Rebirth Tokyo 1986

Chapter 254 Cisco and America Movil

After inspecting the mobile phone project team, Masato Takeshita took Lou Gerstner to the office of the president of Xinghai Semiconductor.

"I couldn't hear you clearly on the phone. Come, let's talk about your trip to the United States."

In the past two months, the young man has been busy with oil futures trading.

They had no choice but to hand over the cooperation in acquiring the Mexican telecommunications company and the acquisition of Cisco shares to Lou Gerstner.

Lou Gerstner did not disappoint Masato Takeshita's recommendation and eventually secured huge benefits for the Xinghai Group.

The price is that he has been on a business trip in North America for the past two months.

It was only yesterday that I heard that the second-generation Xinghai mobile phone was released and that the president had come out of quarantine, so I took a plane back.

"Okay, then let me first talk about the cooperation to acquire Telecom Mexico."

"Well, please tell me."

The young man was very curious and wanted to know how Lou Gerstner had gotten involved and become one of the four parties that acquired Telecom Mexico.

"My approach is simple: to demonstrate the company's financial strength and determination."

"Announce to all competitors that Xinghai Semiconductor must be a part of it."

"Carlos and others had no choice but to give in and bring Xinghai Semiconductor into the cooperation."

Lou Gerstner’s method was very simple, which was to hint through various channels that Xinghai Semiconductor was going to invest a large amount of money.

To this end, he even deposited $50 billion directly in Citibank.

Then he said that 30 billion of this could become unsecured loans for partners.

The wealth of Xinghai Semiconductor has indeed shocked the various giants who have been eyeing Mexico's telecommunications business.

They all visited Lou Gerstner, wanting to become the spokesperson for Star Ocean Semiconductor in Mexico.

If Masato Takeshita hadn't instructed otherwise, the best partner would be Carlos.

With the conditions he gave, there was no way he would be selected.

After listening to Gerstner's reasons, the young man smiled and sighed.

"As expected of you, your methods are direct and sharp. No wonder you were able to grab 20% of the company's shares."

Although Telemexico is undergoing privatization reforms, its primary target is still its own citizens.

Therefore, the four-party consortium of Xinghai Semiconductor, Southwestern Bell, France Telecom and Carlos can only have Carlos, a Mexican, as the largest shareholder.

As a result, Carlos owned 45% of the shares of the entire telecommunications company.

Xinghai Semiconductor's 20% stake may not seem like much, but it is actually on par with Southwestern Bell & Bell, making them the second largest shareholders.

Xinghai Semiconductor would like to own more shares, but it is simply unable to do so.

If you want to do something in Mexico, you have to consider not only the Mexican government’s attitude, but also the Americans’ attitude.

Naturally, Southwestern Bell's stock share cannot be too low.

As for France Telecom, it does have less influence in Mexico.

But on the one hand, France Telecom has a huge influence in France and North Africa, and on the other hand, it has the smallest stake, only 15%.

Therefore, Xinghai Semiconductor’s 20% equity share is already the best calculation result.

"It's mainly because our company has money."

Lou Gerstner enjoys using money to crush his competitors.

You can achieve your desired goals without having to think too much.

The main point is that force can defeat skill.

Of course, Lou Gerstner’s power is actually used more for intimidation.

The cost of the four-party joint forces is even less than in the previous life.

The 20% stake in Xinghai Semiconductor ultimately cost only US$3.5 million.

But Gerstner's pride did not last long.

Soon, he asked a little worriedly: "I think it will be difficult for the new company renamed America Movil to make a profit in the near future."

"President, will this cause dissatisfaction among shareholders?"

Xinghai Semiconductor is not solely owned by Masato Takeshita. In order to recruit talents, it could only agree to investment requests from companies such as Hitachi, NEC, and Toshiba.

However, these companies only hold 25% of the shares, which is not enough to influence important decisions of Xinghai Semiconductor.

Therefore, the young man waved his hand nonchalantly and said, "Don't worry, they won't be so short-sighted."

"This is the only telecommunications operator in Mexico, and it has a five-year monopoly."

After experiencing the baptism of the bubble era, Japanese companies have indeed become more short-sighted.

The investment in scientific and technological research and development has been reduced, and more emphasis has been placed on cash flow and company assets.

But no matter how short-sighted you are, you still understand the meaning of monopoly.

In the case of America Movil, shareholders will only celebrate.

If we say that the investment in America Movil is mainly a reflection of Lou Gerstner's ability.

So in the Cisco equity transaction, he simply won without doing anything.

