In Hong Kong, we build a global business empire

Chapter 695 Motorola Partners

In the early 1980s, Motorola was undoubtedly an American technology giant, especially in the fields of communications and semiconductors, where it was a "defining force".

From mobile communications to semiconductors, Motorola is currently a world leader.

Even in the defense and aerospace fields, Motorola possesses strong technology.

They provided the U.S. government with radio and satellite technology, and even later participated in the massive Iridium project.

Although the "Iridium Project" was very advanced, Motorola was ultimately severely damaged by a failed business model, market misjudgment, and high costs, missing a key opportunity in the mobile communications market and gradually declining.

However, these are all things for the future.

At least today, Motorola is undoubtedly a giant in the technology sector.

Although there is a significant gap in market capitalization compared to IBM, it does not mean that it is inferior to IBM.

Previously, The Wall Street Journal, America's most famous business newspaper, had named Motorola a benchmark in the global technology industry and a model of combining innovation and business success.

At the height of its technological prowess, Motorola's president, Robert Galvin, was undoubtedly one of the giants of the American business world, a figure comparable to that of Walter Ristine, chairman of Citibank. Both were benchmark leaders in their respective fields.

"Is this Mr. Galvin's first time in Hong Kong?" Lin Haoran asked with a smile in the reception room of the Kang Le Building.

Ma Shimin was also in the reception room, but he was more of an accompanying person.

At this moment, Robert Galvin is standing in front of the glass window of the reception room, overlooking the bustling view of downtown Hong Kong.

He already knew that Lin Haoran was very powerful in business; even American business newspapers often reported on Lin Haoran.

But it was from this meeting room that Robert Galvin gained a deeper understanding of the sheer size of Lin Haoran's business empire.

The bustling Victoria Harbour outside the window contrasted beautifully with the grandeur of the Connaught Building, prompting even this seasoned tech giant to secretly admire it.

All of these demonstrate Lin Haoran's business strength.

"No, this is my third time in Hong Kong."

Robert Galvin turned around, smiled slightly, and said, "But every time I come here, I can feel the amazing changes in this city. Especially now, seeing Mr. Lin's business empire here reminds me of when Motorola started in Chicago."

Of course, while Robert Galvin was surprised by the speed of Hong Kong's development, Motorola's headquarters in Chicago was the birthplace of modern skyscrapers, and the Sears Tower, now the world's tallest building, is located in Chicago.

Therefore, in terms of skyscrapers, Hong Kong can only be considered a junior compared to Chicago.

Therefore, Robert Galvin quickly turned his gaze away from the view outside the window and focused on examining the furnishings in the drawing room.

His gaze lingered on the group photo wall on the wall.

The photos show Lin Haoran with many political and business tycoons, including one with Robert Galvin.

This photo was taken when Lin Haoran visited Motorola's headquarters to discuss cooperation, and he took a group photo with Robert Galvin.

Seeing his photo with Lin Haoran displayed alongside numerous presidents, queens, and business tycoons he knew, Robert Galvin's impression of Lin Haoran immediately improved.

After the three of them were seated on their respective sofas, Lin Haoran had his assistant bring Robert Galvin and Simon Murray a cup of coffee, while he himself ordered a cup of hot tea.

"Congratulations, Mr. Galvin." Lin Haoran took a small sip of hot tea, placed the teacup on the small table next to him, and said with a smile to Robert Galvin.

“Oh? Why do you say that, Mr. Lin?” Robert Galvin asked, somewhat puzzled.

"Tomorrow, we will jointly announce the official launch of Hong Kong's mobile communications commercial business. This will mark Hong Kong's official entry into the mobile communications era, and Motorola, as the technology provider, will surely go down in history. At the same time, Motorola's stock price will definitely soar because of this. Isn't this something to celebrate?" Lin Haoran laughed heartily.

Upon hearing this, a shrewd glint flashed in Robert Galvin's eyes.

