Tech startup: I really do make mobile phones!

Chapter 205 Orange 2Q
October has just arrived, and the domestic smartphone market is already bustling with activity as the four major manufacturers are about to release new models!
At that time, the domestic smartphone market was still a blue ocean, and the competition was not so fierce. New phone releases were not as frequent as they would be in later years, and each company had its own unwritten rhythm.

Springtime is a "cash crunch" period after the Lunar New Year, so regardless of whether it's a large or small manufacturer, they generally won't choose this time to release new products.

Unless it's a startup or a declining brand trying to take a gamble, or trying to avoid competing with major companies, they're likely to postpone their release until spring.

Summer is a window of opportunity for small factories to launch new products after people have saved some money from their part-time jobs.

The real golden period is from autumn to the Chinese New Year. Everyone has saved up for half a year, and their willingness and ability to upgrade their phones are at their peak. The four major manufacturers, iFlytek, ZTE, and Coolpad, always choose this time to concentrate their efforts.

Now, the four major manufacturers, including Coolpad, ZTE, and CFMOTO, are eager to release new phone previews and have their posters plastered on offline stores and online homepages, hoping to steal the spotlight from the autumn upgrade trend.

But no one expected that a "storm" from overseas would completely overshadow the voices of all domestically produced mobile phones.

The Apple 4S, carrying the stellar reputation built up by the Apple 4 the previous year, has officially entered the domestic market.

As soon as the news was released, the scene in front of Pingguo flagship stores across the country changed.

At four in the morning in Beijing, the sky was still shrouded in darkness, and the cold wind swirled fallen leaves against people's faces, yet a long, winding queue had already formed in front of the Pingguo flagship store.

The young man at the front of the line was wrapped in a thick coat, holding a folding stool in his hand, his eyes fixed on the closed shop door, with a freshly bought hot soy milk at his feet.

He arrived at 10 PM the night before to reserve a spot, muttering, "I have to get a first-release spot this time! I can resell it for five or six hundred yuan and make a profit!"

In the middle of the group, a few college students huddled together, watching Wang Gehu's review video of the Hong Kong version of the Apple 4S on their phones, and excitedly discussing it from time to time.

"This Retina display is so amazing!"

"The A5 chip is far more powerful than the JF-17!"

"iOS 5 is much smoother than Android 4. Android still doesn't have a power management system, it's so outdated!"

Among the people queuing, many office workers had specially switched to the early shift, standing at the end of the line with dark circles under their eyes, clutching bank cards with money already transferred in, afraid that they would miss out on the goods if they were a step too late.

Yes! The Pingguo flagship store currently does not support third-party online electronic payments!

However, it is actively pursuing public relations in China, preparing to obtain the second batch of electronic payment licenses and launch its own Pingguo Payment!

By 7 a.m., the queue had already circled half a street from the flagship store entrance, and passersby couldn't help but peek out.

"What are they buying? Why are so many people queuing up?"

"Pingguo 4S goes on sale today! Didn't you see the news?"

At exactly eight o'clock, as soon as the store door opened a crack, the line moved forward instantly, and the people in the front row even clapped excitedly, while the store staff shouted through a megaphone.

"Please don't push, please proceed in order, one unit per person!"

But her voice was quickly drowned out by the noise of the crowd.

This kind of wildly popular scene was simultaneously playing out in multiple cities across the country.

Pingguo did not disappoint. Within just three days of its launch, the first batch of 200 million units in China were snapped up, and the official website displayed a "sold out" message.

Many people who missed out were still lingering outside the store, pestering the staff with questions like, "When will you restock?"

This wave of strong sales not only solidified Pingguo's position as the "world's number one smartphone brand," but also gave domestic consumers a more direct understanding of the "Pingguo" brand.

After all, a phone that can make so many people stay up all night to queue up must be a good thing!
This assessment clearly demonstrates Apple's dominance in the smartphone market at that time.

Objectively speaking, in the smartphone industry in 2011, with the solid reputation established by the iPhone 4, apart from the Samsung Galaxy S1, everything else was just rubbish compared to the iPhone 4!

