Users who pursue quality wouldn't pass on the xphone 1pro, which has much better specifications, only to buy an iPhone 4s at the same price, which is two tiers lower in specs!
This is completely unreasonable.
Under immense product power and cost-effectiveness, the iPhone 4s was caught in a pincer attack by the xphone 1 and xphone 1pro, and its sales plummeting in China were only natural.
This is consumers voting with their money.
But Cook ignored the iPhone 4s's insufficient product power and inflated price, instead venting his anger on his executives, which was truly asking too much.
In response, everyone could only remain silent.
But Cook became even angrier:
"Are you all mute? Every single one of you, usually earning the highest salaries in the world, yet at critical moments, you don't think about how to solve the current crisis, instead you all become mute! Useless, what good are you?"
From the executives' perspective, the decline of the iPhone 4s was a product power issue and should be addressed by the R&D department, not their concern.
But from Cook's perspective, Apple nourished these executives to be fat and complacent precisely to solve problems at critical times, otherwise, wouldn't they be useless?
"Useless, useless!"
Cook cursed furiously:
"From now on, the year-end bonuses for you executives will be tied to Apple's sales performance in the China region. If Apple's sales performance in China is good, you'll get high salaries. If Apple's sales performance in China is poor, every single one of you will go hungry!"
Upon hearing this, everyone's expressions changed dramatically.
This move was too damn ruthless.
Tying it to sales performance in Europe and America would be better than tying it to China!
The xphone 1 and xphone 1pro were both selling well in China, while the iPhone 4s was being thoroughly beaten, it was no match at all.
It could be said that the iPhone 4s's sales in the China region for the first three quarters of 2012 were basically ruined!
Only with the iPhone 5 in the second half of the year, with a comprehensive upgrade, could there be hope for a comeback!
But unfortunately, the iPhone 5 was launched too late, released in September and available in October.
If following previous years' conventions, the iPhone 5 would be in its third batch of launches in China, meaning January of next year.
Then Apple's entire sales in China for 2012 would be ruined, and all their year-end bonuses would also be ruined.
Big trouble!
Immediately, everyone's faces turned pale as they recognized the situation, no longer daring to remain silent.
Instead, they racked their brains, coming up with various countermeasures.
The vice president was the first to speak:
"Chairman, the main reason for the current failure of the iPhone 4s is its insufficient product power, this is undeniable. What we can do is to comprehensively upgrade the next-generation iPhone 5 to catch up with the xphone 1pro!"
Cook nodded:
"That's for sure, the iPhone 5 has already been completely scrapped and redesigned."
There was no other way, the iPhone 5 as originally developed couldn't beat the xphone 1pro anyway!
It had to be scrapped and redone!
The vice president continued:
"However, in previous years, new iPhones were launched three or four months later in China, but today is different. To curb the rise of Xingyi mobile phones, it's necessary for our next-generation iPhone 5 to be first launched in China!"
Cook thought for a moment:
"Yes, this issue is very important. iPhone's market in China has already been taken by Xingyi Technology significantly, and if it's launched any later, it will be even bigger trouble. This year, the iPhone 5 will be launched simultaneously in China, Europe, and America!"
"Chairman is wise!"
Cook's expression remained grim:
"Even if the iPhone 5 is launched first in China, it will still be in the fourth quarter. In the first quarter of this year, Apple was completely defeated in the Chinese market, with sales only a quarter of Xingyi mobile phones."
Everyone fell silent: "..."
Although they didn't want to admit it, they had to.
In the first quarter, the iPhone 4s sold only about 5 million units in China.
Whereas the xphone 1 and xphone 1pro sold 15 million + 5 million, a total of 20 million.
At least 10 million of Xingyi mobile phone's 20 million sales were taken from Apple, and the remaining 10 million were taken from giants like Samsung, Nokia, HTC, and LG.
Not just Apple, all international brands saw their market share in China halved and plummeted this year, all replaced by Xingyi mobile phones.
One general's success is built upon the bones of ten thousand soldiers; it's that cruel.
Cook continued:
"But in the upcoming second and third quarters, we still have to rely on the iPhone 4s. Everyone, think of ways, how can we market it to boost iPhone 4s sales? We can't let Apple go hungry for the next half year, can we?"
"This..."
Everyone fell silent.
Yes, the first quarter was over.
For the iPhone 5 to turn the tide, it would have to be the fourth quarter.
If the current second and third quarters also ended badly, Apple would be in big trouble; even strong iPhone 5 sales in the fourth quarter might not be enough to save it.
