Extraordinary Genius - Chapter 621
Chapter 621 – Setting the Industry standards together (Part 1 of 2)
“Philips will be cooperating with our Wind and Rainelectronics and Aiwa to set the industry standards for DVD (Digital VersatileDisc), and we will change the world!” Feng Yu said.
“Since Mr. Feng knew the purpose of my visit, then shall wetalk about the terms of our cooperation?” Thomas asked eagerly.
“Of course. What does Philips want? You can speak your mind.Hmmm…… We also have our terms.” Feng Yu wanted to hear what Philips wanted fromhim before telling Thomas his conditions.
“We are very interested in MPEG technologies, regardless ofwhether it is the first- or second-generation technology. These are what wewanted. We have advanced technologies for Laserdisc and Compact Disc. Thecompressing technology used by your VCD is invented by us, and we own thepatent.”
“We are using new technology. It is not your patentedtechnology, and it is not an infringement.” Jiang Wanmeng interrupted.
“You misunderstood me. I am not saying you all had infringedour patents. Compact Disc technologies are changing every day. There arechanged to technologies almost every month. But as the inventors, we have thebest technologies. If we cooperate, we will surely let Compact Disc replace thetradition cassette tapes. This is a win-win situation for both of us.” Thomasexplained.
“Currently, our VCD occupies 20% market share of the videomarket, and it is still increasing. In China, our VCD had taken over more than60% of the videocassette market. In the US, we owned more than 30% marketshare. Even without your company’s help, we are confident that Compact Discwill replace cassette tapes in 3 to 5 years.”
Are we fools? With your help, the process will only speed upslightly, but we still have you give you a cut of our profits. Without yourhelp, we can still succeed, and we are still able to get all the profits. ToWind and Rain Electronics, both ways will work. But for Thomas, Wind and Rain Electronicswas walking down the wrong path.
If the VCD was just invented, what Thomas said was notwrong. But after so long, VCD had been accepted by consumers, and this was thetime to reap the profits. There is no difference between getting the benefitstwo years earlier and two years later.
“If this is completed one day earlier, you get the profitsone day earlier. Don’t you agree that capturing the market is more important?”Thomas asked.
“We only take a few months to invent this technology fromscratch and used two years to introduce to the rest of the world. We areoccupying the market right now.” Feng Yu replied calmly.
Thomas did not retort and continued: “Ok. Then I will talkabout other things. You all invented the Digital versatile disc is to sell thisproduct and the players, right? Then the technology for the players is verycritical. I believe that you all have already started the developments forthis. However, are you confident that you all will be faster at developing theencoding technology than Sony and Toshiba?”
The encoding technology was what Feng Yu wanted. If theplayers could only read and could not encode the disc, the uses of the discwill be limited. If a PC was equipped with a burning optical drive, thencompact disc can replace the floppy disk. The profits from this will be huge!
If Lenovo could use this technology effectively in itscomputers, then Lenovo’s development would be much faster. Maybe it will becomeone of the world’s top PC manufacturer!
On the other hand, Wind and Rain Electronics and Aiwa alsoneeded this technology. If not, they will only be able to encode VCD disc, orthe DVD they produce will not be compatible with other companies’ players. Thatwill hinder the introduction of the DVD players.
DVD will ultimately replace VCD. That’s for sure. If theindustry standards were like the VCD, which was set by Wind and RainElectronics, then Wind and Rain Electronics status in the internationalelectronics industry will rise. The profits will be significant.
“How can you prove that the development speed will be fasterthan Toshiba and Sony if we cooperate with you? Furthermore, Pioneer,Hewlett-Packard, etc. are also researching into this technology.” Feng Yuasked.
“Because our company is Philips! We are the first ones toinvent the encoding technology. We have the best foundations!” Thomas repliedproudly.
“Fine. Even if you all were the best in this technology, butwhy are we faster at developing the MPEG technologies than you? We can also cooperatewith other companies, and the results will still be the same.” Feng Yu replied.
Damn. You are talking as if Philips is the best company inthe world. If Philips is really that good, then why didn’t you all invent theVCD? You all are just greedy and wanted a slice of the pie now.
“Manager Feng, let us analyze the market situation. Afteryou all announced your latest technology, Toshiba and Sony immediatelyintroduce another set of standards for the industry. Pioneer also started tolook into this technology. Hewlett-Packard also announced that they will beresearching this technology. That means 4 world class consumer electronicscompanies are entering the market. This does not include us. I want to know inthe consumer electronics industry, where does Wind and Rain Electronics stand?What position does your company stand?”
This was a slap on Feng Yu’s face! If we are in the firstposition, do we still need to cooperate with others?
“Compare to the whole industry, our position might not be high.But when it comes to video players, our technologies are one of the best in theworld. Just look at VCD. This is a product that will change the consumerelectronics industry. We will be introducing Super VCD soon, and we will surelybeat the old school video cassette players. When we introduce the DVD players,we will become one of the top consumer electronics company.”
“Time, Mr. Feng. I would like to remind you that time is animportant aspect. What if other companies introduced DVD when you introducedyour Super VCD? Your disc can store 100 minutes of high-quality video. What ifother companies introduce a disc that can store 200 minutes of video? The discis not only used to store movies. There is another popular option forconsumers. TV dramas. Your disc can store 2 to 3 episodes, but others can storeup to 10 episodes. It will be a great difference.”
“Don’t forget we are still partnering with Aiwa.”
“Aiwa is a good company. But its strength is only in the Walkmanindustry. Their CD technologies are not better than Sony and many othercompanies. Aiwa is only making use of its reputation as a good music player.When it comes to video, Aiwa is still a newcomer. It is not known for videoplayers, and their technologies are not outstanding. It cannot be compared tous, Philips!”
Damn. How can he belittled Aiwa to this extent?! If HeitaroNakajima knew about this, he would bring his samurai sword to duel with you! Ifhe loses, he might even cut his own belly.
Feng Yu stop frowning. “Mr. Thomas. The more you say, themore you look like you want to cooperate with us. Tell me your conditions.”
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