this man is not calm

Chapter 465 Seeing the big from the small
The market for feature phones around the world has been almost divided up. Domestic high-end mobile phones are basically foreign brands, while mid- and low-end products use imported core components, supplemented by local cheap raw materials and low-cost labor advantages. A number of well-known manufacturers have barely emerged, but unfortunately they do not have core competitiveness and do not have the strength to invest in research and development, iteration and upgrading.

It's not everyone's fault for being short-sighted. The market is really so small that large groups with strong financial resources are not interested in this market. Most industry companies are formed by a few talented leaders in technical research institutes and rely on the local market to maintain their presence. There are very few that are truly going nationwide.

With less than eight million mobile phone users and the impact of cheap copycat phones, a large number of "tertiary industry" companies that came to make money were mixed in. The price war was in full swing, and the quality not only did not improve, but stagnated or even regressed.

The bottom line is that the investment in research and development has been insufficient in recent years. Everyone is trying to make easy money, and very few are willing to take on the "hard bones".

The more he learned about the current development of the IT Internet field, the more Jin Shang lamented how difficult it is for latecomer countries to catch up in the field of chips and semiconductors.

For those with insufficient strength, the gap is like a chasm, and they will not be angry even if they cut your leeks; but if they truly master this technical process, it will quickly become a useless industry with low profits, high investments and high risks.

Just like the "Equality for All" bomb, stealth bombers and aircraft carrier fleets, their suppression effect on weak forces is maximized, but at the level of "chess player" countries with similar strength, it does not have much effect.

Since they can deter each other equally, the effect will naturally not be so obvious.

Chips are actually like this. It is better to buy than to make, and it is better to rent than to buy. This is correct to some extent. However, you can choose not to make them, but you cannot fail to make them. Once you don’t have the ability or the purchasing channels are blocked, the price tag will be added with a zero in a minute, and the unit will change from RMB to US dollars.

As for mobile phones...or in key IT fields such as PCs, smartphones and servers, display panels, batteries and chip semiconductors are three products of similar importance.

Everyone has heard of the example of the chip bottleneck, but you may not be so familiar with the other two. It’s not that they were not stuck, but that they suffered great losses and then conducted research and development behind closed doors and soon made breakthroughs.

In an era when domestic demand for Korean memory is increasing, Samsung has made more than 600 billion yuan in a year by selling memory chips to the mainland. The sellers are absolutely strong and never bargain. They take whatever they want, which is simply shocking.
When Xiaomi suddenly emerged and made huge profits, the supply of glass panels was cut off. It was not because Lei Jun was determined to engage in "hunger marketing", but because there was really no stock. Moreover, there were many domestic mobile phone brands that suffered from it, and most of the well-known ones hated Samsung. The situation was not alleviated until BOE spent several years and invested a total of more than 100 billion yuan to overcome the difficulties. Even though domestic technology was crude and product quality was slightly poor, no one bought Samsung screens anymore.

As for the overt and covert competition in the battery sector, there are countless of them.

The difficulties of chips and semiconductors are well known to everyone. In fact, the difficulties are not necessarily worse than when the memory, screen panels and batteries were in the most dangerous situation. The technical shortcomings are in the manufacturing technology research and development of some top chip semiconductors, and mid- and low-end chips are no longer a problem.

Of course, the localization rate of core technologies and key components in the upstream and downstream of the industrial chain still needs to be improved, but the contradiction is no longer so irreconcilable. On the contrary, the memory, batteries and screen panels mentioned above were once really dependent on others and were overwhelmed.

Speaking of these "three major items", Jin Shang was also very pleased.

In 1998, the price of a mobile phone was higher than half a year’s salary for most workers in Beijing. It was definitely not a “fast-moving consumer product” that was replaced every two or three years.

As long as you can still make calls and send text messages, there is no need to change it.

However, the quality of current mobile phones may not last forever, especially mobile phone batteries, which degrade very quickly. If used improperly, the standby time will be significantly reduced after one year.

Therefore, spare or replacement battery repair has become the most profitable after-sales service, followed by selling universal chargers. The other categories combined do not make as much money as the first two.

In this era, mobile phone batteries were separate and removable and replaceable, and were not at all like the later ones that were deliberately made into an integrated type.

