Lei Jun: The key to the development of mobile Internet is not that the application is a mobile phone.

Xiaomi Technology CEO Lei Jun held a wonderful keynote speech at the "2012 China Internet Conference Press Conference" held today and shared the three major development trends of smart phones with everyone.

Lei Jun said that from the development of the Apple iPhone and the rapid occupation of the market and breaking through the mobile Internet, we began to realize that "the key to the development of the mobile Internet is not to make very mysterious applications, but to develop mobile phones, and it is the key to smart phones." .

At the same time, Lei Jun pointed out three major development trends for the entire mobile phone industry:

1, the computerization of mobile phones. Smartphones will replace PCs and become the most popular end product for the general public.

2, the entire industry Internet. The integration of the Internet and traditional industries, using the Internet to make the original business better, is the Internet.

3. The future development law of the entire industry is: vertical integration of software, hardware and internet services. This will ensure the quality of the entire user experience and service.

The following is a speech record:

Lei Jun:

Dear leaders of the Internet Society, distinguished guests, good afternoon. The organizing committee wanted me to talk about the mobile internet. I insisted on choosing a mobile phone. Why do you talk about mobile phones? I told my colleague a story. Not long ago, I met Unicom chairman Chang Xiaobing. During those years, we have been wondering how to develop 3G and mobile Internet, and think of a lot of killer applications. There are not many results.

In the end, Apple released an iphone, and the mobile Internet naturally. He said what is the key to the development of mobile Internet? Is it mobile phone development?

So, the relationship between mobile phones and mobile Internet is so close that after I have been doing my own mobile internet for many years, I think that doing a good job of mobile phones is the key. If you do a good mobile phone, do not look at the trend of the next 5 to 10 years, you can't go in without looking for a good entry point. Because at the end of last year, I had a friend who came to me and said that when you heard of your cell phone, did you say it was a human job? The reports he sees are all people living in the industry.

I would like to share with you some of my future trends and big ideas about the development of the mobile phone industry. There are three trends. The first is the computerization of mobile phones, which means that mobile phones will replace PCs and become the most popular terminal for the public.

The second is the Internetization of the entire industry. It is also just that the chairman said that the integration of the Internet and traditional industries, how to use the Internet to make the original business better, is the Internet.

Third, we have been talking about the future development of the industry as a whole. It is the vertical integration of software and hardware Internet services, because only by doing so can the entire user experience and service quality be ensured.

Let me first talk about the first trend, that is, mobile phones will replace PCs as the most popular terminal for the public. When this viewpoint was mentioned by me five years ago, people may find it strange that many people actually accepted this point of view when speaking today. An IBMPC inventor also said the same point a year ago. He said that PCs, like typewriters, were abandoned by the general public and eventually replaced mobile phones with PCs. This is a big idea in front of the entire industry, that is, mobile phones instead of PCs.

With mobile phones replacing PCs, we in turn think, what do we think about the Internetization of mobile phones? The mobile phone industry is in the Moore's Law industry. After years of development in the PC industry, PCs have failed in Moore's Law. The mobile phone industry is not dominated by Intel and is a stronger RM family. Three years ago, the strongest Android phone was the HTC. This phone is a bomb. Two years ago, Google released the first mobile phone, which was a big mess in the year. In August last year, Xiaomi released China's first dual-core 1.5G mobile phone. In January this year, HTC announced a 4-core 1.5G mobile phone in Barcelona. It may be that this speed of development is something we did not see when we were doing PC.

We all know how many chip factories RM comes from. If I remember correctly, there are only 78 RM CPUs in China. I believe that the speed will increase and the price will fall linearly. This promotes the computing power and cost optimization of the entire smart phone. This is a very big driving force for the entire industry.

The second hardware and software are moderately separated. When we come back and think that only moderate separation will occur, it will be possible to have better operating systems that are more valuable to users in the competition. At this point I also made a bold attempt to do it first, based on Android Deepin OS, running on more phones. I also want to let more operating systems run on the Xiaomi phone, that is, our hardware and software are moderately separated. Today we support a lot of customization based on Android, and even have millet phone on Windows XP. We will not develop micro hpone when we communicate with Microsoft.

Today, only the Xiaomi phone clearly understands you. OK, Xiaomi's Sharp, Toshiba for mobile phone screens, and Xiaomi's LG Telecom for cell phone batteries tell you to understand things. In the entire supply chain, the spread of first-rate second-rate suppliers is very large. At this point, we learn from the PC industry that different devices have different prices. Let each user know what you are buying. Make this competition more orderly.

In the past when buying a mobile phone, especially high-end mobile phones, 5,000 today, a cumulative total of 4,000 a month, sometimes as a user, they bought it to be fooled. Why can't we justify this cost, just as we do for PCs? It's 10% to 15 gross margin. This is because industrial development is finally the case. So the original idea that made me make Xiaomi mobile phone, can not do the cost pricing in the initial period, wait until the amount is measured to a certain extent, oneself make money. This is the model we used as the top mobile phone in the industry in August of last year.

If you see this trend, you can survive at the cost of cost. Why do we have to hire tens of thousands of people to make mobile phones? Why do we have hundreds of models that people can't remember? Why not learn Apple to do a good mobile phone, these ideas subvert the industry a lot of ideas. The company's structure will adapt to the 15% gross profit margin in the future. So this is the future, who can control the cost, this cost is not to reduce user experience and quality, is to control their own optimization of organizational structure, control their own costs.

