Reborn Entrepreneurial Giant.

Chapter 150 Opportunities between Honor and Qualcomm

Qu Li Chen Danlin has lived a good life. There are still many people in the south who are suffering from disasters, but he really has no choice. Jumei donates the convenience food they have stored, arranges uniform vests for the staff, and arranges volunteers to assist The staff can do more than sort out the dense flow of people at Yangcheng Railway Station.

Disaster relief cannot be done, but self-rescue can still be done. People from Jumei went to Jiangsu and Zhejiang to contact OEM companies a few years ago. The advantages of the information system became apparent at this time, which can save the people responsible for this work many trips.

As the big boss, Qu Li, of course, does nothing. He can only use his mouth to control the situation.It's not that he doesn't want to go back, but there is news from Qualcomm that he wants to cooperate with Honor. How dare Qu Li not pay attention to such an important matter.

There was some news in China last year. For example, the Ministry of Industry and Information Technology intended to abandon 3G and wait for Huawei and Vitex to gain certain patent advantages before moving directly to 4G. This sparked quite a discussion.

Nokia, Ericsson, including ZTE Huawei, all went to the Ministry of Industry and Information Technology to inquire, and some semi-official organizations expressed close concern.Domestic news has changed that telecom companies will abandon 2G and 3G licenses and go all out to develop 4G. At this time, China Mobile and China Unicom are afraid. If this is really the case, telecom companies will not have the burden of old users and go all out to develop 3G or 4G networks with superior performance. The new user experience will far exceed that of China Mobile and China Unicom...

In the end, the Ministry of Industry and Information Technology could only come out to refute the rumors, saying that they had never had such a plan, and the matter ended in nothing.

At this time, Honor successively reached patent authorizations with Motorola, Nokia, and Huawei, which basically filled up the patent obstacles for overseas sales, and sales and reputation were very good.With the blessing of Google, the exposure even exceeds that of Apple iPhone.Seeing this, Qualcomm is more optimistic about Honor's future, and will naturally attach importance to cooperation with Google and Honor.

The senior vice president of Qualcomm came to Beijin to discuss cooperation with them this time. It was mainly about patent issues and chip cooperation. This stopped annoying me. Do you think WCDMA has Qualcomm patents?The answer is of course yes, but Honor does not produce CDMA/CDMA2000 mobile phones and does not use them much. Even if Qualcomm tries its best, it is impossible for it to pay a patent fee of 5% of the selling price of the mobile phone.

"For us, the best option is to independently develop mobile phone chips. Once we use Qualcomm chips, we will lose our long-term competitive advantage..." Although Qu Li knows that Qualcomm cannot be avoided, he still wants to get the best for himself. .

"We have now raised US$3 million in cash, and we can develop our own chips. If that doesn't work, we will give up on the CDMA line, unless Qualcomm can make us more money and leave us a way out."

"What back way?"

"After our strategic cooperation agreement expires, if it is not renewed, Qualcomm will automatically grant us or entrust other chip design companies with the right to design and produce CDMA/CDMA2000 baseband chips..."

Texas Instruments and Nokia have been good friends for more than ten years, but now they are in trouble. Coupled with Google's help, Honor, a start-up mobile phone company, can get their latest mobile phone SOC chip at the first time.

But at this time, Texas Instruments was still extremely powerful. Honor lacked bargaining power and could not even guarantee the timeliness of chip supply, which forced him to consider other chip companies.

But at this time, apart from Qualcomm, the only ones in the world that can provide mobile phone SOC chips are Samsung chips chosen by Apple’s iPhone.In this case, do you think Qu Li should choose Samsung or Qualcomm chips?There are other mobile phone SOC companies at this time, so sorry, who cares about chip brands that are destined to disappear.MediaTek doesn’t even have the upper hand now. They only joined Google’s Open Handset Alliance in July 2010.

Qualcomm is strong here. Last year they launched their SOC chip with integrated baseband, which is ahead of the times and peers in promoting smartphones.It's a pity that the most powerful Texas Instruments, which is moving faster, is preparing to give up the mobile phone baseband chip business on the eve of the industry's outbreak. You call it nonsense.

