Reinventing the Millennium

Hosting the YiKe press conference again after three years, Fang Zhuo was not nervous when he took the stage. He was not nervous when he announced the full-screen sales, nor was he nervous when he took out the new mobile phone. His heart rate was displayed on the big screen.

However, when he tried to downplay it, his heart rate spiked.

Needless to say, people in the industry know the meaning of baseband. Many viewers at the scene and watching the live broadcast did not understand its meaning. However, from the heart rate of the leader of Yike, he can also have an intuitive feeling that this matter is very important!

There are also smart people who have already taken out their mobile phones, turned on their computers, and searched for the pre-market trading of Nasdaq very purposefully.

You won’t know if you don’t search, but you’ll be surprised if you search!

Many stocks have already fallen before the market opens, such as direct competitors Apple and Samsung. The news that Yike's full-screen production capacity is about to be released is negative. Like Duji, it was probably wiped out inadvertently, like Qualcomm... …

It’s you, Qualcomm!

You fell so hard, you must have made Mr. Fang’s heart beat faster!

In just one minute, a Wall Street analyst even updated the message on Twitter: The flagship SoC Zhurong 04S equipped with Yike’s new Mars machine integrates a baseband chip, which is bound to have a huge impact on Qualcomm.

In fact, in just a few minutes, Qualcomm's pre-market share price plummeted 7%, and many people can already be seen panicking.

From last year to this year, Qualcomm's life has not been particularly easy. Among the three companies that occupy the high-end mobile phone market, Apple has A series chips, Yike has Zhurong series chips, and Samsung also has Exynos series chips. Among them, Yike can also divide A Selfy product line is equipped with Qualcomm Snapdragon. Samsung originally had a similar process, but last year’s Trump flagship completely used its own Exynos.

As far as the high-end market is concerned, Qualcomm only has one Yike sub flagship product endorsement left.

This undoubtedly puts Qualcomm in an embarrassing situation. Since smartphones set off a global wave, it once dominated the two major mobile phone brands Yike and Samsung, approaching the position of Zeng Deyi in the high-end market.

However, when word spread among three friends, Apple and Yike first launched self-developed chips, and then Samsung secretly introduced Exynos. Qualcomm's share of the high-end chip market quickly decreased.

Fortunately, neither Apple nor Yike sell chips to the outside world, and Samsung’s Exynos is not strong enough. Qualcomm is very good at second-tier mobile phone brands.

At the same time, as the global sales of smartphones increase year by year, the patent fees charged by Qualcomm have also continued to rise.

In fiscal year 2012, Qualcomm's $18.2 billion in revenue came from patent licensing, with $5.8 billion coming from patent licensing. According to its financial reports for the first three quarters of this year, patent fees collected in 2013 are expected to exceed $7 billion.

Qualcomm's patent licensing revenue accounts for 30% of total revenue, but the profits generated by patents account for more than 80% of total profits.

Among them, its dominance in baseband patents is an important factor.

Therefore, when Fang Zhuo announced the news of SoC Zhurong integrated baseband chip at the high-profile Yike conference, the impact on Qualcomm was far greater than ordinary people imagined.

This not only means that it has lost Yike, a major customer of baseband chips, but also provides other brands with the possibility of bypassing Qualcomm baseband and some patent licensing fees.

"Zhurong chips have been making progress. This integration of baseband chips is the result of years of research and development. It is not easy and deserves celebration."

Fang Zhuo allowed the noise to rise from small to large. After witnessing the commotion for a while, he simply summed it up with this sentence.

Years of research and development are not easy and should be celebrated.

To be precise, since the financial crisis that swept the world in 2008, Yike has been researching and investing in this area for 5 years. It first absorbed the relevant teams and technology patents of Texas Instruments.

TI also wanted to directly package and sell the entire business sector to Yike, but the price was too expensive, and more of it was not needed by Yike, so it settled for accepting talents and technology.

However, TI was already defeated by Qualcomm at that time. Therefore, in order to make progress in this area, Yike maintained investment on the one hand, and also roped in Apple and Samsung to participate in the development of Infineon Wireless Solutions Department WLS. The focus of the acquisition is for its baseband patents and technology.

Later, Samsung withdrew from this technical cooperation. It chose to use Intel's baseband chips in addition to Qualcomm, which was considered to improve the supply chain. Another important reason is that WLS, which maintains independent operations, is a money-loser.

Infineon is also a loser in the chip market. This jointly acquired business will lose US$300 million a year. Infineon itself has shed a heavy burden.