Faced with the strong arrival of the Pingguo 4S, the four major domestic manufacturers reacted differently.

Fantasy, Chrysanthemum, and Zhongxing decisively chose to temporarily avoid the limelight: Fantasy, whose new phone was originally scheduled for mid-October, directly announced that it would be postponed to November, while Chrysanthemum and Zhongxing turned to increase their investment in overseas channels, thinking of looking for opportunities in Southeast Asia, Latin America, and the European market.

Only Kupa remains focused on the domestic market, not because it is unafraid of Apple, but because it is waiting for another wave of "dividends".

Just one week into October, the Ministry of Information Industry officially announced the extension of the national subsidy policy for smartphones: operators will lead the purchase of customized smartphones worth 145 billion yuan, still covering five manufacturers.

Once the subsidy amounts were announced, everyone in the industry understood.

This time, Kupa is still the biggest winner, accounting for 42.3%, which is well worth it for abandoning its own channels in order to curry favor with the operators and show its loyalty.

Following closely behind are Fantasy (16%), Central Star (15.8%), Chrysanthemum (13.6%), and Orange (12.3%), ranking last.

Although oranges' market share has increased by 2.3 percentage points compared to last year's 10%, Chen Mo knows the truth perfectly well.

Although Orange 1 was included in the national subsidy list last year, due to the intervention of Yudong, many subsidies were not actually implemented.

A slight increase this year is already a good result, and it can be considered a small compensation from Yudong for the turmoil last year.

As for Kupa's exaggerated 42.3% market share, Chen Mo didn't feel envious.

Don't be fooled by the fact that Koopai is currently enjoying national subsidies; its technological research and development has long stagnated, its offline channels are on the verge of collapse, and its total sales are at the bottom among the four major manufacturers, relying entirely on subsidies to stay afloat.

As soon as the national subsidy arrived, Orange took immediate action.

Based on a 12.3% market share, Orange can receive 17.835 billion yuan in subsidies, which will be shipped over three months. Based on the ex-factory price of Orange 2 at 471.5 yuan, it can maintain a profit margin of about 13%.

Through carrier-customized handsets, 378 million Orange 2 units were sold in the fourth quarter of 2011.

These 378 million units are no small number; they account for almost one-third of the Orange 2's current total sales.

Previously, Orange 2's sales were slightly lower than Wheat 1's, but it overtook it in October. It not only secured its position as the "leader among the four small domestic manufacturers," but also gained the confidence to challenge the major manufacturers.

Chen Mo sat in his office, looking at the sales report and couldn't help but smile.

At this rate, Orange's total sales will most likely surpass 10 million units by the end of this year. According to the classification methods of those industry media, Orange is expected to become the "bottom-ranked" among the major manufacturers this year.

Regardless of whether government subsidies are involved in this sales volume, at least oranges have a chance to break into the market.

It's worth noting that even the lowest-selling brand last year, Coolpad, only sold 1200 million units. If Orange puts in a little more effort, it might be able to dethrone it from the "Big Four" of the market.

Even if we fall short this year, we will definitely catch up next year.

After all, Coolpad only cares about taking advantage of national subsidies and doesn't strive for progress. Now there are more and more new players in the domestic smartphone market, and the competition is so fierce that if you don't move forward, you will fall behind.

Even if oranges encounter some minor problems later, and with the national subsidy ending next year and the strong impact of wheat sales, Kupa may not be able to maintain its current position.

Here's a little-known fact: Wheat is a company that's very similar to Apple. It entered the market at its peak and knocked out Koopa in just two years.

If it weren't for the "orange bug," Xiaomai might have been the most amazing smartphone manufacturer in China this year!
Now that the Orange 2 is more than halfway through its sales lifecycle, it has suddenly received a strong boost from the national subsidy. The sales volume of 378 million units has been spread over 4 months, which means an increase of 94.5 units per month.

