"No matter what, Apple won't monopolize the smartphone market..."
Jobs' expression became pensive as Barron spoke.
As he'd said, while Apple and Honor Electronics' touchscreen smartphones had each surpassed 10 million units sold this year, the market was still dominated by traditional feature phone brands like Nokia, Motorola, and Samsung.
For example, Nokia, the current mobile phone "dominant," reported third-quarter sales of nearly 120 million units, bringing its annual sales to over 460 million units, representing nearly 40% of the global mobile phone market share. The meager sales of Apple and Honor Electronics couldn't even compare to Samsung, let alone Nokia—the world's second-largest mobile phone manufacturer, with a market share exceeding 16%.
Apple and Android are the future, but the future hasn't arrived yet. Therefore, for now, facing the more powerful traditional mobile phone manufacturers, Apple, Android, and even Honor Electronics are all considered part of the "new forces" in the mobile phone market
. Baron's point is that he doesn't want internal strife among these "new forces" at this point in time. Any competition will likely happen only after Nokia, Motorola, and Samsung have been consigned to history... For example, the iPhone won't become a "street machine" until the iPhone 4 is released.
Currently, the iPhone 3G and Mate series have received widespread praise, but their user base is still relatively limited compared to the overall mobile phone market.
Furthermore, even among the "new forces" in the smartphone market, Apple and Android aren't the only ones. Whether it's Microsoft, which is more powerful but has a smaller market share than either of them, or Google, which is about to enter the mobile operating system fray, both appear more threatening to Apple than the "newcomer" Android.
It seems that Baron's meeting with Jobs did have some effect.
Although Apple and Android ultimately didn't reach a specific cooperation agreement, they later reached a tacit understanding to collaborate on certain aspects of touchscreen smartphones, including cross-licensing of certain patents. After all, companies
like Honor Electronics, which already had patent licenses purchased at a high price from Philips, haven't faced much attack from traditional phone manufacturers. Apple, however, has been embroiled in numerous patent lawsuits.
This is why, three years later, they participated in a group acquisition of Nortel's patents.
"
The employment situation in Silicon Valley is becoming increasingly severe. Many companies have gone bankrupt due to shattered funding chains. Even those that have managed to survive have opted to tighten spending by closing projects and laying off employees..."
Accompanied by Ivanta, Barron headed to Woaw's Silicon Valley headquarters.
Downstairs, Barron surveyed the surroundings. Silicon Valley remained bustling, but the expressions on the faces of the people passing by were noticeably more serious than they had been a year or two ago.
"Compared to large companies, startups have it even harder. Although large companies like Woaw face numerous restrictions, they at least still have some access to financing. But startups, unless they're highly regarded and have the potential to become unicorns, have a hard time raising money from venture capitalists..."
As the manager of IC Capital, Ivanta has a deep understanding of this. As a well-known investment firm, IC Capital receives countless emails and visits from companies seeking investment every day...
Furthermore, the attitudes and demands of those startups have become increasingly lower due to the current economic situation...
"How is Woaw?" By this time, they had already entered the building. Barron, Ivanta, and Sage Byrne, CEO of Woaw's North American operations, along with a bodyguard, were riding in the same elevator. This time, Barron's questions were directed at Sage Byrne.
"The crisis has impacted many aspects, most notably our advertisers becoming more cautious. Since the first quarter, our advertising revenue has shown a slowing growth trend, and the situation is getting worse. According to the latest data, third-quarter advertising revenue has dropped by over 10% compared to the same period last year. It's foreseeable that the fourth quarter will also be difficult. Although we've implemented many measures to increase advertiser enthusiasm,…"
Sage Byrne shrugged helplessly, saying,
"This is the overall market environment. Other companies like Google and Yahoo are in similar situations… Yahoo's situation is even worse. They fired their previous CEO, forcing Yang Zhiyuan to personally rectify the situation once again."
Sage was right. Seven years after the dot-com winter of 2001, the internet industry, affected by the subprime mortgage crisis, once again entered a period of decline.
Woaw's situation isn't simply due to declining advertising revenue. Firstly, in accordance with Barron's guidance, they've invested heavily in developing mobile internet platforms. Woaw was one of the first internet companies to actively develop and optimize its apps for both Apple's iOS and Android.
However, realistically, the current market share of Apple and Android is far from what it will be in two or three years, and the returns Woaw can expect are limited.
Furthermore, Woaw has been investing heavily in R&D for technologies like cloud computing and streaming media. These investments are substantial, and a significant portion of their previous revenue has gone into R&D. While these technologies have yielded some results, they haven't yet reached a point of profitability.
Finally, there's YouTube. Last year, Woaw acquired YouTube from IC Capital. Following the acquisition, Woaw has invested significant resources, including substantial capital, into the video-sharing platform.
The results have been significant, with YouTube's user growth showing impressive growth and creating positive synergies with Woaw.com.
But for now, and for quite some time to come, YouTube will need continued investment from Woaw. Its advertising revenue will far from cover the subsidies YouTube provides to its content creators. Baron understands this is essential, as it's these content creators who ensure YouTube's competitiveness as a video platform.
Furthermore, as a video website, YouTube's operations require high bandwidth and maintenance costs, which are significant expenses.
In his previous life, after Google acquired YouTube, it also continued to provide financial support, and it took many years before it became profitable...
"As I said, a crisis presents both danger and opportunity..."
Baron told Sage.
"Now is also a chance for Woaw to recruit some talented people, and we can also acquire startups that can complement Woaw's capabilities."
Whether it's continued R&D or support for projects like YouTube, it's all part of Woaw's future, so it's essential to continue.
As for funding, Baron's visit this time will resolve that issue.