Qualcomm will not agree to Honor's request. If Honor licenses the CDMA patent to Texas Instruments, wouldn't it create a formidable enemy out of thin air?Sitting on the CDMA patent, they sit firmly on the Diaoyutai.The only thing I was afraid of was someone flipping the table. Later, such a big man appeared in India. He gave up 2G and 3G networks and went directly to 4G mobile phones, saving a lot of patent fees. Only low prices can create the light-speed rise of India's mobile Internet.

Moreover, Qualcomm also knows that the Ministry of Industry and Information Technology seems to be discussing letting Telecom be responsible for a pure TD network, which shows that everyone is aware of the impact of telecommunications technology progress on the industry. No matter how strong 2G technology is, it will be replaced by 3G sooner or later.

What Qualcomm doesn't know is how much influence Honor has in the domestic telecommunications industry. Their investigation doesn't seem to have anything to do with it, but why can it influence upper-level decision-making?

Business cooperation is not just the cooperation itself, but also involves various interests and strategic considerations. For example, Apple acquired the well-known headphone brand Beats for US$30 billion, but in the end it sacrificed it to create Apple's AirPods.

The negotiation between Honor and Qualcomm is: within a certain period of time, Honor will use Qualcomm chips as the only choice and develop together.Honor does not restrict Qualcomm from cooperating with other mobile phone brands, but in return it will give it the most favorable patent licensing fee and CDMA IP licensing.This authorization is limited to your own use. If you use it for other brands, you will have to pay additional patent fees.

Honor mobile phones are basically successful. Signing such a contract with Qualcomm involves huge risks and loses initiative. However, the interests of both parties are deeply bound and can help Qualcomm open up the big track of smartphones.

The negotiation process is very complicated. There is a lot of pressure from the board of directors. Honor internally does not fully understand Qu Li’s intentions. In a word, the risk is too great!

"Which mobile phone company in the world can avoid Qualcomm in the 3G era? Who is most likely to create a fully Netcom mobile phone? How much cost can a global mobile phone reduce for us from design, production to sales? How many competitors can it defeat?"

"But other companies can also buy Qualcomm's chips..."

"Who is willing to make such a big sacrifice in exchange for an opportunity in the future that is not restricted by Qualcomm? This is the big weapon I have prepared for my glory in five or six years..."

"Isn't it worth it? What if I can't hold on until that time..."

"Are there many similarities between smartphones and PCs? If I had a choice, I would prefer to develop chips and operating systems myself, but this is not possible for the time being. We are a start-up. It is not easy to have a good start, and it will take time to accumulate. "To bring out more advantages..." Qu Li was very tired. It was difficult to convince them on these issues without professional technical background: "Texas Instruments' SOC chips are good, but as the market leader, they don't take us seriously. Our Did they actively resolve the problem?"

"Qualcomm should cooperate with us before becoming the boss. These few years are a critical period for Qualcomm and us. By laying the foundation in the early stage and establishing brand influence, we may be able to achieve mutual success and become the Texas Instruments and Nokia of the next decade." …”

Under Qu Li's strong request, everyone was still persuaded, but it was easy to convince others, but difficult to convince Qualcomm. They were sitting firmly on the Diaoyutai and in an invincible position. How to persuade them?Perhaps there is only one way, and that is sales volume. Sales volume of hundreds of millions is the most impressive thing.

“As a premise, the global sales volume of Honor smartphones exceeds that of Nokia. If this condition is met within 10 years, the Qualcomm CDMA/CDMA2000 patent licensing agreement will be automatically activated..."

"It's not 10 years, it can only be 5 years."

"Five years is too short. This is unrealistic. It must take 5 years!"

"Many patents will expire in 10 years..."

"We use Qualcomm's 10G patents 2.3.4 years later as the target."

"That's not possible, it's impossible."

The negotiations at the beginning were outrageous. This was just testing each other, but since they can be negotiated, it proves that Honor mobile phones have taken a big step forward in getting rid of the Qualcomm tax.