Although such costs are high, the three companies can naturally afford it when they join forces. However, the competition between them has become increasingly fierce, and joint research and development has become eccentric, so Samsung withdrew midway.

Three monks had no water to drink, but two monks made do with it. Based on this kind of technical cooperation and investment, Yike has still acquired a lot of patents in the past two years, including purchasing standard essential patents and non-standard essential patents from Huawei. The combination of patents, cross-patent licensing with Intel, Huawei, and operators, ultimately...

A breakthrough in baseband integration was achieved this year.

Yike has notified Qualcomm of this news. Although Mars no longer purchases Qualcomm plug-in baseband chips, there are still Qualcomm technology patents that cannot be avoided. After all, Qualcomm has laid out patents for too long, otherwise it will not be enough to compete with other competition. The opponent makes a killing spree.

However, as of this press conference, Yike and Qualcomm still have not reached a new long-term patent licensing agreement.

No one knows the huge threat posed by Yike's breakthrough better than Qualcomm. What's more, there is Apple behind it, which is ready to make a move, and it is participating in the joint research and development.

Qualcomm once had an extremely close cooperative relationship with Yike, and its huge chip orders were an important factor in revitalizing the development of ice core. Therefore, it gave Yike a relatively preferential price in the context of high patent licensing fees in the global market. A fee of 1% of the total machine price is charged.

Normally, Qualcomm claims that the patent licensing fee is 5%, that is, if the price is 5,000, it will pay it 250, but it actually has a discount ratio with some mobile phone manufacturers that have premium capabilities.

Yike has ice core manufacturing capabilities behind it and is a representative of high-end mobile phone image. According to inference, this 1% is probably the lowest price in the world. Samsung and Apple may be around 2%.

However, although it is the lowest, this is still an unsatisfactory charging method, because Qualcomm charges money based on the use of its patents and charges based on the price of the whole machine. For example, Intel uses its baseband chips and The relevant patented technology is to charge based on the price of the parts, rather than taking money from the whole machine.

This is also the origin of the name "Qualcomm tax" for Qualcomm patent fees.

Fang Zhuo, who was on the stage, spoke up again without suppressing the discussion in the audience. He knew that many of today's guests and audience knew the situation, and it was inevitable that they would be emotional. However, since he continued, he did not want to discuss it in detail. .

"Zhurong 04S adopts the supplier's 28nm HKMG process, which has stronger performance than the Zhurong 04 we released in the first half of the year. The frequency of each core is 2.3GHz, which is a big improvement."

Fang Zhuo did not provide the name of the supplier, but everyone knows that it is Yike’s designated partner Bingxin International.

In the first half of the year, Bingxin used the low-power version of 28nm 28nm LP for Zhurong 04. The frequency of each core is 1.7GHz. The current 04S has been upgraded in all aspects.

In fact, Yike internally planned to name it directly Zhurong 05, but considering the longevity of the mobile phone series and the synchronization with the tablet, it only added an S.

"Not only the frequency, Zhurong's IPC has also been improved, and the second-level cache is also faster. We have great confidence in the performance of Zhurong 04S."

As Fang Zhuo continued to output, the scene became quiet, and the heart rate of the leader of Yike displayed on the screen gradually stabilized, falling from 100 to 90, and then stabilized at around 80 again.

Fang Zhuo said with a smile: "It can be said that Yike's Zhurong 04S is the best in the world. This is the result of Yike's step-by-step progress. I am proud of it."

A SoC chip that impressed the head of Yike.

When many media members in the audience heard Mr. Fang's statement, similar titles came to mind. This was something they had rarely seen from Mr. Fang in the past.

After three years, Mr. Fang’s press conference was really more serious.

However, this is the first product launched by Yike in the 4G era that embodies Yike technology and ice core technology. It is not surprising that it is introduced with such emphasis.

Fang Zhuo went on stage and talked a lot. His tongue was already dry. After adding two sips of water, he let the camera show a close-up of the mobile phone screen. After finishing the Zhurong chip, he introduced: "Whether it is Mars or Selfy this year, we are on Android The system has been given some more convenient designs.”

“Like this screenshot of two-finger tapping.”

"For example, this slides from the edge of the screen to return to the previous level."

Fang Zhuo demonstrated some tips on how to use the phone and said with a smile: "Of course, you can also customize the functions of gestures. Depending on your habits, I think it's still very useful."

