How the Internet hardware should be "free"

The so-called "hardware free", is not a zero price, no charge, a loss to gain eyeballs, but 0 of profits. That is to sell at cost price. After the hardware is free, like free software, it is no longer the only link in a value chain, but it becomes the first ring, it becomes the window between the manufacturer and the user, and becomes the bridge between the manufacturer and the user.

"Free" has been the vast number of netizens love, from a certain point of view, "free" really represents the spirit of the Internet. Now most of the Internet software products are free, I think the future trend is "hardware free", and put forward hardware free first step is hardware 0 profit. Unfortunately, many friends only see the "Hardware Free", but did not see I said "Hardware 0 profit", in the case of a smattering of criticism of my "hardware free" view. I think it is necessary to clarify here.

Although I am very much in favor of K.K proposed "hardware free", but I always think, at least at this stage, in China, under the premise of Internet, hardware will tend to 0 profit.

In May 2012, I proposed in an article:

"It takes a process to achieve hardware free, especially in China." But hardware prices have dropped to 0 of profits, at least in developed countries such as the US, which have become a trend. Although the profit of mobile terminals is close to zero, the Internet business model can also be established through the built-in value-added services. ”

Software Free is a very good understanding of the concept, such as I developed a software, development cost is 1 million, if there are 100 million people in the software, the cost of everyone to pay only 1 cents, can be ignored, you can free.

For example, a lot of people are using micro-letters, it will be carriers charge SMS and MMS for free, and experience to do better. As long as you have the flow, you have WiFi, you do not need to dig SMS money, send a photo does not need to pay for MMS. As a result, the micro-letter quickly to the carrier from the level of communication to kill.

Although the micro-letter does not charge your communications fees, but you use micro-letter every day, Tencent is a huge user base. Tencent as long as in the micro-letter to promote the game, so that everyone hit the plane, in which you recommend goods, it can easily earn more than China Mobile each year to collect SMS fees and more money.

However, different hardware, raw materials, logistics, each link to spend money, and each sales, the cost will be superimposed. Therefore, I proposed the "Hardware Free", not zero price, a penny does not accept, lose the eyeball, but 0 profit. In other words, it is sold at cost price. No matter our wifii, or like the video TV, are walking the "0 profit" free mode.

Will the 0 profit of this hardware really turn into a 0 price one day? Is it really free? I think it's possible. In the 90 's, computing equipment such as laptops was very expensive, like luxury goods, but now a variety of computing equipment to fly into the ordinary people's homes, computing equipment accounted for the proportion of overall expenditure is getting lower, but we through computing equipment online consumption is more and more. If a smartphone costs 2000 yuan, allowing users to buy a brand's services via smartphones in two years, such as E-books, games, commodities, and more than 2000 yuan, the smartphone can also be considered for free.

If you only produce hardware, sell hardware, once your value chain is free of people, I'm sorry, you can only become a foundry, earning a meager profit. To survive, you need to build a new business model, and you have to create new value chains. Therefore, I said that the hardware "free", must create a new value chain to support, this is the traditional enterprises in the transition to the Internet must be considered.

After the hardware is free, like free software, it is no longer the only link in a value chain, but it becomes the first ring, it becomes the window between the manufacturer and the user, and becomes the bridge between the manufacturer and the user. The user used my fridge, drove my car, watched my TV, and continued to offer him other services to make money.

The hardware is free, I don't think it will happen right away, but this trend will be seen in the next five years. Today, in the Internet, those who know the way of free enterprises, will be more easily in this new wave of overtaking.