With Goldman Sachs around, Gerstner didn't have to do anything but get the contract back.

“Is this the initial contract provided to Goldman Sachs?”

Lou Gerstner was mainly responsible for the negotiations, so the specific contract naturally had to be signed by the young man himself.

What if Lou Gerstner suddenly has a brain attack and wants to trick Masato Takeshita?

Americans do this kind of thing all the time.

A well-known example is Columbia Pictures, which cheated Sony out of billions.

Later, Sony could no longer bear it and carried out drastic reforms to prevent the company from continuing to lose money.

Lou Gerstner didn’t have it in his previous life, but there is no guarantee that he can maintain it in this life.

After all, Xinghai Semiconductor is a Japanese company, not IBM from the United States.

"Yes, if the president has no objection, you can ask Minister Asuka to bring people here now."

"Okay, I'll call now."

Lou Gerstner was anxious, and so was Masato Takeshita.

Cisco's stock is so attractive that you can buy more than 2% of the shares for less than $20 million.

And in 10 years, the value of this equity will exceed 1000 billion.

Such a good thing is hard to find even with a lantern.

There was no problem with the contract, so it only took three days.

The young man signed contracts with Carlos's four-party coalition and Goldman Sachs Group, which acquired Cisco shares on behalf of Xinghai Investment.

Yes, Cisco’s shares were placed in Xinghai Investment.

It is mainly Xinghai Semiconductor, and currently has no financial business.

Even the shares of Telemexico will eventually be transferred to Xinghai Investment.

Of course, this is also related to the fact that Xinghai Semiconductor is relatively poor.

Xinghai Semiconductor's wafer foundry business continued to lose money, and its mobile phone business did not make any money due to its promises.

As for the flash memory chip business, there is only investment but no return.

I only made a small fortune from disaster emergency radios, as well as computer hardware such as mice and keyboards.

But this money is far from enough to cover Xinghai Semiconductor's expenses.

Therefore, Lou Gerstner's trip to North America this time was more in the capacity of vice president of Xinghai Group rather than president of Xinghai Semiconductor.

The money spent was also provided by Xinghai Investment.

In addition to poverty, there is also consideration of the project direction.

Xinghai Semiconductor needs to focus on its core business. Even if it makes money from investments, it has nothing to do with the company's development.

If you invest too much, it will be harmful to the company's development.

In this regard, Toshiba is a bad example.

Because of the obsession with investment during the bubble era, investment in technology has gradually decreased, and the company's innovation capabilities have become lower and lower.

The tragic experience of Fujio Masuoka is a microcosm of the reduction in funding.

Later, this once-proud company of Japan unexpectedly became Japan's largest zombie company.

It can only be said that technology companies cannot deviate from the main channel of technological research and development.

After the equity signing ceremony, Takeshita Masato was still busy and continued to take Gerstner around to inspect. "Oh, is this the company's new mouse?"

Masato Takeshita flicked his index finger and quickly flipped through the Word document on the computer.

"Yes, this is the new scroll wheel mouse that the company developed under the guidance of the president."

"Very good product. After passing the test, we immediately contacted major computer manufacturers to try to sign more orders."

The scroll wheel mouse may look inconspicuous, but it is also a big step forward in mouse innovation.

It greatly facilitates users' use of computers and is considered a classic change in the mouse field.

"Don't worry, President. We have already reached agreements with Toshiba, NEC, IBM, and Dell, and we expect to be able to attract more manufacturers in the future."

Toshiba and NEC are shareholders of Xinghai Semiconductor, so naturally they will give their mouse business to Xinghai Semiconductor.

Dell was approached by Xinghai Investment.

The interests of major shareholders must still be protected.

As for IBM computers, it was Lou Gerstner's credit.

In addition to discussing cooperation with Cisco and America Movil in North America, he also expanded his own mouse business to IBM.

"Very good. We will try to completely overwhelm European Logitech."

"Hi!"

The development of computer accessories is going smoothly, so young people don’t pay much attention to it.

He and Lou Gerstner went straight to the flash memory laboratory in his hometown.

"Is the research on digital cameras going well?"

“The storage space of flash memory chips is insufficient, and we need to develop larger capacity ones.”

"The images from digital cameras aren't very good either. We need a technological breakthrough from Sony."

The problem of flash memory capacity is actually relatively easy to solve. The worst that can be done is to make it larger and thicker.

But the picture quality is a bit difficult.

Sony's current progress in this area is insufficient, and there is no sign of this happening in the short term.

"That's OK, we'll just focus on increasing flash capacity."