The marketing director was under the most pressure and couldn't help but say:
"Chairman, the reason for the sluggish sales of the iPhone 4s in China is still the issue of product power and cost-effectiveness. Xingyi Technology has the xphone 1, a mid-range phone with explosive cost-effectiveness, and behind it, the xphone 1pro, which crushes the iPhone 4s in terms of configuration at the same price. Under this pincer attack, our sales won't be good unless we cut prices for promotions!"
"What? Price cuts for promotions!"
Suddenly, everyone was startled.
Since its launch, the iPhone had always been synonymous with hot sales, and its price had always been firm.
Flagship phones from Samsung, HTC, etc., would drop prices by 20%-30% within half a year of release.
But the iPhone wouldn't drop prices at all within half a year of release, only dropping by 10% after about eight months, and by 25%-30% a year later when the next generation came out.
For example, the previous generation iPhone 4 started at 4999 in China, and only dropped to 3688 when the iPhone 4s was released a year later, a price drop of only 26% after a year on the market!
The iPhone's price was that firm back then.
Now, the iPhone 4s had been on the market for less than half a year, and its official price was still 4988, with no price reduction whatsoever.
Now that the marketing director proposed a price cut, everyone found it incredible.
Even Cook frowned slightly:
"One big reason the iPhone is so popular is its stable price. Once we cut prices, the entire market will plummet. That would be chaos!"
"Exactly, high-end brands can't just cut prices. If we start cutting prices by five hundred or a thousand at will, wouldn't Apple become like Samsung or HTC? That won't do!"
"That's right, brand is fundamental. What Apple sells is not just a phone, but a brand and service."
"I also oppose price cuts. Once we cut prices, the entire market price will collapse."
Listening to everyone's words, the marketing director was extremely speechless:
"Everyone, listen to me, the market price of the iPhone 4s in China has already collapsed!"
Cook's mouth twitched: "..."
Other executives also looked grim: "..."
For a moment, the entire conference room fell silent, full of disbelief as they looked at the marketing director.
The marketing director sighed:
"In China, the official price of the iPhone 4s is still 4988, but do you know what the offline channel price is? How much is it selling for on the market?"
"4900?"
"4800?"
Everyone guessed.
Current iPhone 4s sales in China were poor, and dealer's procurement prices were constantly dropping, barely above 4000.
To sell more, dealers would take a smaller profit, so selling at 4800-4900 was normal.
The marketing director waved his hand:
"No, it's 4500!"
"What?"
Suddenly, everyone in the room was startled.
Cook was even more dumbfounded:
"The iPhone 4s has only been on the market in China for just over two months, and the price has already dropped to 4500? Is it not a gray market price?"
The marketing director shook his head:
"No, I just sent people to investigate. The current price of the Chinese domestic version of the iPhone 4s is 4500. The gray market price is even lower, only 4100."
Cook fell silent: "..."
Other executives were also stunned: "..."
They couldn't imagine that the market for the iPhone 4s in China was so bad.
It launched in China in January, and it had only been a little over two months; normally, it would be a hot selling period.
Let alone the price dropping to 4500, in previous years, prices would have been inflated!
That's right, last year's iPhone 4 was sold at a premium at this time, or bundled with a 168 tempered film and a 188 protective case, it was impossible to buy at the original price.
This year, it's different.
Not only is it available in stock and sold as a standalone device, but the price has also been directly reduced by nearly 500.
The problem is, even at such a low price, sales are still terrible!
It's simply unbelievable.
The marketing director was very melancholic:
"There's no other way, Xingyi mobile phones are impacting us too severely. Our iPhone simply can't compete. Even with offline channels dropping the price to 4500, sales are still mediocre. If our official price doesn't drop, it will be even harder to sell at 4988!"
Cook pondered for a moment, then sighed:
"Alright, then cut the price. An official direct drop of 500!"
Upon hearing this, everyone's expressions changed dramatically, and some even said:
"Chairman, once the official price drops from 4988 to 4488, the offline market price will follow suit. Then it won't be 4500, but will fall below 4000!"
Cook waved his hand:
"There's no other way. In China, with the xphone 1 and xphone 1pro in a pincer attack, the iPhone 4s has no future without a price cut. We can only exchange price for volume. After all, the iPhone 5 won't be released for another half a year, and we can't afford to go hungry."
