“Are you trying to tell me that within a month, we've regressed to last year's—no, the year before last year's level!” Edward Zamp roared at his subordinates. Those around him dared not speak, but clearly agreed.
Of course, whether they agreed or not was meaningless; the hard sales figures were right there.
Throughout October, Motorola's monthly mobile phone sales were 1.2 million units!
This number might seem quite good, as a mobile phone manufacturer with annual sales of 1.2 million units could rank in the global top 10. However, it was a drop of nearly 1 million units from the end of last month.
Compared to the month before last, it was even worse, a decline of over 2 million units. It was even below the same period last year, roughly at the level of the year before last.
What was the level of the year before last?
That was when Motorola was on the verge of bankruptcy. The previous president's Iridium project had drained the company significantly, with vast sums of money poured into a bottomless pit, while mobile phone sales plummeted. This ultimately led the entire enterprise into crisis, and the board of directors directly removed the president.
It's important to remember that Motorola had always been controlled by the founding Galvin family for over 100 years, with their influence deeply rooted within the company.
Yet, such a president was replaced by the board due to poor performance, which illustrates just how dire Motorola's situation was at the time.
The reason they chose Edward Zamp was that he had confidently declared he could lead Motorola back to its peak. Indeed, everything seemed so promising in early 2004. The hot sales of the Motorola RAZR put Motorola back on the right track. He even made a bold prediction of breaking a hundred million units in sales at a board meeting. Now, however, everything had regressed to the level of the year before last.
The worst part is that this was just the October performance report, and it was already November. According to the data currently available, sales in November might be even worse.
“Sir, the enemy's tactics were too vicious this time. Who could have imagined they would slash prices to this extent?” a subordinate said helplessly.
“Stop making excuses for yourselves. Don’t you have any problems? What have you been doing for the past month? Not only have you failed to secure a mobile game center, but you also didn't even notice a new competitor appearing!” Edward Zamp yelled angrily.
Indeed, Edward Zamp was now like a firecracker, easily ignited.
“Boss, it’s not just us. This time, Nokia, Samsung, and virtually all mobile phone companies are facing the same situation: a sharp drop in mobile phone sales. All these sales have been snatched by that Zhongmi phone! They sold 15 million units in October alone.”
“They’ve simply stolen all of our entire industry’s sales.”
“Exactly. The entire industry is basically in the same situation. I think the board should be able to understand. After all, such a situation is not something humans can reverse, unless we drastically cut prices!” everyone tried to persuade him.
Hearing that the entire industry was in the same predicament, Edward Zamp’s expression improved considerably.
In fact, Edward Zamp also understood that his subordinates couldn't be blamed this time. After all, no mobile phone manufacturer could withstand a phone selling for only $240, not even Motorola, no matter how divine it was, could withstand such business competition!
“Have you investigated the forces behind this Zhongmi phone?” Edward Zamp asked. “This definitely couldn’t have been orchestrated by a small mobile phone enterprise. Don't tell me it's remnants of Beidou phones; I know those trash better than anyone. They absolutely couldn't have come up with such a phone and such a price!” xxs壹贰
“Yes, although it's not comprehensive, the basic information has been found. About two months ago, Beidou Mobile Communications was acquired. The current controlling chairman is a Chinese person named Lei Jun, who has a mobile phone company called Xiaomi in China, currently ranking second in market share in the entire Chinese market! This is also an old opponent of ours!” the subordinate introduced.
“It’s this Xiaomi again!” Edward Zamp touched his bald forehead, sighing. It was too miserable. He used to have a few strands of hair, but now it was completely bare.
Edward Zamp actually knew Xiaomi very well. Although he had never really taken the Chinese market seriously, the profits from the Chinese market were truly substantial, contributing hundreds of millions of dollars in profit to Motorola each year.
For such a cash cow that could grow without much effort, even if he didn't pay much attention to it in normal times, he would get upset if someone stepped on it.