In the past three years, Planet Intelligence has released two "Mercury" series mobile phones, and more than half of them are about to face the problem of battery degradation and replacement;

At the beginning, Jin Shang did not think of making money from it. As a new entrant, it was acceptable to lose a little money to increase its popularity. As a result, judging from this year's statistical reports, selling mobile phones and providing after-sales services not only started to make money, but the profit was also considerable.

This surprised everyone in the company, and Jin Shang, the boss, suddenly realized that whether a business is profitable or not cannot be judged by appearance alone.

Jinshang does not have the strength to try high-end chip semiconductors, so it can only try to work on practical chips that are one, two or even three generations behind, first stabilize the situation and retain R&D talents and technical backbones;
In terms of batteries, CSSC Electromechanical has some foundation. The manufacturing technology of lead-acid batteries is not bad, and it is stable and reliable. It also has some accumulation of cadmium-nickel batteries and hydrogen-nickel batteries. The transformation and research of vanadium liquid flow redox batteries and lithium batteries have achieved some impressive results. As for solid oxide fuel cells, there is room for improvement. For the time being, it can only rely on cooperation between schools and enterprises, invest in development and testing, and slowly master the core technologies.

In addition, it is understandable that they are eyeing the "huge profits" of display panels. The competition between plasma and LCD for color TVs and PC monitors is in full swing. While Jin Shang is working on infrared display technology and OLED layout, it has also begun to turn its attention to mobile phones and tablets.

Neither capacitive screens nor resistive screens are new technologies that have emerged in the past two years. Instead, they have existed for a long time but had no practical value. It was not until the consumer electronics market began to rise that people noticed their advantages.

Hong Renquan is no layman. He has actually been in charge of the mechanical and electrical engineering of the Beijing Shipbuilding Industry Corporation for decades. He knows a little bit about everything. Large ocean-going ships, especially luxury cruise ships, are equivalent to a small but complete maritime community. Civilian products on land can generally be found on ships. After being transferred to ordinary household use, whether they are sophisticated or well-made is another matter, but at least they are not completely ignorant. With more research, you can always find a substitute that is barely affordable.

The batteries of Mercury mobile phones and Xiaolingtong are actually the products of compromise. For example, after opening a new mobile phone in the early days, it is emphasized that it must be "overcharged" for the first few times. The reason is that most of them use nickel-cadmium batteries and nickel-metal hydride batteries. Although the technology is mature, it also has many disadvantages. The former has obvious memory effect and must be fully discharged before being fully charged, otherwise it will affect the capacity and lifespan. Moreover, it is not small in size. This is generally the case in "big brother" batteries.
The memory effect of the latter is not as strong, but it cannot be ignored. Its advantage is that it is smaller and can be put into most mobile phones, including the current Xiaolingtong and Mercury mobile phones.

As for lithium batteries, let's wait a little longer. The technology is not very mature. Although the performance is excellent, the risk is also higher. We cannot take risks. Jin Shang kept the "lesson" of the Samsung battery explosion incident in mind and was always vigilant.

Hong Renquan, who is already semi-retired, actually doesn't need to work so hard, but when he thinks about the many things that are still unfinished in his career, he has to help the younger generation. The repair and construction business of CSSC Electromechanical has been put on the right track. The public performance forecast of this year's semi-annual report is a year-on-year increase of 35%, and the actual hidden profit is more, but other business lines are a bit messy, especially the newly opened planetary intelligent manufacturing. Although Jin Shang can manage remotely, it does not have a general who can take charge of everything, and it is a bit unsteady. Several rising stars still lack a sense of the overall situation and responsibility, and need to be tempered.

After playing with the single-function test machine for a while, Hong Renquan put the stylus back in place, put down the device, pondered for a moment, and asked:
"It's a novelty, but it's hard to say whether it's popular, especially with a 3.5-inch screen. Can customers really accept it? It can be held in one hand, but to use it freely, you need two hands."

"What's wrong with that? You can do more with your hands..."

"Boss Jin insisted on adding more additional functions to the phone besides making calls and sending text messages. I can't say whether it's good or not, but... is a large screen really necessary?"