Other executives also spoke up:
"That's right, if we don't cut prices, sluggish iPhone 4s sales are a small matter, losing the Chinese market is a big one. China has 1.4 billion people, such a huge market, if it's all snatched away by Xingyi mobile phones, that would be the end of Apple!"
"And stock price also needs to be considered. Affected by Xingyi Technology, iPhone 4s revenue in China has plummeted, which has already caused Apple's stock price to plummet. If we don't cut prices for promotions, it will continue to plummet."
"Moreover, Xingyi Technology's xphone 1pro has just launched and is still in short supply. Our iPhone 4s dropping its price by 500 can take advantage of the xphone 1pro being out of stock to snatch a wave of customers!"
"Yes, then cut the price. An official direct drop of 500 in the Chinese market, let's boost sales first."
Cook made the decision directly.
The subordinates who had previously objected also nodded one after another, and some even asked:
"Should other regions like Europe and America also follow suit and cut prices?"
Cook pondered for a moment, then shook his head:
"Regions like Europe and America have been on the market for nearly half a year, and the iPhone 4s price has already dropped quite a bit. There's also no impact from Xingyi mobile phones, so there's no need to follow suit with a price cut. Just slowly reduce it according to the original market trend."
In China, the iPhone 4s was only launched in January, starting at 4988.
Originally, Cook planned for the first wave of price cuts to begin in May, dropping to 4488.
Then drop to 3988 in September, paving the way for the launch of the next-generation iPhone 5.
When iPhone 5 production was abundant next January, it would be launched in China, and the iPhone 4s would directly drop to 3688 to clear inventory.
This perfectly seamless transition would also allow for continuous harvesting of Chinese users.
But now, everything had changed.
The iPhone 5 had to be launched early in China, as a first batch launch.
The iPhone 4s also had to undergo a large-scale price cut two months in advance!
These were all unavoidable circumstances.
And the initial cause of all this was Wang Yi, because of Xingyi Technology!
When Cook thought of this, he felt anxious:
"F***! Last year Apple was smooth sailing in China, but this year it's directly hell mode!"
"It's all Xingyi Technology!"
"Damn it!"
But Cook had no other good strategy for this, only a major price cut for the iPhone 4s and a significant upgrade for the iPhone 5!
The next day, as soon as Wang Yi woke up, he received a call from Zhu Changlin:
"Chairman, something big has happened."
"What's wrong?"
Wang Yi said calmly.
"The iPhone 4s has had a full-line price cut of 500 and has started promotions to grab market share!" Zhu Changlin said somewhat anxiously, "The 4988 iPhone 4s couldn't beat the xphone 1, nor could it beat the xphone 1pro. But now that it's dropped to 4488, it's only about 1200 more expensive than the xphone 1. With such a small difference, many Apple fans will abandon the xphone 1 and choose the iPhone 4s!"
Wang Yi nodded, agreeing strongly.
Before, the difference was 1700, plus the 300-value biennial membership, making the difference almost 2000.
With such a large gap, most users would choose the xphone 1, which caused iPhone 4s sales to collapse domestically.
But now that the iPhone 4s has a direct price cut of 500, the price difference is reduced to less than 1200, and even with the gifted membership, it's only 1500, not to mention many people don't want the membership.
Thus, with a smaller gap, those people would spend an extra 1200 yuan to buy an iPhone 4s.
After all, the iPhone's accumulated brand influence and fan base over several generations are still formidable.
Wang Yi took a deep breath:
"We have to follow this wave, but the xphone 1pro has just launched, so we can't cut its price. We'll use the xphone 1 to compete with the iPhone 4s. They cut by 500, right? We'll also follow, we'll cut by three hundred!"
"But we can't directly cut prices. If we directly cut prices, users who bought within the last week will complain and demand compensation."
Wang Yi recalled that many such situations had occurred in his previous life.
If the official announcement was a 300 yuan price cut on the 21st, what about those who just bought on the 19th and 20th?
If there's no refund for the price difference, they certainly wouldn't be happy.
After all, some phones were still in transit, not yet received, and then the price drops by 300, consumers would definitely be angry.
If a refund for the price difference is given, that's even more troublesome.
If those who bought on the 20th get a refund, those who bought on the 19th must also get one, and those who bought on the 18th, 17th, 16th, all the way to the 13th, would all have to get refunds, which would be a huge headache.
Even if all were refunded, those who bought on the 12th and 11th would still have grievances.
More importantly, once this precedent is set, all subsequent price cuts would require similar refunds.
The cost is too high.
