Feng Yu looked at Liu Chuanzhi, thinking “What a country bumkin. Don’t even know what a self-assembled PC was.”
“In the future, there will be retail shops that specialized in selling computer parts and then assemble it for customers. Don’t you think they are able to sell their PCs to customers at a lower price without marketing and branding? Also, customers are able to pick and choose the parts and specs of their PC. The PC will suit their needs better than getting the standard package from the PC companies.” Feng Yu smiled and replied.
This trend will only appear after Hong Kong returned back to China. China still does not have such shops now. Feng Yu said this was to scare Liu Chuanzhi and tell him that he might not make money if he enters the PC industry like this.
How did Lenovo make so much money from their PC in Feng Yu’s previous life? First, they hired many factories as contractors to lower their cost of production. Second, they made use of their status as China’s own PC brand and had the support of the Chinese Government. The Chinese government agencies and related units were all using Lenovo PC.
Other PC brands do not have such a big client, and their sales could not exceed Lenovo. Lenovo was also the company who started the price war with the other brands. Lenovo does not need to pay the Government high importation taxes, and they had retail outlets in every county of China.
There were many other reasons why Lenovo was successful in China. Of course, Liu Chuanzhi still had not thought about this yet. He felt what Feng Yu had said seems reasonable. If someone were to set up self-assembled PC shops, their products’ sales would be affected.
“But we have the technologies, and we are able to make software. Also, we understand people’s requirements. We can surely produce the best PC that suits the Chinese. We are also China’s first PC brand for consumers, and it will not be a problem for us to capture China’s market. Therefore, I think our PC products will rake in profits for the company.”
Subconsciously, Liu Chuanzhi changed from getting high profits from PC products to getting profits from PC products. His conviction started to sway.
“You say you have the technologies? But can your technologies compare with the technologies from other countries? I also have lots of engineers working for me.”
“Manager Feng, you also have electronic engineers? Are you talking about Jiang Wanmeng and his colleagues from Wind and Rain VCD?” Liu Chuanzhi asked.
“Chairman Liu also know Jiang Wanmeng and his colleagues? But they are not the only electronic engineers hired by me. Is that pager clipped on your belt Aiwa Pager? Aiwa brand is also mine.” Feng Yu leaned back and cross his legs.
“Aiwa brand? The company that manufactures Walkman, VCD players, and pagers?” Liu Chuanzhi’s eyes opened wide.
The whole nation knew that Aiwa VCD player was Wind and Rain VCD player’s competitor. But Liu Chuanzhi had never expected both brands belongs to the same person!
But what have these two companies got to do with Lenovo? There were many types of electronic engineers. Those engineers that specialized in audio players, telecommunications were different from the engineers that specialized in PC.
“Manager Feng, even if you own Aiwa and have lots of electronic engineers, that does not mean you are able to manufacture PC.” Liu Chuanzhi said.
“Chairman Liu, what do you think of the storage of floppy disk?” Feng Yu suddenly asked, changing the topic.
“Floppy disk storage? The capacity of the Floppy Disk has been improving. Currently, the standard floppy disk storage is 1.44M, but the 2.88M floppy disk is already available in the market.” Liu Chuanzhi was an expert in this field.
1.44M, even if this was doubled, it could only store simple data. It could not even store a PC game!
“Then what do you think if the floppy disk drive is changed to CD-ROM drive?
“CD-ROM drive?”
“Optical disk drive. I am sure you are familiar with this.” Feng Yu said.
CD-ROM drive was already in the market in 1991. But the CD-ROM drive currently was very slow and very costly. It was not common for regular PC to use CD-ROM drive now.
The computers at this time use Floppy disk drive, and when Feng Yu visited the Computer shops in Hong Kong, he saw a computer with two floppy disk drives. One was for 3.5” floppy disk, and the other was for the soon-to-be-obsolete 5.25” floppy disk.
But these floppy disk drive could not be compared to the 640M storage CD. The CD was better and more suitable to store data, games, movies, etc.
When the CD-ROM drive was launched, Liu Chuanzhi had also looked into it. But this CD-ROM was too expensive, and they do not have the related technologies. It was not suitable for them to use this drive in their PC.
Wait, Feng Yu’s companies were producing CD and VCD players. CD and VCD players were related to CD-ROM drive. The basics were the same. Feng Yu could manufacture CD-ROM?
If Feng Yu had the optical disk drive technology, then this would be an opportunity for Lenovo. They would be able to produce a PC with a CD-ROM drive. Their PC will be top tier if it comes with the software and the CD-ROM.
“Manager Feng, you are telling me that you hold the technology for CD-ROM?” Liu Chuanzhi asked anxiously.
Feng Yu nodded and asked: “Is it that hard to develop this technology? The traditional CD-ROM drive speed was 150KB/s. The latest standard is 300KB/s, and we are able to produce the optical drive for this 300KB/s. I can use this technology to invest in Lenovo and include some engineers that specialized in this field.”
The reason why Heitaro Nakajima wanted to enter the PC market was that when he was developing the CD players, he had also looked into the CD-ROM technology. This was also why Heitaro Nakajima felt that it was easy to manufacture PC. He thought that with this CD-ROM drive, he would be able to produce better PCs for top-tier consumers.
But Feng Yu knew that Floppy Disk was still mainstream. Regardless it was a laptop or a desktop, most of the files were still stored in the floppy disk.
Just like the PC game Feng Yu was playing, . For every stage he completed, he needs to insert a new floppy disk. It was too troublesome. If there were CD-ROM, one CD-ROM would be enough to store all the files. The CD-ROM could even store many games.
There were already PC games using CD-ROMs. But those were only for publicity. CD-ROMs will replace floppy disk 3 to 5 years later. If any companies produced PCs with only CD-ROM drives now, it would inevitably fail!
But Feng Yu did not tell Heitaro Nakajima about this. He only told Heitaro Nakajima to set up a team to research on CD-ROM with higher speeds. It was enough to be able to manufacture CD-ROMs, but he should not think about going into the PC industry. It was still impossible for them to compete with so many other competitors currently.
Computers were not like Walkman. After all, Aiwa’s brand was already well known in the Walkman among the consumers. Feng Yu finally convinced Heitaro Nakajima, but Heitaro Nakajima does not intend to continue to research on CD-ROMs. He wants to focus on CD player technologies. Feng Yu used this reason to buy the CD-ROM technology from him.
“Manager Feng, I need to report to my higher-ups. Can you wait for another two days? I will contact you again.” Liu Chuanzhi needs to reconsider about Feng Yu’s investment into Lenovo. Using technology to invest was entirely different from using funds to invest.
Feng Yu smiled and nodded: “No problem. But do not let me wait for too long.”