He picked up his coffee cup, took a small sip, and a meaningful smile played on his lips: "Mr. Lin is indeed well-versed in the ways of the market, however..."

He put down his cup, crossed his legs, and continued, "What I'm really looking forward to is that this collaboration will open the door to the entire Asian market for Motorola."

Although Motorola has long been present in the Asian market, its market share is actually quite limited.

For example, in Japan, Motorola entered the Japanese market very early, but Japan also has many tech giants, and Motorola has never been able to achieve a dominant position in Japan.

Domestic giants such as Toshiba and NEC have built strong technological barriers, and the Japanese people are very patriotic and proud to use domestically produced products, which has kept Motorola's market share in Japan consistently low.

This is a regret for Motorola.

Today, they have chosen to cooperate with Lin Haoran to build the world's first commercially operated mobile communication network in Hong Kong, making it the world's first city to achieve commercial mobile communication. Their aim is to leverage Hong Kong's position in Asia to demonstrate their technological strength and gain a larger market share in Asia.

This is why, after Lin Haoran's visit, they held an internal meeting and ultimately agreed to his request so easily.

Motorola was certainly not a fool; all their strategic moves were well-thought-out business decisions.

The reason why Lin Haoran's cooperation proposal was able to impress Motorola's top management was because it perfectly matched Motorola's strategic needs to break into the Asian market, rather than being simply persuaded by Lin Haoran's few words.

"No, no, no, Mr. Galvin, market value has always reflected a company's status in the eyes of the public. In fact, I have always believed that Motorola's strength is no less than that of IBM, but Motorola's market value is seven times lower than that of IBM."

"I think this is a serious undervaluation of Motorola by the market. I think Mr. Galvin thinks so too, right?" Lin Haoran also crossed his legs and laughed.

Robert Galvin remained silent for a moment upon hearing this.

Clearly, Lin Haoran's words had a profound impact on him.

IBM's market capitalization has now exceeded $30 billion, reaching $33 billion, making it the second largest listed company in the United States, second only to AT&T.

However, Motorola's current market value is only close to $5 billion, and it hasn't even broken through that mark yet.

Both are leading companies in the technology industry, yet their market capitalizations differ so greatly. It's impossible to say that Robert Galvin had no ulterior motives.

As the head of Motorola, Robert Galvin understood the company's technological strength and market potential better than anyone else.

He believes that Motorola's current strength is in no way inferior to IBM's!

"It seems Mr. Lin has quite a bit of knowledge about the American business market. In your opinion, why is there such a huge difference in market value between Motorola and IBM?" Robert Galvin took a sip of his coffee and humbly asked for his advice.

He didn't expect to gain any profound insights from Lin Haoran; he just wanted to see if Lin Haoran, who had made a name for himself in the business world at such a young age, truly possessed any real talent or ability.

Of course, if he could hear some helpful opinions from Lin Haoran, that would be even better for him!
Upon hearing this, Lin Haoran smiled slightly. Although the question was somewhat sudden, it was not difficult for him to answer.

Lin Haoran gently set down his teacup, his gaze deepening. "Mr. Galvin, this is a very interesting question. In my view, the difference in market capitalization between Motorola and IBM stems primarily from three key factors."

“I’d like to hear more details.” Galvin leaned forward slightly, showing great interest.

"First, business focus."

Lin Haoran held up one finger and said, "IBM focuses on the enterprise computer market, forming a complete business loop. Motorola, on the other hand, has businesses spanning multiple fields such as communications, semiconductors, and defense. Although it possesses strong technological capabilities, the capital market prefers companies with a focused approach."

Robert Galvin nodded thoughtfully, signaling him to continue.

"Second, cash flow visibility."

Lin Haoran raised his second finger and continued, "IBM's mainframe business brings stable and predictable cash flow, while Motorola's innovative businesses, such as mobile communications, although promising, have long investment return cycles, making it difficult for Wall Street analysts to accurately value them."

