Chapter 212: Chapter 189: 3999 Yuan? That’s Freaking Expensive! I Think It’s Expensive Too

Xucheng, Sky Garden. The launch event for the new Orange Mobile Phone.

The moment Wang Teng finished speaking, flashes started going off incessantly in the media section. All lenses were aimed at the big screen, where the 799 yuan price was incredibly conspicuous.

"799 yuan?"

Yu Chendong from Huawei was stunned for a moment, his mouth hanging open. His thoughts were suddenly a jumbled mess.

The Motorola XT883, which had similar specs, was launched last August. It also had a 4-inch screen, 512MB of RAM, and 8GB of ROM, and it launched at 1499 yuan.

Admittedly, there was a significant gap in their processors. The Orange D1 used a MediaTek MT6573, which was just a 650MHz single-core processor, while the Motorola XT883 was equipped with a 1GHz processor.

Yet the Orange D1 was only half the price of the Motorola XT883.

With these specs and this price point, the Orange D1 would be completely unrivaled in the low-to-mid-range market.

Yu Chendong mentally calculated the bill of materials. Even with DST stepping in to help Orange Technology optimize its supply chain pricing, the Orange D1’s hardware cost had to be at least 400 to 450 yuan.

Factoring in the costs for R&D, sales, after-sales service, shipping, and administration, the phone’s gross margin could be 10% at most.

’So Orange Technology is planning to go all the way with this strategy. I thought that when the Orange C1 offered the specs of a 2999 or 3999-yuan phone for just 1999 yuan, it was just a temporary low-price tactic to grab market share.’

’Once they established a foothold, I figured they would launch new products with higher gross margins.’

But with the Orange D1’s pricing, Yu Chendong saw no sign of that trend.

After a moment of thought, Huang Zhang of Meizu relaxed his furrowed brow. The Meizu MX was priced at 2999 yuan, not in the same price bracket as the Orange D1. Its specs were also far superior, so of course he wasn’t worried.

However, Chen Yongming of OPPO and Guo Yingde of Coolpad, who were seated nearby, looked troubled. The launch of the Orange D1 would inevitably have a severe impact on both companies’ low-to-mid-range models.

Their companies sold phones with similar specs for around 1500 yuan, but Orange Technology was only asking for 799. ’How are we supposed to compete with that?’

The two of them looked at Wang Teng, grinding their teeth in frustration.

Lei Yijun silently glanced around, taking in the complex expressions on his competitors’ faces. He then turned his gaze to the calm and composed Chen Yansen and couldn’t help but ask, "President Chen, the price of the Orange D1 is... it’s too low. You’re forcing Coolpad, Lenovo, and ZTE to slash their prices. That’s brutal."

Too low?

Brutal?

Chen Yansen smiled and thought to himself, ’When you used the Redmi phone to conquer the consumer market, you didn’t seem to care whether your competitors lived or died.’

"President Lei, we’re all in the same business. You can calculate the bill of materials for the Orange D1 yourself. Smartphone shipments last year exceeded 80 million units, more than double the volume in 2010. The procurement prices for screens, chips, batteries, cameras, casings, and circuit boards are all dropping. We can still turn a profit at 799 yuan."

Chen Yansen replied in a calm, measured tone.

Hearing this, Lei Yijun shook his head with a sense of resignation, unable to say anything more.

After all, in the eyes of Chen Yongming, Guo Yingde, and Yu Chendong, he and Chen Yansen were cut from the same cloth—the shit-stirrers of the mobile phone industry.

Their business strategies were largely the same: intentionally lower their gross margins on hardware to capture market share, then leverage economies of scale to make money from software.

Their hardware gross margins were typically between 5% and 10%.

What Lei Yijun didn’t know, however, was that Orange Technology had leveraged DST’s network and its own shipment volume of 11.25 million units to negotiate even lower procurement prices from manufacturers like MediaTek, Jingdongfang, and Desai.

In reality, the bill of materials for the Orange D1 was only 390 yuan.

On stage, Wang Teng clicked the remote, and the image on the large screen behind him changed instantly.

The large CG render of the Orange D1 vanished, replaced by a new smartphone with an oversized screen and an ultra-thin body.

"The Orange C2! Continuing the legacy of its predecessor’s ultra-high performance, it is only 8.6 millimeters thick with a bezel of just 3.9 millimeters. And just like the Orange C1, it features system-wide gesture controls.

It’s equipped with a Qualcomm Snapdragon MSM8260 dual-core processor and a 4.7-inch AMOLED touchscreen for faster response times and lower power consumption."

Wang Teng then announced the name of the second new product.

The image behind him changed, showing a coin standing on its edge next to the phone to provide a reference for its thickness and bezel width.

For its screen, the Orange C2 used a higher-performance AMOLED display. This was the latest product released by Jingdongfang at the end of last year, designed to compete with Mountain Star’s Super AMOLED Plus touchscreen.

Although Jingdongfang’s yield rates and production costs were worse than Mountain Star’s, they were determined to win Orange Technology’s business, so they offered a supply price of 260 yuan per unit.

This was even 10-20 yuan cheaper per unit than Mountain Star’s price.

The material cost for the screen alone was comparable to that of a single Snapdragon MSM8260 chip.

Upon hearing this, Lei Yijun instantly understood: Orange Technology was finally setting its sights on the high-end market as well.

"The standard version comes with 2GB of RAM and 16GB of storage. It supports 1080p full-HD video playback and recording, features a 16-megapixel rear camera and a 5-megapixel front camera, runs on our Aurora OS 1.3, and is powered by a 2620 mAh battery with fast-charging support."

Wang Teng continued.

Speaking from an engineer’s point of view, he gave a detailed explanation of the industrial design principles behind Orange Technology’s fast-charging technology. To ensure safety and stability, they added a dedicated charge management system and multiple protection mechanisms, such as overvoltage, overcurrent, overheat, and short-circuit protection.

Wang Teng’s tone was earnest. When discussing the Orange Mobile Phone’s exclusive patents, he would walk the audience through the entire process, from the initial design to the final product, which naturally inspired a strong sense of trust.

In terms of appearance, the aesthetics of the Orange C2 were on par with the HTC One X and the Sony LT26i. It even looked more futuristic than the Apple 4S.