Chapter 778: An Unaffordable Price War

Many Intel directors expressed their incomprehension as to how prices could be reduced so drastically.

"The media outside are exaggerating and saying that China is poor. There may be political reasons for that. But you are all well-known people in society and people with extraordinary knowledge. How can you have such a shallow understanding!" Grover He scolded, "China was indeed very poor once, but since they opened the city, China's economy has been booming!"

"Last year, China's computer market transaction volume was 7.9 million units! We sold more than 5 million chips in China! In the future, I believe that the number will double exponentially every year! China has a population of 1.3 billion. This is A very huge market. If we give up, what we will give up is not just a mere two to three billion US dollars in net profit this year, but perhaps tens of billions, or even hundreds of billions of US dollars!"

Grove said seriously.

"?" Many directors were shocked.

"I'm very serious!" Grove said seriously, "Don't underestimate the Chinese market. This market is very huge and incredible. We must take it seriously!"

Everyone looked at Grove and fell into deep thought.

If this is true, then some caution is warranted. It doesn't even hurt to give away profits.

After all, life is about the long term. Rather than the petty profits in front of you.

"China has a population of 1.3 billion, and its GDP last year was US$863.7 billion! Although compared with the United States, it is only one-tenth of the United States, but it ranks seventh in the world!" Grove said.

Everyone was really shocked this time.

Unconsciously, China's GDP ranks seventh in the world.

The seventh largest GDP in the world, coupled with such a large population. This market is huge!

"We support price reduction!" Many directors nodded.

In the grand scheme of things, these directors are not ordinary people after all, and they are not stupid ignorant people. They also feel sorry for the profit from the price reduction, but if they leave it alone, if the entire market is occupied by Loongson, even in the low-end market, they will suffer huge losses.

In particular, this is not just China. If Loongson is firmly established in China and then enters other markets, you will be in trouble. They were convinced that a formidable opponent had appeared.

Therefore, danger must be nipped in the bud.

Therefore, the market responded quickly.

After the Celeron 2 processor was launched, the price was immediately reduced to an extremely low price of 480 yuan. This price is 100 yuan cheaper than the Loongson 1 generation.

Although it is said that the Loongson 1 generation is 300MHZ, which is better than the Celeron 2 in terms of performance. However, the price difference is 100 yuan, which is very tempting. Moreover, Intel also plans to increase the chip processor frequency of Celeron 2 to 300MHz to cope with this problem.

However, due to inventory pressure, Grove decided to sell out the 233, 266MHz and other chips currently on the market first.

Otherwise, if you transition directly to 300MHZ now, the previous chips will be in vain. Qin Feng will take it back and modify it. But for Intel, the price is too high.

After all, once Intel takes it back, it will be a global market. The chips involved are tens of millions.

This is what the old saying goes: a small boat is easy to turn around.

Qin Feng can recycle it at any time, but Intel can't.

"480 yuan!" Qin Feng was shocked.

This price was a bit beyond Qin Feng's expectations. I didn’t expect Intel to be so ruthless.

"Qin Feng, are we following?" Lei Jun's tone was a little uncertain.

"Follow up! Since they want to play a price war, then keep up!" Qin Feng snorted, "Isn't it just a price reduction? Who is afraid of whom?"

"We sell it for 460 yuan, and then the shipping price is also reduced to 360 yuan!" Qin Feng said.

"360 yuan! Then we will earn 10 yuan!" Lei Jun took a breath.

This is really not profitable. You must know that this price is based on the company’s land cost.

A price calculated after multiple assessments of machine equipment costs, labor costs, etc.

This does not include the huge scientific research expenses. This point is excluded.

As a result, the company now only earns 10 yuan from selling CPUs. How to make money from this? This is less than what those traders earn.

Vendors can earn dozens of yuan by purchasing goods, but CPU OEMs only earn 10 yuan. This can no longer be considered making money, it can even be said to be losing money.

After all, plus the terrifying research expenses, it would be a loss.

"Qin Feng, if this continues, there will be no profit. We still need scientific research, and the funds will not last long!" Lei Jun calculated, "Not counting the investment in expanding production, our funds can last for one year at most!"

Before this, CPU made 50 yuan, which was okay. As long as you sell a lot, it's okay to make small profits but quick turnover. But if it becomes 10 yuan, that won’t work.

If this sells 10 million pieces, it will only make 100 million. It is far from being able to supplement the investment in scientific research and other projects.

"Let's lower the price first! As for the funds, we'll find a way later!" Qin Feng said in a deep voice.

No matter what, we must hold on first.

"Selling it for 460 yuan!" Many bosses at SEG Plaza were also a little shocked by the price. It's a complete avalanche of prices.

Although they, small traders, don't know much, they understand that Intel is a giant with great wealth and power. With such a price war, there is no way Qin Feng can be his opponent.

If this continues, sooner or later Qin Feng will be unable to make ends meet.

Finally collapsed!

However, this kind of thing is something they cannot interfere with. There's nothing they can do. All they can do is help Qin Feng sell more CPUs.

The price war has officially begun!

Qin Feng’s Loongson 1 sells for 460 yuan, and Celeron 2 sells for 480 yuan!

Between the performance of the two, the Celeron 2233 is 50% worse than the Loongson 1st generation 300. The prices are almost the same.

Under such a choice, consumers will undoubtedly choose Loongson.

However, Intel soon lowered the price again, this time reaching the freezing point, with Celeron 2233 selling for 430 yuan!

"Qin Feng, what should I do?" Lei Jun was already trembling, completely unable to control the fear in his heart.

Intel only cut prices a little bit, but it completely killed Loongson's living space.

Celeron 2 is sold for 430 yuan. How much does your Godson sell for?

If it sells for 420 yuan, will the merchant make money? How much do you give the merchant?

"Currently, merchants can still make a profit of 20-30 yuan for Celeron 2CPU in third- and fourth-tier cities. For second-level dealers, the price is about 380 yuan, and for first-level dealers, the price is probably only 360 yuan. About 100 yuan. If we lower the price, I’m afraid there will be no profit at all!” Lei Jun said, “Shall we follow up?”

Is this still going to be followed up? The entire Jiuzhou IT Technology Co., Ltd. is filled with sorrow.

Intel is so powerful! And they are too weak. Not only is the technology incomparable. The price advantage is gone now.

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