Extraordinary Genius Chapter 863

Extraordinary Genius

Chapter 863 - They will be doomed if they don't investin technological developments

Bankrupt?!

DirectorFang was shocked to hear this from Feng Yu.

Also,what did Feng Yu say? Pagers will be obsolete after 5 years? How is thatpossible?

The pagerindustry is on the rise now, and last year, there are more than 16 million newsign-ups in China, and paging centers were set up all over China. How is itpossible that pagers will be obsolete in 5 years?

"Feng Yu,you are saying that pagers might be replaced by mobile phones?" Director Fangsaw Feng Yu looking at his mobile phones on the table and asked.

"This isreality. Why do people use pagers? People use pagers to be contactable whenthey are outside, and mobile phones can solve this problem. You think mobilephone charges are high? But SMS is very cheap, and people will rather send SMSthan calling the paging centers to send messages."

"No… theprice of pagers had dropped to below 2,000 RMB, and the cheapest mobile phonein the market is around 6,000 RMB."

"DirectorFang, when pagers cost 4 to 5 thousand, the average annual salary of our peopleis around 1,000 RMB. That means an ordinary worker got to save all his salaryfor 4 years to afford a pager. But how come so many people can afford pagersnow? Is it because the price of pagers had dropped, or the average salary ofthe people had increased? Our country's economy is improving rapidly, and wehave more middle-income families. If there is a better telecommunication device,they will not get it? Also, how do you know that mobile phones' prices will notfall below 2,000 RMB like pagers in the future?"

"What?Mobile phone prices will drop below 2,000 RMB?!" Director Fang's eyes grewwide. How much is the production cost of a mobile phone? The returns from the mobilephone are very high!

"I amtalking about the future. Just look at pagers. When we developed the pagers,the production cost is around 2,000 to 3,000 RMB. But now, the production costis not even 1,000 RMB. Only the production cost of our latest product, high-speedHan characters pager, is more than 2,000 RMB. The production cost of pagers canbe reduced so much within 2 to 3 years, why can't mobile phones' productioncost be lowered?"

"But afew days ago, Minister Zhao of the Ministry of Telecommunications reported thatour country's pager users will increase by more than 15 million or more annualin the coming two years."

"Ibelieve there will be so many new sign-ups. But don't forget about the onescanceling their pager services." Feng Yu smiled and looked at Director Fang.

DirectorFang was stunned and remembered that he is also one of the people who hadcanceled his pager services. The figure reported by the Ministry ofTelecommunications is not accurate. This is like giving a report on the population.There might be a lot of newborns, but there might be more people who pa.s.sedaway.

Peoplewho canceled their pager services should be switching to mobile phones. Thatmeans the mobile phone industry's potential is higher than the pagers!

Yes. Thegovernment must not grant any more Pager's Network Access License and encouragemore companies to take up to Mobile phones' Network Access License. If most ofthe pager users switched to mobile phones, it would be a considerable market.Feng Yu cannot swallow the whole pie by himself and the government should notlet those overseas companies take advantage of this.

"What'swrong? Are you thinking of developing the mobile phone industry?" Feng Yulaughed and asked.

"That'sright. Your company's production should not be high enough to meet our domesticdemands, right?" Director Fang said this shamelessly. After all, he is doingthis for the country and not his personal gains.

"Ofcourse. It is a good thing if there are more mobile phone companies and it willopen the market faster. However, if it is still those pager companies switchingto mobile phones, they might make some money in the initial phase, but afterthat, they will close down." Feng Yu replied.

DirectorFang was not pleased to hear this. "You are saying only your company cansurvive and others can't? I admit your companies are doing very well, but youshould not look down on others."

Thosecompanies are all state-owned enterprises and have the support of the localgovernment. How can they fail? Close down after the initial phase? I don'tbelieve it!

"DirectorFang, have you notice what's common in all my companies?" Feng Yu asked.

"What'scommon? The management of the brands?" Director Fang guessed.

"That'sright. But branding is not the most important. My companies emphasized onR&D to keep improving our technologies. Our researchers and engineers arepaid more than middle management staff. You should still remember what the'Great One' said. Technology is the best productivity! Did those companies whofollow the trend blindly look into developing their technologies?" Feng Yuasked.

"Why not?They also hire experts to develop their technologies." Director Fang retorted.You think only your company has experts?

"I knowthey have experts, and some of their experts are more skilled than our researchers.But how many experts do those companies have? How many people are there intheir development team? A professor and a few of his students? Do you know howmany researchers and engineers are there in Aiwa Electronics? Just in Chinaalone, there is more than 100 technical staff. We still have staff from theformer Soviet Union and j.a.pan. When we developed this mobile phone, we stillseek help from my other companies and there is a few hundred staff in theR&D departments of those companies. More than 1,000 researchers andengineers partic.i.p.ate in the development of this mobile phone."

"It isonly a mobile phone. You can just buy one from the market and bring it back toreverse engineer it. Why do you need so many people?" Director Fang doesn'tbelieve what Feng Yu said.

This isonly a small device and should not require so much manpower to develop it. FengYu must be lying.

Feng Yuhad lied, but what he said was not wrong either. Wind and Rain Electronics,Aiwa Electronics, Wind and Rain Home Appliances, Aiwa Home Appliances, etc.have more than 2,000 R&D staff in total, but only a few hundred of them areinvolved in the development of this mobile phone. Most of them are working onimproving their existing technologies to compete and exceed overseas companies.

"Thosecompanies have the same thinking like you, and this is the reason why thosecompanies can only get leftovers. My companies will get the meat, and they canonly get soup. When we switch to another piece of meat, they are still drinkingfrom the previous bowl of soup. Even if the soup turns bad, they still mustdrink it because they don't have anything else to eat. I am rearing pigs andselling the pigs for money. Whenever I want to eat pork, I can just slaughterone of my pigs. Those companies can only wait for my leftovers."

SeeingDirector Fang about to say something, Feng Yu waved his hand and continued."There is a saying when doing business. 'Owning what others don't; If othershave it, mine must be better; if others are better, I will switch.' Did thosecompanies achieve this? If they are not Chinese companies, I will wage a pricewar and make them vomit blood. Those companies don't have any technologies orcapital. All they know is to use salespeople to push their products. What doyou think they can achieve? I can don't suppress them, but what about thoseoverseas companies? If the foreign companies decided to suppress them, what doyou think will happen to them?"

Why didFeng Yu allow those companies to exist? It is because the market is significant,and he does not need to suppress anyone to sell his products. At the same time,he also makes use of them to increase his product's status. Of course, he alsoneeds these companies' products to lower the impact of imported products.

But FengYu cannot tell Director Fang this. He got to put it in a way to show howgenerous he is to those companies!

Director Fang kept quiet. Feng Yu had been giving in to those companies, and it's a good thing. Those companies might seem to be doing well now, but these are all false.