"Let's try it first! Although the mobile phones we produce are of good quality and low price, they must have their own characteristics to leave a deep impression on users. Large screen, multi-function, networking and leisure and entertainment are the direction. The previous mobile phones were too small and could not do anything. If I was not afraid that users would not accept it, I would directly use a 4.5-inch or even 5.5-inch super-large screen..."

"Too radical, President Jin!"

"I know!"

He waved his hand, signaling Hong Renquan to calm down, and then explained,
"It is still difficult to make the screen panel bigger. It cannot be done overnight. In addition, there are many difficulties to overcome in the debugging of hardware and software. We will add functions gradually, use them when they are mature, and wait for more if there are any problems..."

Another reason that is difficult to say publicly is that today's mobile phones are more sturdy and durable than each other. Except for the short battery life, everything else is very "solid". As long as the battery is replaced, maintenance is done properly and usage is in accordance with regulations, five years is not too little and ten years is not too much.

Jin Shang still remembers that the first feature phone with replaceable battery he bought in college in his previous life last year lasted for five years, and the first smartphone without replaceable battery became less useful after two years.

The large screen of a mobile phone happens to be a fragile part. Unlike some classic models of mobile phones, it cannot be broken when dropped and can still be used after being soaked in water. It can also be used as a hammer to crack walnuts while making calls.

Replacing a mobile phone screen is not cheap, and the profit is much higher than selling spare batteries and universal chargers.

"A large-screen phone? If it is used as a feature of the Mercury series..."

"It's not just a big screen, it's a big screen smartphone. Although the so-called 'smart' is just a gimmick, playing small games, sending and receiving chat messages, listening to music and browsing websites, its advantages cannot be denied..."

The large screen is just an intuitive appearance. If it is linked to the "Mercury phone", "smartphone" and the Internet, it is equivalent to establishing a "personality" and giving a unique "label" to one's own product.

Don't underestimate this "insignificant" change. To put it bluntly, this is the process of building brand awareness. Pioneering fashion, smart trendy toys, online network, touch screen texture, etc. are all "stereotypes" in the minds of users, and they will benefit greatly in the future.

“Should we continue to persist in the traditional feature phone market?”

"Of course we do. It's not like we can't sell them. We don't seek to make money. We'll be satisfied if we can cover the operating costs. A small profit would be a surprise, but a big profit... probably would be a bit difficult."

If we develop step by step, there will be no room for up-and-coming companies to gain a foothold. What's the point of engaging in price wars in the markets of low-end feature phones, assembly brands and copycat phones?
Jin Shang raised his index finger confidently and shook it gently, then smiled nonchalantly:

"I have a big advantage over others, that is... I am a wealthy man, a super wealthy man, I have a strong ability to make money, and I can afford to lose money. Therefore, I can endure a long period of time to lay the foundation and 'let the water flow to raise fish'! The market of millions of users is divided up by dozens of companies. In the end, those who can occupy 10% will probably be in the top five of the sales rankings, but this has no appeal to me. If it is just this level, I will not bother to get involved at all, let my subsidiary Sun Gongzi do the supply chain, find an opportunity to go public, cash out and leave, and make a fortune. It is not worth it to go through so much trouble and gain nothing just to increase the deposit amount..."

"Indeed, Mr. Jin is a rich man, Richman. The more money he has, the faster he can make money!"

Hong Renquan said with great approval,
"Keep calm and focus on establishing a brand image and product features, and targeting a group of young users with spending power. Since we can't make much money anyway, we might as well get something other than profit."

When it comes to business, the essence of opening a business is to obtain excess returns, but this return... or profit, may not necessarily be short-term revenue, or even money.

Intangible assets are also assets and must be included in the company's financial statements and have recognized values.

After discussing the details a bit more, Hong Renquan finally understood Jin Shang's plan.

"Making resistive screens is actually similar to making photovoltaic cells. CSSC Electromechanical is not completely ignorant of this and has some experience, but it is not professional enough. But it doesn't matter. We have many suppliers and suppliers of suppliers. We can still find a way by contacting them. It would be best if we can buy them with money, but if not, we can poach them."

It is not an emerging technology. In the past, the market was not large, the application scenarios were very narrow, and the industry did not pay much attention to it.

Some electronic technology companies are also conducting similar technical research, but they probably have no idea whether it has any prospects.

(End of this chapter)