Things became very troublesome; not refunding the price difference was not an option, but refunding it was also not an option.
Wang Yi frowned slightly, then his eyes lit up:
"We won't directly cut prices, but rather make a disguised price cut."
"Disguised price cut? What does that mean?"
Zhu Changlin was confused.
Wang Yi smiled faintly:
"The xphone 1 will launch a new standalone device package that no longer includes the 360-yuan Xingyi Video and Xingyi Music biennial membership, thus the standalone device series will have a direct price cut of 300, with the 16G version starting at 2999. The package that includes the biennial membership will still start at 3299!"
Zhu Changlin beamed:
"That's a great idea! This way, the price difference for the standalone device remains at 1500, so the xphone 1 still has a huge advantage. Especially users who don't need the membership, and those who already have a membership, will prefer the standalone device package. And those who need both memberships will still directly purchase the dual membership package."
Wang Yi smiled slightly:
"And this disguised price cut won't cause too much resentment among old users. After all, the membership package is still 3299. But the iPhone 4s dropped its price by 500 yuan all at once, so consumers who just bought it for 4988 recently will curse. Just wait and see, Apple is going to have trouble."
"Glad to hear it, hahaha. They've dug a hole for themselves!"
Zhu Changlin also gloated.
"By the way, how are the industrial chain inspections going?"
Wang Yi changed the subject.
Zhu Changlin elaborated:
"BOE's progress here is quite good, and its potential is also good. Although there's still a gap compared to Sharp and Samsung, it's sufficient for thousand-yuan phones, and the cost is much cheaper. A 720P screen assembly only costs 100 yuan!"
Sharp's 720P high-resolution screen assembly had a market price of over 230 RMB last October.
Wang Yi bought a lot, so the initial price was suppressed to 180 yuan, and this year it dropped to 150 yuan.
And now, BOE's 720P screen assembly only costs 100 yuan!
This price is similar to the price AUO gave to Redmi 1S in his previous life.
However, Wang Yi's volume is large, so suppressing it to 80 yuan is also possible.
"Are the screen quality and user experience okay?"
Wang Yi asked again, if there were fatal flaws affecting the actual experience, that would be big trouble.
"No problem. I've experienced it several times. Compared to Sharp's screens, professionals can feel a generational gap. For ordinary users, the difference is limited and doesn't affect normal use."
"That's good, then negotiate the price again, ideally pushing it down to eighty yuan, guaranteeing orders of over 50 million sets!"
"Okay, Chairman, I'll also check out a few other companies and compare them."
"Mhm."
Soon, a piece of news once again caused a sensation across the internet:
[xphone 1 launches a standalone device package without membership, with a direct price cut of 300, starting at 2999 for the 16G version!]
As soon as this news came out, it caused another sensation across the internet:
"A disguised price cut, a direct 300 drop. A phone better than the iPhone 4s, for less than 3000 yuan, it's time to get one."
"Cried, just bought the 3299 xphone 1 yesterday, today it's 2999."
"It's nothing, the biennial membership is worth 360, you only spent 300 more, not a big loss."
"That's true, even with the standalone device, you'd still need to get a Xingyi Video membership."
"I also chose the 3299 dual-membership version."
"I bought the xphone 1 last month, didn't use the dual membership, sold it for 250, so I only lost 50 yuan, no big deal."
"I bought an iPhone 4s yesterday for 4988, today it's 4488, darn it, five hundred yuan, sh*t!"
"Same misery, want to return it."
"Rubbish Apple, a 500 yuan price drop in one day, old users are worse than dogs!"
"The iPhone 4s's price drop is a bit fast, it feels like it's fallen from its pedestal."
"No choice, with xphone 1 and xphone 1pro selling well consecutively, the iPhone 4s isn't selling, so it can only cut prices."
"That's right, xphone 1 and xphone 1pro combined sales exceed 25 million, while iPhone 4s only sold 5 million domestically. If they don't cut prices, even fewer people will buy it."
"Holy cow, so that's it, the iPhone 4s is selling that poorly?"
"It's not just bad domestically, it's bad internationally too. Foreigners would rather spend 5000 to buy a gray market xphone 1 than an iPhone 4s."
"It seems consumers' eyes are sharp; the iPhone 4s is just garbage."
"Even foreigners don't think much of the iPhone 4s, why should we spend that extra unjustified money? If you have the means, go directly for the xphone 1pro. If you don't want to spend too much, isn't the 2999 xphone 1 even better?"