As for the third point...

Lin Haoran paused for a moment, and seeing that Robert Galvin was listening more attentively, he smiled and continued, "And the most crucial point is the power of market narrative."

IBM told a perfect story of 'computers changing business,' while Motorola lacked such a grand narrative to impress the capital markets.

A hint of surprise flashed in Robert Galvin's eyes; he hadn't expected Lin Haoran's insights to be so profound.

From Lin Haoran's words, Robert Galvin could sense that the other party had a very deep understanding of both IBM and Motorola.

This made Robert Galvin think even more highly of Lin Haoran.

Setting down his coffee cup, he pressed on, "So, Mr. Lin, how does Motorola think it should change this situation?"

Lin Haoran smiled slightly and said confidently, "This is precisely the strategic significance of the Hong Kong project. We want to make Hong Kong a showcase for the mobile communication revolution and tell a new story of 'wireless connectivity changing people's lifestyles'."

When Wall Street saw the success story of Hong Kong and the explosive potential of mobile communications, it realized that if we could create a scene of frenzied buying of mobile phones, Motorola's valuation logic would be completely changed.

“However, I heard that you suggested setting the price of a mobile phone at HK$5, which is almost equivalent to US$1, and there are even additional fees such as account opening fees and monthly fees. This means that the threshold for customers is infinitely increased. In this way, can we really achieve the frenzy of mobile phone sales?” After listening to Lin Haoran’s words, Robert Galvin frowned.

At the beginning of the month, Robert Galvin, president of Motorola, learned of the suggestion from the head of Hong Kong Telephone Company: a mobile phone priced at HK$50,000, a network access fee of HK$10,000, a monthly basic service fee of HK$500, and a call rate of HK$2 per minute. At the time, Robert Galvin didn't think much of it; after all, the investment was high, and a high selling price was normal.

Just like IBM, the price of large commercial computers sold to external parties can easily reach several million dollars, such as the IBM System/370.

This large commercial computer, launched in the 1970s, is still widely used today. Its price ranges from $2 million to $10 million. More high-end systems, such as the recently launched IBM 308X series, can even cost more than $10 million.

Due to their high price, mainframe computers are primarily used by banks, airlines, large corporations, and government agencies. The number sold is not large, but the profits are very high.

Basically, the profit margin for each of these mainframe computers is over 80%!

This is why IBM is so popular in the capital market—because it's so good at making money!
Therefore, Robert Galvin did not object to Lin Haoran's high price; in fact, he even supported it.

He felt that Motorola had spent so much on research and development, and Hong Kong Telephone Company had also invested huge sums of money in building cellular mobile communication signals, so they should deserve a high return.

But when Galvin heard Lin Haoran say that he wanted to create a scene of "frenzy", he couldn't help but have doubts. How could such a high price cause a buying frenzy?
Lin Haoran seemed to have anticipated this question, and smiled slightly, saying, "We had already decided that there would only be three thousand places in the first batch, and Mr. Galvin should be aware of this as well."

Robert Galvin nodded; he did indeed know that.

After all, this mobile communications company, a joint venture between Hong Kong Telephone Company and Motorola, was the world's first to commercialize mobile communications, so he would naturally pay attention to every detail.

"Mr. Galvin, do you know how many billionaires, multi-millionaires, and millionaires there are in Hong Kong?" Lin Haoran asked with a smile.

Robert Galvin shook his head; he naturally knew nothing about such matters.

If you asked him how many billionaires there are in Chicago, he might be able to answer, but for him, Hong Kong is just an Asian city he's not very familiar with.

"As far as I know, there are more than 300 billionaires in Hong Kong! This includes not only local Hong Kong billionaires and British billionaires residing in Hong Kong, but also a group of wealthy people from Southeast Asia and other places. These billionaires are now investing heavily in Hong Kong and have settled there for a long time."

