billion dollar group. I would be laughing in my sleep!"

Shen Yiwei smiled wryly: "I'm just a little confused. In the past, when I did things, my master and two senior brothers always took care of things for me. Now, I have to walk my own path in the future. There are too many unknowns."

Chen Mo smiled, his expression a mix of teasing and seriousness.

"Don't be afraid, Brother Wei! Although I'm a bit younger than you, I've probably suffered more losses and fallen into more traps on my entrepreneurial journey. If you ever need anything, feel free to ask me anytime!"

Shen Yiwei couldn't help but laugh and scold, "You've really gotten cocky lately! How much is Orange's market value now? You dare to compare yourself to me?"

Chen Mo laughed and said, "That's true! I'm so envious of your starting configuration."

"I only have about a hundred directly operated stores, and they are all concentrated in the southwest and western lower-tier markets. I only have one OEM factory, and I have zero overseas channels!"

Shen Yiwei said seriously, "Putting everything else aside, do you want to get in touch with the Indian distribution channels I've been allocated? There's still market potential there! I can take your oranges there!"

Chen Mo shook his head directly, his face showing a clear reluctance.

"Forget it, dealing with Indians gives me a headache. I think I'd better give up on this market channel!"

Shen Yiwei explained earnestly, "Don't underestimate the Indian market. The X8 from OPPO and the V1 from our blue factory are positioned in the mid-range market, and their monthly sales there are close to 10,000 units. India has a huge population base, so we have to do market development sooner or later!"

Chen Mo shook his head again, replying dismissively, "We'll talk about it later, we'll talk about it later."

Then, Shen Yiwei got to the point.

"Actually, the main reason I asked you to come out today is to ask you something. Is your previous 'Domestic Smartphone Procurement Alliance' still going on?"

"Uh," Chen Mo raised an eyebrow: "Brother Wei, does your Blue Factory have some exclusive technology that you want to share?"

He remembered that the Blue Factory didn't seem to have any particularly exclusive component technologies!

Shen Yiwei smiled and said, "It's not like you, coming up with disruptive technologies all the time!"

"These are some HiFi audio technology standard patents that BubuGao accumulated in its early years. I plan to use them on the Blue Machine V2 next year and then promote them in the alliance to share the R&D and patent maintenance costs!"

Chen Mo pondered for a moment, his expression somewhat amused.

"Isn't this a bit... a bit..."

He implied that this might touch a nerve with some people!
Shen Yiwei laughed and said, "What are you afraid of? You're now one of the thirty-two directors of the China Entrepreneurs Club, can't you hold your own? This alliance is a good thing for the industry!"

Chen Mo took a breath, as if he had made up his mind.

"Okay! As long as you don't stand me up this time, I'll do it!"
It just so happens that my Zhicheng centralized procurement business can be spun off and used as a shell company for the alliance!

Let's work together to share R&D costs, lower the barriers to entry in the industry, and promote the development of the domestic smartphone industry!

At the press conference when Longhua established the centralized procurement alliance, District Chief Zhang's high-sounding speech was brought up by Chen Mo.

Otherwise, why not just say I want to include all the accessories from the Orange series, so that I can promote the Orange standard while also dominating the upstream supply chain?
Shen Yiwei extended his hand and solemnly said, "Don't worry! This time, I'm in charge of the Step-by-Step Ointment, and I will never change my mind!"

"Snap!" The two high-fived as a pledge.

"A gentleman's word!"

"It's hard to chase a horse!"

This tiring yet exhilarating hiking dinner ultimately led to a crucial collaboration between Orange and Blue Factory (or rather, the new main body of Step-by-Step Cream).

The core idea of ​​the so-called "unified procurement alliance" is that members can contribute their mature technologies from the previous generation to the alliance, which will then integrate and adapt them into a set of public hardware solutions.

In this way, mobile phone brands, especially newcomers or small and medium-sized brands, can directly purchase a complete set of proven and collaborative component solutions.

The benefits are obvious: for technology providers, it can share the high R&D costs; for mobile phone brands, it greatly reduces the difficulty and cycle of R&D, and they no longer need to worry about the compatibility and driver adaptation between various components.