Originally, the Orange 2 had already entered the mid-to-late stage of sales, and the company had planned to gradually reduce production capacity. However, with the implementation of the national subsidy policy, relying on the 378 million orders from operator channels, the existing production capacity not only did not need to be reduced, but also had to be maintained at all costs to keep up with demand.

As a result, the development team for Orange 2Q was completely unable to spare any manpower.

This means we can't let the technical team responsible for the development of Orange 3 do two things at once, nor can we delay the existing production of Orange 2, so Orange simply can't handle this on its own.

There's actually a little story behind Orange 2Q.

Originally, Chen Mo positioned the "Q series" as a "youth version," aiming to gain as much as possible from research and development.

Unexpectedly, netizens had a wild imagination. Someone started interpreting "Q" as an "enhanced version." Actually, there's a reason why netizens would associate "Q" with an "enhanced version."

Previously, the Orange 1Q was an enhanced version of the Apple OTG power bank (Apple Companion), which could provide emergency power to Apple 4 phones, giving everyone the impression that "Q = practical enhancement".

Now that we've got the Orange 2, if we follow this line of thought, we naturally assume that the Orange 2Q should be an enhanced version of the massager.

Since the 1Q series solved the battery life issue, it's only natural that the 2Q series would address the neck and shoulder fatigue common among working professionals.

To put it bluntly, whether it's the Orange 1Q with a power bank function or the massager version of the Orange 2Q that netizens are urging for, they are essentially versions that Chen Mo wanted to create to "collect R&D points" in response to user demand.

This isn't a gimmick that Orange Company came up with out of thin air; rather, it's about pushing the product in the direction that people lack and hope for.

This actually makes it more practical than products that are deliberately designed.

When Quality Watch published a clarification article that subtly praised the Orange 2's motion-sensing interaction system, it explained in detail the real reason for the repeated failures of the system.
This caused an uproar among netizens, who shifted their attention from the "interaction failure" to the demand for an "enhanced version," and unanimously turned their fire on the official Orange app.

The article from Quality Observer had been circulating for about half a month when Orange, who was completely isolated from the internet, finally started trending on Weibo.

The comment section and topic area were filled with messages from @OrangeTech, urging for more updates, making it as lively as an online party.

"@OrangeCompany, stop playing dead!"
I just read in *Quality Watch* that interactive malfunctions are a minor issue, but where are your hidden "cute version enhancements"? Hurry up and bring out your massagers with call functionality!

This comment garnered over 20,000 likes in just ten minutes, and the comments below were all like:
"Seconded!"

"+10086!" Some netizens also posted a hand-drawn "Orange 2Q concept design", with the cylindrical body covered with massage touch points, captioned "If it's made to this standard, I'll order ten units first!"

A netizen commented on him: "Hey! Something's not right with your Orange 2Q!"

Immediately afterwards, the hashtag #IfOrange2QIsNotReleasedIsIWillChangeMyPhone# quickly rose to the top of the trending topics list.

In less than two hours, "@OrangeCompany urges for an update of the 2Q massage device" reached number 23 on Weibo's trending list, with related topics garnering over 100 million views.

The latest post on Orange's official Weibo account reads: "Orange thanks you! Loading..."

The netizens who finally succeeded in urging Orange 2Q to be updated were overjoyed!
After that, the topic of oranges reached number 15 in popularity, but then it couldn't go any higher.

Um... It's not that Weibo deliberately messed with Orange, but rather that Luo Jianzhi was giving a stand-up comedy routine, constantly firing off attacks!
Chen Mo couldn't help but open Youku to watch the replay.
Luo the Hammer spoke!

Let's talk about Pingguo first. What kind of technology does that thing have?
I'm not trying to belittle it, it's just a large township enterprise that's relying on its first-mover advantage to stay afloat. Sooner or later, it'll be acquired!

Looking at wheat, isn't it just a resource integrator?
They copy this design today and move that function tomorrow, without any of their own original ideas. How dare they call it "innovation"?
And the boss of Meizu, to be honest, I really don't think he has any talent for this job. He makes products like a headless fly, unable to grasp the key points.