Therefore, we first began to use the operating rules of the entire PC industry to operate the mobile phone industry. Therefore, I recall that after we saw this trend, first of all, we thought about the entire direction in accordance with Moore's Law, that is, since the mobile phone is in the area of ​​Moore's Law, its core chip will be very fast. Can you plan your organizational structure at a gross margin of 15% so that you can survive in this competition?

The second trend is internetization. Our only first step is to have no future. We must make full use of the Internet to enhance our competitiveness. The first is the rapid iterative development model of the Internet, helping us to develop a product that ordinary people like. There aren’t many people in the world who like Jobs can figure out what the user wants? How does the internet do? We are quickly out of control, communicating directly with users and working with users to make products. So that's why we insist on weekly iterations.

Weekly iterative development model is the earliest introduction of development mode. Millet operating system ease of use greatly ahead of its peers, used millet mobile comrades all know, are rice flour with our exchange ideas. When you use this method, you will find competitiveness and its strength.

Therefore, we have made such a MIUI system and passed word of mouth by users. Fan stations were established in 16 countries, half of the users came from the international market, and zero publicity. Google acquired our 11 million MIUI. In fact, MIUI is an operating system based on Android that is very feverish. We used Internet word-of-mouth marketing. When I saw some mobile phone companies, I turned on television as an advertisement. I would wonder if we could save advertising costs. Because who pays for the final advertising fee? It's the user who pays. Why don't we let users buy cheap things. I insist that good products can speak. We use the social media model and use word-of-mouth marketing to minimize our marketing costs so that our products can be sufficiently cheap.

What is the real killer attempt? Use electricity provider mode. Can eliminate all the middle channels, reduce the intermediate cost to zero, of course, using electricity providers to do mobile phones can not be communicated? Do not remember that Google tried it in the United States two years ago and sold tens of thousands of mobile phones. Today, we may make this road. Everyone thinks it is very simple and easy. Why did Xiaomi first do it? Many people think that there is no innovation? I think you have the ability to come up with such an innovation. You also do something that Google can't do.

In fact, the complexity here is higher than we thought. We think about today's e-commerce companies are advertising, price wars, and free shipping for the whole game, all of which are huge losses. Today, Xiaomi is able to sell 1999 yuan of money on the Internet. This product is very expensive, and basically sells 100,000 units of 200 million yuan in sales in 35 minutes. How did Xiaomi try to make a mobile phone on the Internet in his own mode, so sometimes I understand that innovation is a small change and results in huge results.

Today, we at least according to the highest-end mobile phone to 2,000 yuan or less, Xiaomi today this model, to this part of the Internet we use what method? Using the Internet model for R&D, marketing, and using the Internet e-commerce, we have reversed the e-commerce advertising, must be very cheap, it is best to sell only 20 dollars. No, a Taiwanese media interviewed me and said that you are a low-cost mobile phone? I said that you stopped. In 1999, a mobile phone in China was definitely not a low-cost mobile phone in China. What we do is all the highest-end phones.

The third point, the triathlon, the Apple model has come up with a law that integrates hardware and software, Internet services, and customer experience. Where is the integrated user experience? The success of Apple's huge success model. Why can't people think of such a simple question? Can't do it? Have you ever wondered what the PC industry has done wrong? A few days ago when I talked with a senior person who had been in the PC industry for many years, tell me a question. We all assume that PC industry people assume the fact that users need cheap products? Therefore, it is indeed cheaper for everyone in the supply chain to make cheap products, but no one likes this product.

In such a complex industrial chain, if you are a high-end person, it is useless. Because the entire product quality is an integral component, this is also the key to Apple. Apple is hoping to create a high overall user experience. So at this point, Xiaomi hopes to explore. For example, many people say that because mobile phone power saving is a complicated issue, many application software programs do not care about power consumption. Sometimes users complain that Xiaomi’s mobile phone consumes power. A lot of work needs to be done to help the developers save power on Xiaomi mobile phones and jointly create a mobile phone with a relatively strong standby ability.

Therefore, Xiaomi Mobile actually sees these three major trends. The three trends look back, that is, mobile phones will replace PCs and become the most commonly used terminal for the public. In fact, there will be many extended products. I think we will tell everyone in the near future what ideas and changes will happen through this vision. Including millet mobile phone on the road there are many changes.

Second, the entire industry is integrated with the Internet, because with the Internet we have the opportunity to make Xiaomi mobile phones. The third software and hardware integration and vertical integration ensure the integrity of user experience. We are using this idea to make Xiaomi mobile phones.

At the end of last year after we released it, Morgan Stanley made a report that Xiaomi’s mobile phone ranks first among all domestic brands. Among all Baidu brand brands, millet ranks first in the top five and domestic brands. The Taobao index millet phone ranks first in many days.

Secondly, in the past, we had sales figures for the first five rounds, and retailed 100,000 mobile phones in the 35 minutes on March 17th. These sales have already exceeded 1 million units. The entire mobile phone counterparts are actually very surprised numbers.

Finally, I would like to say that we Xiaomi on the road, doing innovative things, there will be such an imperfect place, I would like to invite your friends to support more, understand more and encourage more.

thank you all.