As for billionaires with assets exceeding HK$10 million, there are even more. Although I don't know the exact figures, there are at least over a thousand. And as for millionaires, I don't need to elaborate.

"The initial cost of over HK$60,000 is easily affordable even for millionaires, let alone billionaires and multi-millionaires. For the time being, we have a monopoly in the mobile communications field and are not worried about other competitors. So, Mr. Galvin, do you think 3,000 units is enough?" Lin Haoran laughed.

In Lin Haoran's previous life, Hong Kong started using mobile phones in 1983, also known as "Big Brother" phones. At that time, the price was directly inflated to HK$5 per unit, and there was still a shortage of supply.

Not to mention wealthy businessmen, even many actors and gangsters take pride in owning a "big brother" mobile phone.

Moreover, it's quite normal for a family member of a billionaire to own several of these.

In this situation, with only three thousand slots available, there's no worry about selling the mobile phones.

Upon hearing this, Robert Galvin was extremely surprised and said, "I never imagined that Hong Kong had so many wealthy people."

If what Lin Haoran said is true, then these three thousand slots are really not enough to go around.

In this way, creating a lively scene is naturally a breeze.

As for the second batch of slots, it won't be so quick. Not only do we need to overcome the relevant technologies, but we also need to further expand the coverage of base stations and increase the capacity of the signal network. All of this will take at least six months.

In this way, the user experience of the first batch of users will become the best advertisement, laying the foundation for subsequent market expansion.

Lin Haoran then explained, "Of these three thousand slots, I have reserved three hundred for my companies, and government agencies have also applied to us for three hundred slots."

Also, I'm quite well-known in Hong Kong and have extensive connections in the business world. My father is the vice president of the Hong Kong Chinese General Chamber of Commerce. In the past few months, I've been receiving calls from members of the Chamber who all hope to get a mobile phone quota, and I've even had someone register them.

So far, over five hundred people have registered their need for this product. That leaves fewer than two thousand units available. I suggest using a 'scarcity marketing' strategy.

Galvin's face showed a puzzled expression: "Hunger marketing?"

Although the early prototypes of the scarcity marketing strategy can be traced back to the beginning of this century, it has not yet been formalized into a theoretical concept.

According to the development trend, it was not until the 1990s, or even the beginning of the 21st century, that it truly entered the early stage of practice.

The systematization and mainstreaming of scarcity marketing came after the iPhone 4 launch in 2010. At that time, the iPhone 4 was snapped up due to its technological innovations, such as the Retina display and glass body. Scalpers were rampant, and Apple created the illusion of supply shortage by limiting purchases and releasing the product in batches.

Subsequently, when Xiaomi launched its first mobile phone in 2011, it combined online pre-sales and limited-quantity flash sales to link scarcity marketing with "high cost performance," forming a "futures marketing" model—attracting users with low prices first, and then producing according to order volume.

As more and more successful examples emerged, the marketing technique of scarcity marketing gradually spread to industries such as automobiles and liquor. For example, BMW and Audi used scarcity marketing by offering limited-edition models or charging extra for immediate delivery. Moutai maintained its high price and scarcity by controlling the supply, and was even accused of artificially creating "shortages".

It must be said that 'hunger marketing' is indeed an extremely effective marketing strategy, especially in the high-end consumer goods sector.

Lin Haoran smiled slightly and explained, "The so-called 'hunger marketing' is to artificially control the supply to create a sense of scarcity, thereby stimulating consumers' desire to buy. We only released three thousand mobile phones in the first batch, but market demand far exceeded that number."

This would not only increase the product's premium pricing power but also make Motorola mobile phones a symbol of status and prestige.

Robert Galvin nodded thoughtfully: "Is this similar to a limited release in the luxury goods industry?"