"Digital cameras are progressing slowly, but don't we still have computers?"

Compared with digital cameras, the application of flash memory in computers has definitely made great progress.

Xinghai Semiconductor and NEC Corporation have collaborated to produce notebook computers using NAND flash memory technology.

And on this basis, we independently developed a solid-state hard drive computer with better performance.

The only drawback is that it is very expensive and only a few rich people can afford it.

Therefore, Xinghai Semiconductor is only experimentally producing 1000 units per year.

Rely on the hunger marketing model to increase the company's visibility in the computer field.

At the same time, it is also imitating the alien computers of the previous life and taking the extremely high-end route.

Fujio Masuoka is also happy about the use of flash memory chips in computers.

He raised his eyebrows slightly and said briskly, "Yes, flash memory is advancing very quickly in computers."

"It is estimated that in a few years, the high-end computer business will be dominated by flash memory."

Compared with mechanical hard drives, solid-state drives have many advantages.

The only drawback is that it is expensive and has a low cost-effectiveness ratio.

"Well, it's difficult."

Masato Takeshita did not agree with the views of his chief scientist, and then he explained in detail.

"The speed at which the capacity of mechanical hard drives increases is no slower than that of solid-state drives."

"So when the price gap is obvious, few people will buy expensive SSD computers."

“The price/performance ratio is too low and it is not suitable for companies and mainstream people.”

Mechanical hard drives are indeed not impact-resistant, but computers are rarely bumped or dropped.

The main companies that buy computers nowadays will naturally not pay for it.

The same is true for individual users.

Basically, you won’t move your computer often after you buy it, so you don’t need to pay attention to these issues.

The only business that is in great demand is the notebook computer business, but the current sales volume is still relatively low, accounting for less than 5%.

It is estimated that it will take several years of development to reach a certain market scale.

"This, okay."

Fujio Masuoka was quite depressed because he knew that what the president said was true.

In the short term, there is no possibility that solid-state drives will replace mechanical hard drives.

But soon, he thought of a good idea.

Then he asked expectantly, "President, when will the company enter the computer industry on a large scale?"

"Wait a little longer, now is not the right time."

Computer sales in Japan are still relatively low, so there is no need to become enemies with NEC over this.

In addition, not developing the computer industry is also related to young people’s plans for the company’s future.

Trying to occupy every industry will only drive major companies away.

"Ok."

Although his plan to distribute mobile hard drives on a large scale with his own computers failed, Fujio Masuoka quickly adjusted.

He racked his brains again and asked, "President, does Dell have plans to launch computers that use solid-state drives?"

Dell's factory direct sales model directly reduces computer prices by 30%.

Many people who originally had no intention of buying were attracted by the price of Dell computers.

Fujio Masuoka's idea was that Dell could use the price advantage of direct sales to partially produce computers with solid-state drives.

By that time, the prices of computers with solid-state drives and computers with mechanical hard drives will be the same, and some people will definitely prefer computers with mobile hard drives.

"This depends on Dell's needs. It's hard for the company to help."

Xinghai Investment is a shareholder of Dell, but it is just a shareholder.

The development of Dell Corporation is basically determined by Dell alone.

At most, Xinghai Group would gain some convenience, such as winning orders for mice and keyboards.

"This, okay."

Seeing that his chief scientist was a little disappointed, Gerstner smiled and interrupted.

"Don't worry, Dell is a very smart boss."

"If there is a need in this regard, we will definitely be asked for our opinion."

Lou Gerstner had previously traveled to the United States on behalf of the Xinghai Group, so naturally he had to visit the companies in which Xinghai had invested.

After he had a brief chat with Dell, he had to admit that Dell's team was very smart.

It can be said that in terms of quick wit, he is far better than his own president and also far better than himself.

Of course, this is normal.

Masato Takeshita is a fake genius, and Lou Gerstner is not good at this either.

Lou Gerstner is better at cutting costs and stimulating corporate vitality.

He is a good executor, but not so good at starting things.

"I see."

"The president is right. Don't worry. The flash memory market is expanding very quickly."

Although the sales of flash memory chips have just passed the 1 million US dollar mark, it will soon become 10 million or 1 million.

Not to mention anything else, just the memory card application on the mobile phone.

It will soon reach tens of millions, or even hundreds of millions.

The reason why Masato Takeshita didn't say it now is mainly because there are not enough mobile phones.

Once the sales volume of mobile phones exceeds 10 million, the young man will be the first to find someone to conduct research.

(End of this chapter)