Finally, let's talk about oranges. Some people ask what's innovative about them?

Let me tell you, the aesthetics of its products are simply blinding!
Do you guys remember that Q series?
Last year, Orange 1Q was just a power bank with a call function added, and they dared to call it an "enhanced version". Now, following this line of thinking, netizens think Orange 2Q should be an enhanced version of a massager.

I'm telling you, this person's thinking is clearer than Orange's own!

But look at the aesthetic design of Orange. If they were to actually make a massage device, I'm afraid they'd turn "massage" into "stun gun".

After all, their aesthetic standards are what they are, don't you think?

Looking at his official Weibo account's backend, filled with messages from @橙子2Q urging him to update, and watching Luo Chuizi's stand-up comedy playing in front of him, Chen Mo couldn't help but smile.

Selling mobile phones through online channels certainly requires attracting attention, but ultimately, once users are fooled, they won't fall for it a second time. In the end, it's the product's strength that matters!

And Luo's Smartisan phone hasn't even been made yet! He's already dissing a bunch of people!

Chen Mo didn't think the orange looked ugly at all! It was just a little ordinary, wasn't it?

At prices of 499 or 699, you can only use some engineering plastic shells. You're asking me to have exquisite aesthetics? That's ridiculous!
Ignoring Luo Chuizi's interference, Chen Mo began to consider agreeing to the issue of developing Orange 2Q.

The biggest problem is the R&D team. The technical department is busy working on Orange 3, and they are currently stretched thin!
Chen Mo suddenly remembered Lai Fen.
Orange Home Smart
Heed my call and appear!

He picked up the internal phone, pressed number 6, and went straight to Lin Junfeng's office: "Manager Lin! How's the acquisition of Laifen going?"

Lin Junfeng, on the other end of the phone, immediately reported.

“Mr. Chen, the other party currently only has one hair dryer product, no fixed assets, and monthly revenue of about 120 million. We gave them a valuation of 500 million, but they don’t accept it and insist on 800 million.”

"500 million to 800 million."

Chen Mo frowned, his tone becoming more urging.

"Now is not the time to dwell on these 300 million!"

You don't know! Netizens are urging us to develop an Orange 2Q game, and we must take advantage of the current online buzz to launch it as soon as possible.

The technical department is currently focused entirely on the development of Orange 3 and is unable to spare any time, so Orange 2Q is a good opportunity to be handed over to the Laifen team.

Slowing down progress for such a small amount of money and missing out on this wave of users would be penny-wise and pound-foolish!

Lin Junfeng, being an elite proficient in law, technology, and business, immediately understood Chen Mo's concerns.

Saving time is more important than saving a little money.

He immediately agreed: "Don't worry, Mr. Chen. The negotiations were already nearing their end. Now that you've set the tone, we'll just make appropriate concessions!"

"Barring any unforeseen circumstances, the person coming to Fen will be able to report to you in the company's conference room number 2 tomorrow!"

"Brother Lin, you're the most reliable person!" Chen Mo laughed, then changed the subject and offered a bonus: "This acquisition will be based on 800 million. If we can save some money in the end, half of it will be your bonus!"

Lin Junfeng on the other end of the phone immediately thanked him with a smile, and became even more motivated.

After hanging up the phone, Lin Junfeng didn't waste any time. He took two interns from the legal team upstairs and headed straight for the temporary conference room in Laifen. This was the third round of negotiations between the two sides.

The three co-founders of Laifen had been waiting for a long time: General Manager Ye Xinghong, Technical Director Liu Zhiyu, and Chief Designer Li Qiaoli.

The three of them still looked somewhat apprehensive.

As the saying goes, "a person's name is like a tree's shadow," and Chen Mo personally witnessed the explosive growth of the orange downstairs, which led to his rising status.

The three from Laifen were somewhat worried that the orange acquisition would fail and that they would not play by normal business rules.