Lin Haoran nodded and said with a smile, "That's right, but our strategy is more aggressive. We not only want to limit the quantity, but also make the market 'scramble' for it. We can take the following approaches:"

One method is a reservation and lottery system. Simply put, potential users register to reserve a spot, and then a lottery is held to determine who gets to purchase the item. This way, those who aren't selected will be even more eager to own it and might even be willing to pay extra to buy it from scalpers.

Robert Galvin's eyes lit up when he heard this.

He felt he had learned another trick.

"Secondly, there's the VIP priority purchase right, which allocates a portion of the slots to government agencies, top billionaires, and business partners, allowing them to be the first users and create a demonstration effect," Lin Haoran continued.

Robert Galvin, like a top student, listened attentively to Lin Haoran's words, his heart filled with a thirst for knowledge.

"Thirdly, we need to create hype through the media, inviting them to report on the experiences of the first batch of users, generating social buzz, and making mobile phones a standard accessory for 'successful people'." Lin Haoran paused here.

A look of shock flashed across Robert Galvin's eyes. He felt that coming to Hong Kong this time was definitely the right decision!
Lin Haoran's forward-thinking business acumen has even impressed this tech giant.

He couldn't help but exclaim, "Mr. Lin, your marketing strategy is absolutely brilliant!"

Lin Haoran smiled modestly: "Mr. Galvin, you flatter me."

He told Robert Galvin about this method, partly to give him face.

Nowadays, we are all partners, and we share common interests.

"Mr. Lin, your strategy is indeed brilliant, but as a technology provider, equipment supplier, and even end-product manufacturer, Motorola is more concerned with long-term market expansion. If the initial price is too high, will it affect future adoption?"

Lin Haoran smiled and said, "Mr. Galvin, the consumer psychology in the market is very interesting—the scarcer and more expensive something is, the more it can stimulate people's desire to possess it. The initial high-price strategy can not only ensure profits, but also create a high-end brand image."

Once the technology matures and costs decrease, we can launch more affordable models, which will naturally allow us to quickly capture the mid-range market.

Robert Galvin grew to admire Lin Haoran more and more.

As the president of Motorola, although he didn't need to personally oversee marketing, he was well aware of all the marketing tactics employed.

What Lin Haoran said today completely overturned his understanding.

So this is how marketing can be done!

At this moment, he finally understood why Lin Haoran had achieved such extraordinary success at the age of twenty-something.

At first, he thought Lin Haoran's current wealth was just a matter of luck, and that he was just a nouveau riche.

But now, that idea has completely disappeared.

Lin Haoran's extraordinary insight and his creation of a marketing method that was unheard of yet immediately effective made Robert Galvin look at him with increasing admiration.

Such people must be won over.

Now that Lin Haoran has achieved such great success, what about the future?

You have to understand, this young man is only in his early twenties, and he has unlimited potential for the future. In the business world, you can't miss out on such a promising talent! Robert Galvin thought to himself.

Moreover, he had long heard that Lin Haoran had a close relationship with Walter Riston, chairman of Citibank.

A proud and arrogant man like Mr. Walter Riston would not easily befriend ordinary clients, and even if the other party was a billionaire, he might not be able to personally show his goodwill.

However, he was well aware that Mr. Walter Riston was not only extremely polite to Lin Haoran, but that their cooperation was also deep and close.

The reason Robert Galvin met with Lin Haoran at the Los Angeles headquarters was partly due to Mr. Walter Riston, chairman of Citibank, who personally called him.

It seems that Walter Riston must have recognized Mr. Lin Haoran's extraordinary qualities long ago!
Suddenly, Robert Galvin stood up from his seat and said solemnly, "Mr. Lin, on behalf of Motorola, I would like to extend to you a sincere invitation to serve as a member of Motorola's board of directors and a partner. What do you think, Mr. Lin?"

　Dear readers, it's almost the end of the month, and saving your monthly tickets is a waste. Please give me some so I can reach 1,000 tickets! Thank you so much!
　　
　
(End of this chapter)