"Exactly, 2999 and 4488 have a difference of nearly 1500, the xphone 1 is still more cost-effective."
"What does 1500 mean? You can buy another xbuds and still have five small BBQ meals!"
"6, I'm going for the xphone 1, less than three thousand, really cheap."
"My hometown is in the Northeast, I must have xphone 1, iPhones tend to freeze and shut down."
"I'm going straight for the xphone 1pro, the world's first quad-core, 2G RAM, dual 8-megapixel cameras, 3000 mAh anti-freeze large battery... The iPhone 4s simply can't compare."
...
Suddenly, sales of the xphone 1pro and the discounted xphone 1 surged again.
Especially the xphone 1, with the 16G version directly dropping below 3000, making its cost-effectiveness unbeatable.
The iPhone 4s, however, was different.
Although its sales also increased somewhat, the increase was not significant.
After all, even with the iPhone 4s dropping to 4488, it was still half as expensive as the xphone 1, not to mention the latter had higher specifications!
So users seeking cost-effectiveness directly went for the xphone 1.
And users seeking high quality went for the xphone 1pro, the world's first quad-core phone.
As for the iPhone 4s, it was neither high-end nor low-end, stuck in the middle, growing slowly.
The next day, Cook looked at the backend data, his expression extremely grim:
"The iPhone 4s only sold 150,000 units in China yesterday? That little?"
Cook was confused, thinking he had misread, but after rubbing his eyes, it was still 150,000!
"How could this be?"
Cook was dumbfounded, even questioning reality:
"We cut the price by 500 all at once, shouldn't Chinese consumers be completely excited and buy like crazy? Like Xingyi mobile phones, selling millions in a day? Why did we only sell 150,000 units? Only half more than before? This isn't scientific!"
The vice president sighed:
"Chairman, we just cut prices, and Xingyi Technology also followed suit. They dropped the xphone 1 to 2999."
Cook's mouth twitched: "..."
"Shameless, truly shameless, their xphone 1 is selling so well, why do they have to cut prices too? Is it necessary?"
Cook was utterly speechless:
"With the xphone 1's super high specifications and extreme cost-effectiveness, even without a price cut, they wouldn't have trouble selling. Why insist on cutting prices? Are they willing to earn less just to kill us off?"
The vice president nodded:
"It must be so. Wang Yi would rather earn 300 less per phone than let our iPhone 4s sell well!"
"Sigh!" Cook sighed, "This Wang Yi guy, to be able to do this, he's a talent, I underestimated them!"
The vice president's expression was extremely complex:
"But our situation is troublesome. The xphone 1 followed with a price cut, still maintaining a huge cost-effectiveness advantage, which means our iPhone 4s's price cut was in vain, and it's still selling poorly. There will still be trouble later, unless we continue to cut prices!"
"No, absolutely not!" Cook decisively waved his hand, "This price cut, has the iPhone 4s's channel price in China collapsed?"
The vice president nodded:
"For some channels, the price of the iPhone 4s 16G version has already fallen below 4000 today."
Cook was aghast: "..."
"So, we can't cut prices anymore. If we continue to cut prices, Xingyi Technology will follow, and the iPhone 4s will still not sell well. It's meaningless."
Cook's expression was complex:
"Wang Yi's strategy is very clear: use the xphone 1 to fiercely compete with our iPhone 4s, while the pro version, the xphone 1pro, maintains a high price, positioning itself as high-end. Of course, we cannot continue to cut prices. Let's think of other ways."
"Okay."
At this moment, the customer service department director rushed in urgently:
"Chairman, something big has happened."
"What now?"
Cook frowned slightly.
The customer service department director explained in detail:
"Our direct price cut of 500 across the China region has caused customers who bought at the original price in the past half-month to be very dissatisfied. They are demanding compensation and a refund for the price difference!"
"..."
Cook's mouth twitched, feeling even more indignant:
"Price cuts are common, why should we refund the price difference?"
"And Xingyi Technology's xphone 1 also cut prices, why don't they refund the price difference? Why aren't their users making a fuss?"
The customer service department director sighed and could only explain:
"Chairman, Xingyi Technology's xphone 1 didn't directly cut 300. Instead, it launched a standalone device package without the Xingyi Video and Xingyi Music biennial membership, priced at 2999. The biennial membership package version still starts at 3299. Plus, the biennial membership is worth 360, so users who bought recently haven't made a fuss."
Cook's mouth twitched: "..."
(End of chapter)