And Xiaomi was the one who stepped on it. With its low-price strategy, it had forcefully pushed Motorola from second place in China to fifth, with sales also steadily declining, and was on the verge of dropping to sixth place, being overtaken by other Chinese companies.
“All the Chinese manufacturers are accomplices of Jiangnan Group; they are all their subordinates!” Edward Zamp quickly declared.
In his view, these were clearly the running dogs of Jiangnan Group, rising through the ranks with low prices, relying on the vast industrial chain behind Jiangnan Group.
“Yes, we also believe Jiangnan Group is behind this. According to intelligence from some of our friends within China, Jiangnan Group held a banquet, and their chairman Huang He personally attended the banquet shortly after he returned to the country. After that, a large number of Chinese enterprises came to the United States to occupy the market. Therefore, we have reason to believe this is a conspiracy by Jiangnan Group!”
“What conspiracy?” Edward Zamp’s expression changed.
“His conspiracy to completely dominate the global mobile phone market!” the subordinate said. “Jiangnan Group publicly announced that they would not release any new mobile phones, leading us to underestimate their threat. But in reality, they secretly introduced their own domestic mobile phone companies, letting these companies charge into the market on their behalf, capturing market share, while we relaxed our vigilance.”
After following Edward Zamp for a long time, these subordinates had fully mastered the art of shifting blame, which was to directly blame Jiangnan Group and Huang He. There was no mistake in that.
But this time, they guessed correctly; this was indeed boss Huang’s calculation.
“Those insidious bastards, I’ll make them pay!” Edward Zamp grumbled, and everyone else cursed along with him.
Of course, this was of no use. After a while, Edward Zamp calmed down and asked, “Facing this situation, do you have any countermeasures?”
“There’s no way, we can only lower prices. If we don't lower prices, we will lose most of the market!” a subordinate said.
“Lowering prices…” Edward Zamp’s expression was somewhat contorted. This was the decision he least wanted to make, because lowering prices would lead to reduced company profits, which would then lead to reduced dividends for the board of directors, and then widespread anger.
But at this moment, not lowering prices was not an option; without lowering prices, the phones simply wouldn't sell.
“What do you think we can lower the price to?” Edward Zamp finally asked reluctantly.
“I think we can completely lower it to around $800. Just a price reduction of about $100 will not cause too much loss for us!”
“Reducing it by that much is no different than not reducing it at all. I think it’s better to lower it to $700; the price will be more attractive!”
“Forget it, compared to $240, $700 and $800 are pretty much the same. In my opinion, we might as well go all out and lower it to $500. With our brand, we should be able to regain a lot of market share. After all, many Americans still don't trust Chinese brands; they trust products manufactured in the United States more!” the subordinates argued amongst themselves.
“Stop! What $500? Do we still need to consider our costs?” Edward Zamp’s face had already turned red when he heard about lowering it by $100, and then green when it was lowered by $200. Now, lowering it to $500 would probably turn him completely black. He interrupted their discussion.
“Sir, I calculated it immediately. If we use components produced by Chinese people entirely, our actual production cost can be reduced to around $420. Therefore, a selling price of $500 can still yield a certain profit, and this is also a way to attract users to buy Motorola phones again, as our brand value is not comparable to guys like Zhongmi!”
“……” Edward Zamp fell silent, hesitated for a moment, and then shook his head, “It’s useless. The board won’t agree to such a demand. They’ll just tear us apart!”
Edward Zamp’s words caused everyone to fall silent. After further deliberation, they all agreed that lowering the price to $700 was a price the market could accept.
But they all knew in their hearts that just a $200 reduction still left a huge gap compared to Zhongmi. Such a price reduction was meaningless.
Yet, beyond this, they were truly helpless and had no other solutions.
A similar situation occurred in the meeting rooms of Nokia and Samsung. Everyone was discussing price reductions, but the reduced prices were still so arrogant and unattractive that they couldn't compete with Zhongmi!
At this moment, these white men realized that when faced with price, many things were truly fragile.