Lin Junfeng got straight to the point: "I've called everyone here today because I have the final offer for Chengzi: a one-time purchase of 600 million!"

"This money can be directly allocated to the three of you based on your shareholdings! Later, the company will also inject additional capital, giving each of you a 5% equity incentive!"

Ye Xinghong paused for a moment, then carefully said, "President Lin, don't laugh at me, but I made money when I was working with Taobao in my early years, so I'm not saying I've never seen money before!"

"When we founded Laifen, we wanted to realize our own ideals. We even made electric skateboards at the beginning, but unfortunately we couldn't open up the market. I just wanted to know, what do Orange want us to do after they acquired Laifen?"

"We'll continue with 'small home appliances,' which you're good at!" Lin Junfeng revealed with a smile. "Specifically, we're taking on a new project: the Orange 2Q massager, which has a call function. President Chen values ​​it highly."

"Moreover, Orange will provide full support for your suppliers, contract manufacturers, and sales channels in the future. You only need to focus on operations and R&D, and you won't have to go it alone like before!"

Ye Xinghong's eyes lit up, and he turned to look at Liu Zhiyu and Li Qiaoli. Lai Fen was able to get to where she was today because of the cooperation of the three of them.

Before he could speak, Lin Junfeng looked at Liu Zhiyu again, his words containing a "bait".

"I had heard about Engineer Liu's small high-speed noise-reducing motor technology before."

Our company, Orange Technology, has a micro-motor factory in Chongqing that makes gyroscopes and micro-motors. Our products are in the supply chains of international giants such as ASMI, Senjing, and Derma.

If you're interested in exchanging technical information later, you can always come to me for discussions.

Liu Zhiyu was already obsessed with technology, and his eyes lit up immediately when he heard this.

He only knew that Orange had Yuancheng New Energy's gaseous lithium technology, but he didn't expect that there was such a low-key precision manufacturing plant hidden there.

He secretly gave Ye Xinghong a look, clearly showing that he was interested.

Seeing that the two of them had relented, Li Qiaoli followed suit, nodding with a smile.

However, she suddenly added a condition: "President Lin, I have a small request. As long as He Jian is still in charge of Chengbao, our team in Fen will not work in the same place as them!"

Upon hearing this, Lin Junfeng immediately understood.

Years ago when they were playing Taobao, He Jian probably cheated her, so she still holds a grudge!

"This is easy to solve!"

Lin Junfeng had already learned about this feud through Wang Teng of Chengbao, and immediately agreed.

"At the Longhua Yuancheng New Energy Industrial Park, we have already acquired two Grade A office buildings, and Orange will be relocating there as a whole."

You can just give General Manager Chen a report and we can move over together. For now, you'll have to make do here for the next two or three months!

Upon hearing this, the three were completely relieved and said in unison, "It is our honor to join the Orange family!"

That afternoon, Laifen officially merged into the Orange Group and was renamed "Orange Home Smart Company," mainly engaged in smart home business. Ye Xinghong, Liu Zhiyu, and Li Qiaoli continued to perform their respective duties, becoming the "three driving forces" of Orange Home Smart.

With this, another piece of the Orange Group's territory has been added.

Currently, the companies under the Orange Group include:
Orange Technology: The core pillar, making smartphones, holding a full range of core patents, and also responsible for investing in and strategically holding shares in peripheral companies.

Yuancheng New Energy: Manufacturer of gaseous lithium battery cells, specializing in service solutions for the consumer battery sector.

OrangeTech Micro Motors: We manufacture gyroscopes and micro motors, serving the consumer electronics and precision manufacturing industries.

Orange Treasure Mobile Internet: Controls the traffic entry points and advertising distribution systems for basic mobile applications.

Orange Creation Materials: A core confidential materials manufacturer, supporting the foundation of Orange Group's manufacturing.

Zhicheng Unified Procurement Standards: Responsible for the promotion and standardization of upstream products across the entire supply chain.

Orange Home Smart: A brand new member, starting with smart home small appliances, and poised for takeoff.
(End of this chapter)