Top of the Great Era

Chapter 3184 Surrender
Zhou Shaoning said in a deep voice: "So the situation we are facing now is far more complicated than that of Samsung. Samsung has a strong motivation to quickly reconcile with Ericsson, but we can't. My team has gone through repeated evaluations in the past few days, and we think it is more appropriate to suspend the use of MediaTek and self-developed chips in India."

Zhou Buqi opened his eyes wide, "What do you mean? Really surrender?"

"Surrender will maximize your benefits."

Zhou Shaoning didn't look like he was joking at all.

Zhou Buqi frowned. "In the short term, should we accept the New Delhi court's injunction, refuse to accept Ericsson's proposal, and start a tug-of-war with them?"

Zhou Shaoning smiled and said, "Yes, that's what I mean!"

"Then you need to explain the reason."

Zhou Buqi accepted the gift and agreed to accept Li Zairong's painting. He came to China soon and asked for an alliance to fight against Ericsson, but Kesda chose capitulationism, which made Boss Zhou embarrassed.

Zhou Shaoning said: "The first is Qualcomm. Qualcomm hopes that we can reduce the share of MediaTek and self-developed chips and expand the purchase of Qualcomm chips. In the past year, we have had friction with Qualcomm in many aspects. I think this time... we should make some concessions to ease the relationship between the two sides. They chose to attack us at this point in time, which actually blocked the timing of listing, which can be regarded as an open conspiracy."

"Well, no matter what happens, it doesn't have to interfere with the listing plan."

When Zhou Buqi heard that it was related to the listing, he became cautious.

There are many shareholders behind Astar, and going public satisfies the interests of everyone. If something happens that affects the normal IPO process, many investment institutions will not be able to complete the task targets they set at the beginning of the year.

Once the targets cannot be met, many investors will lose their jobs.

This is the reason for the "power of capital", which is actually the power of the system. It is not that money is deterrent, but that the people behind the money may go crazy.

If you destroy someone's job, they might fight you to death!
It would be fine if Astar had not started the listing process, but now it has started, and investors have included this item in their fundraising, investment and dividend strategies for the new year. Once the IPO is stranded, it will have a huge impact on the capital market, and many large capital institutions will get into trouble.

It's like a woman, either she is aloof and indifferent to her suitors. But after dinner and movies, you go to a hotel with him and he even takes off his pants... At this time, you say you are very traditional and chaste, and it's not surprising that he does something illegal when he gets crazy.

Zhou Shaoning said: "Samsung is different from Asda. The Korean market is very small, and Samsung's self-developed chips are mainly for overseas markets. Ericsson has controlled Samsung in India, and it can do the same in developed countries in Europe and the United States. Samsung has to accept it. We are different."

Zhou Buqi immediately understood what he meant, "In the domestic market, Ericsson's intellectual property rights complaint may not be effective!"

"Not necessarily, but definitely." Zhou Shaoning is very confident about this. "Generally speaking, the patent fees for smartphones around the world are generally between 8% and 10% of the selling price. I am talking about developed countries such as Europe, America, South Korea, Japan, and Australia. It is different in many developing countries, where the patent fees for smartphones generally only account for 3% to 5% of the selling price. In China, it is generally around 4%."

Zhou Buqi nodded. "The more economically developed a region is, the more it values ​​the protection of intellectual property rights."

Zhou Shaoning explained: "This is inevitable. They have the first-mover advantage. The standard patents in those industries are basically controlled by developed countries, and their protection is definitely the strongest. Similarly, the weaker the intellectual property rights of a country, the weaker the protection of intellectual property rights will be. Weakness is in their interests."

"India?"

"India is an exception this time. India has always been poor at protecting intellectual property rights, and is well-known worldwide for this. The reason why it performed so strongly this time must be that Qualcomm and Ericsson behind it have made greater commitments. In addition, India is promoting 'Made in India', and they also hope to restrict foreign mobile phone manufacturers to gain market space for local mobile phone manufacturers."

"Yeah." Zhou Buqi understood what he meant. This really made a lot of sense. "So Estar's domestic mobile phones can actually pay lower patent fees than overseas versions of mobile phones." Zhou Shaoning smiled and said, "That's indeed the logic. However, in patent negotiations, we don't divide regions. We discuss the entire business."

"Ok?"

Zhou Buqi opened his eyes wide.

Zhou Shaoning said: "Mobile phones equipped with MediaTek and self-developed chips cannot be sold in India. It is conceivable that they cannot be sold in developed markets such as Europe, the United States, South Korea and Japan. However, these mobile phones can be sold domestically, and there will be sales opportunities in Latin America, Africa and the Middle East."

Zhou Buqi was delighted. "So even if we refuse to negotiate with Ericsson, we can still mass-produce low-end and mid-range mobile phones equipped with MediaTek and self-developed chips. It's just that these mobile phones cannot be sold all over the world. We have to sell them in countries that do not have strong intellectual property protection. Ericsson can't do anything to us!"

Zhou Shaoning said slowly: "If we negotiate with Ericsson now, it is almost impossible to get any results. Because once the negotiation begins, Ericsson will demand the global market and charge patent fees for all mobile phones produced by Asda that are equipped with MediaTek and self-developed chips. This means that many places that originally did not need to pay patent fees will also be forced to pay patents, just like using Qualcomm chips."

Only then did Zhou Buqi realize why Qualcomm chips were so expensive.

This is a global patent binding!
If we adopt other people's solutions, there will be no global binding patents, and there will be a huge space for evading patent fees. If you are not satisfied, you can slowly talk and strive for it. You have a plan, and I have a ladder.

If you purchase Qualcomm chips, you have to pay Ericsson about $2.5 in patent fees. If you don't use Qualcomm chips, you have to pay $5 in patent fees. At first glance, the difference doesn't seem to be that big.

But in reality, the difference here is not between $2.5 and $5, but between $0 and $5.

In many markets, there is no need to pay patent fees to Ericsson.

What Ericsson is asking for now is not only a $5 patent fee, but also a $5 patent fee for all mobile phones in all global markets. This requirement is a bit too high and is seriously not in the interests of mobile phone manufacturers.

It's not just Estar.

It can be said that all domestic mobile phone manufacturers will encounter such troubles.

The solution is also simple.

Just like Zhou Shaoning said, at worst we can just stop selling to those restricted countries and only sell phones equipped with Qualcomm chips to those countries.

Zhou Shaoning said: "Mobile phones using MediaTek and self-developed chips are usually low-end. There is no market for such phones in developed countries and regions. Where there is a market, the intellectual property protection is not strong enough. This provides us with an alternative."

Zhou Buqi said slowly: "In the field of mid-to-high-end phones, we still have to rely on Qualcomm chips. But in the mid-to-low-end market, it is not impossible to release a few phones with MediaTek and self-developed chips. Just like you said, shard management."

"Yes, shard management." Zhou Shaoning smiled. "In places without a ban, you can sell phones with MediaTek and self-developed chips to avoid the patent fees of Ericsson and other patent holders. You can basically avoid $10 for each phone. In places like India where there is a ban, Qualcomm chips are used. We surrendered to Ericsson and did not confront them head-on."

"This will save a lot of costs every year. So the one that should be anxious is Ericsson. The longer it delays, the more serious the damage to Ericsson will be."

Zhou Buqi thought his ideas were good and complete, and were in line with the style of the domestic IT industry.