This is similar to a new player in the industry who cobbles together high-end chips, memory, and cameras, but due to compatibility issues, the final performance may not reach 60%.

While the public hardware solutions provided by the Unified Procurement Alliance may not be able to bring every component to 100% of its maximum performance, they can guarantee that the components will perform at more than 80% of their full potential.

Furthermore, the alliance can take the opportunity to incorporate some of its own hardware, such as Shen Yiwei's HiFi audio module and Chen Mo's gaseous lithium battery, into the public design, making promotion much more efficient.

Public design + brand customization = a relatively mature mobile phone.

The public version of the unified procurement alliance is somewhat similar to the "Panshi chassis" that CATL developed to integrate the three electric components in order to sell its own power batteries. As long as you add a car body and logo, you can basically sell cars.

Chen Mo even enthusiastically discussed with Shen Yiwei the possibility that the R&D centers of Lan Factory in Shenzhen and Dongguan, where the Step-by-Step Cream is located, are quite capable. They could have the Lan Factory team develop a reference design for a mid-range phone, while Orange could develop a reference design for a low-end entry-level phone.

With two major solutions covering the mid-to-low end of the market, this is enough to attract the large number of new players currently entering the smartphone industry.

After all, not every new player can quickly assemble a development team. Now, the Unified Procurement Alliance provides them with mature public version solutions, and they only need to set up a testing team for acceptance.

If we speed things up, we can release a new model in about a month!
In Chen Mo's view, the timing of the emergence of the unified procurement alliance was just right.

The smartphone craze is attracting a large influx of capital, and many newcomers want to get a piece of the pie. This unified procurement alliance is like providing these new players with a "shortcut" to quickly enter the market.

This is almost equivalent to providing a "reference chassis," a complete solution that includes hardware solutions and underlying system UI/UX optimizations.

New players entering the market only need to design an eye-catching casing, affix their own logo, and if they're particularly ambitious, they can create exclusive customizations and quickly launch a smartphone with a decent user experience.

This has undeniable strategic value for rapidly maturing the domestic market, building an industrial ecosystem, and even for countering foreign industrial chain standards such as the "Apple supply chain" and the "Three Crystals supply chain" in the future.

By integrating large-scale demands such as millions of domestic orders and supplementing them with standardized cooperation terms, the centralized procurement alliance can force the upstream supply chain to shift from "passive adaptation" to "proactive upgrading," ultimately establishing the industry's dominant position where the domestic demand side defines the supply side.

Chen Mo doesn't seek to control the standards of the foreign smartphone industry chain, but at least in the domestic smartphone industry chain, he wants to ensure that the Chinese people have the final say.

The current high barrel tax is 3.25%, and it will rise to 5% in the future. But it's not just the high barrel tax; there are also additional patent fees for those foreign-dominated industry chain standards.

For example, the Orange 2 still uses the inherited miniB to avoid paying the USB Alliance's patent fee of 5 cents per USB connector!
There are many other issues with smartphone industry standards dominated by foreign companies, besides high taxes and USB patent fees!
What Chen Mo needs to do is try his best to regain the standards of the domestic industrial chain.

Of course, there's nothing that can be done about the near-monopoly patents held by high-end 4G, but there are standards for motherboards, headphone jacks, and audio.
There is still a chance to win back domestic standards for these low-tech components.

Otherwise, domestic smartphones will go back to the old ways, where in addition to hardware costs, they will also have to pay a lot of standard taxes to foreign companies, which is too unfair.

Night had completely enveloped the city, and the area outside the restaurant was ablaze with lights.

Although the two young men could not hide their exhaustion, their eyes shone brightly because they had reached a consensus on reclaiming domestic industrial chain standards.

Over a bowl of fragrant sizzling chicken and refreshing sugarcane juice, they continued to refine their plan, which could potentially shake up the entire industry's standards.

Unbeknownst to them, Cook and Masque had already landed.

The impact of Chen Mo's newly revived centralized procurement alliance may extend beyond changing domestic industry standards and could even extend beyond the smartphone industry!

(End of this chapter)