"Oh, by the way, I talked about face recognition before, but I can't use it this year. First, the function is still not mature enough. This needs to consider security issues. Second, we still prioritize full-screen optimization. This goes back to the beginning. For the time being, Mars’ hole-digging does not leave enough space, and the Pro’s bangs are not easy to accommodate for the time being.”

"I look forward to our R\u0026D department providing more mature and excellent solutions. In fact, I have tried them in my office and at home, and overall they are pretty good. There should be no problem next year."

Fang Zhuo was obviously more relaxed after talking about the chip, and his heart rate had dropped to 72.

He picked out some other new features of the Mars series this year, including autofocus, NFC functions, etc., and arrived at the final quotation.

The starting price of Mars is US$649, and Mars Pro is US$749, and the prices with carrier packages are still US$199 and US$299.

The starting price of Bank of China is 4488 and 5188 Huaxia coins.

It is worth mentioning that China has not officially issued 4G licenses to operators, but operators still have the name of testing. The domestic promotion of Yike mobile phones should be the first batch of 4G test mobile phones in China.

The Mars series has come to an end. According to custom, next is the explanation of Selfy, which is more like the sub-flagship. However, Fang Zhuo turned to another gadget newly launched by Yike - wireless Bluetooth noise-cancelling headphones.

After finishing talking on the headset, Fang Zhuo took another sip of water and said with a smile: "I haven't held a press conference for a long time. I am too tired. Next, our President of Yike Europe, Pan Ben, will explain our Selfy mobile phone to everyone."

A sub-flagship product equipped with Qualcomm Snapdragon flagship.

A product that is still conservative and maintains a non-full screen.

A product that was quickly credited with clearing out inventory.

A product that caused the secondary market to see the situation and continue to make Qualcomm’s stock price plunge...

In fact, Selfy has also turned on a full screen this year, and it has a notch screen. However, it maintains the same strategy as Mars last year, distinguishing between the standard version and the Pro version.

In particular, because the Selfy standard version has the most mature craftsmanship and technology, it is the mobile phone with the strongest shooting capabilities among the four models: Mars, Mars Pro, Selfy, and Selfy Pro.

Well, after the head of Yike stabbed Qualcomm with the Zhurong 04S, his approach of not personally introducing mobile phones equipped with Qualcomm chips will inevitably lead to speculation and analysis.

Is it possible that Mr. Fang’s malice can no longer be restrained?

Will Yike soon launch an independent plug-in baseband chip?

You know, Qualcomm's annual revenue is not low, and its market share is also a large piece of meat. Its market value this year is also US$100 billion.

Such different possibilities spread ambiguously during the time when Fang Zhuo stepped down from the stage and took his seat.

"Pan Ben seems a little nervous." Yu Hong sat next to Fang Zhuo and looked carefully at the European CEO who was sweating on his forehead. He also showed his real-time heart rate, which was already 135.

"Just get used to it. I think you were nervous when you hosted the press conference for the first time. Maybe you didn't take it seriously." Fang Zhuo nodded slightly and suddenly asked, "Is there anything happening at Qualcomm?"

"No." Yu Hong couldn't help but say, "You weren't just waiting for the news of Qualcomm's lawsuit on stage."

"Let's continue talking. If we can't agree, don't affect our sales." Fang Zhuo said in a low voice. "Cook also called me before the press conference and talked about the external baseband chip."

The joint R\u0026D between Apple and Yike is limited to the WLS cooperation framework, while Yike's baseband integration involves more aspects of R\u0026D and cooperation, but the patents are cross-licensed.

In other words, Apple needs to consider integration or plug-in. The latter will be from the independently operated WLS, and the former will require further research and development.

The patent agreement signed between Apple and Qualcomm is for 2015, but Apple has long been dissatisfied with Qualcomm's tax. It will definitely not work this year. Next year will be a suitable time.

If Qualcomm initiates a patent lawsuit against Yike, it will definitely face a lawsuit from Apple next year. This is a tacit understanding between the two companies to potentially reduce Qualcomm's tax.

However, although Yike has not yet negotiated a new patent agreement with Qualcomm, the other party is already very entangled.

Because this year’s Chinese market will provide Qualcomm with more than 40% of its revenue, and relevant investigations are already underway regarding Qualcomm’s suspected monopoly behavior of forcibly bundling chips and patents.

With a huge market that is difficult to abandon, policy advantages in local competition, and the only remaining brand image of high-end mobile phones, Qualcomm must make prudent choices. (End of chapter)