In Hong Kong, we build a global business empire

Chapter 424 Motorola’s Dilemma

Since Robert Galvin wanted to be more direct and didn't like beating around the bush, Lin Haoran simply got straight to the point and said, "Mr. Robert Galvin, the main reason I came here this time is to reach a cooperation with Motorola.

I deeply admire Motorola's outstanding achievements and technological innovations in the communications field. I believe that if we cooperate, we will be able to create brilliant achievements together."

When Robert Galvin heard this, a hint of surprise flashed across his eyes, but he immediately regained his composure.

He nodded slightly, motioning Lin Haoran to continue.

Lin Haoran continued, "I understand that Motorola is a global leader in mobile communication technology. I think your mobile technology should be relatively mature, right?
My region, Hong Kong, is in urgent need of such advanced technology to promote the development of the communications industry. Therefore, I hope to cooperate with Motorola to jointly develop the mobile communications market in Hong Kong."

Before coming to Chicago, Lin Haoran had conducted an in-depth investigation of Motorola.

He learned that Motorola's technology in mobile cellular signal networks was already quite mature, and that its mobile phone hardware equipment technology had reached commercial standards.

However, despite the maturity of the technology, Motorola was slow to bring mobile phones to market.

Lin Haoran knew that there must be many unknown problems hidden behind this.

Among them, the most critical point is government approval.

Building a mobile cellular signal network in a city not only involves a large amount of infrastructure construction, but also requires consideration of a series of complex technical issues such as signal interference, transmission distance, and coverage range.

More importantly, this requires explicit approval and authorization from the government to ensure the security, stability and legal operation of the network.

For Motorola, obtaining government approval may not be difficult. After all, they have a military background and relatively close relations with the government.

However, Motorola faces even greater challenges in actually bringing mobile phones to market.

The most difficult thing is that if you want to sell mobile phones, you must first build a mobile cellular signal network throughout the city.

In a large city like Chicago, the investment required to achieve full coverage of mobile signals is extremely large, even exceeding $100 million.

If this network were to be expanded to cover the entire United States, the funds required would be incalculable.

Motorola once made a detailed estimate. Based on the proportion of wealthy people in Chicago, that is, potential customers, it would take at least a dozen years to recover the investment cost if it only relied on users in Chicago.

This is a long and uncertain process for any business.

However, it was precisely these difficulties faced by Motorola that made Lin Haoran see the possibility of cooperation with Motorola.

He believes that with his resources and influence in Hong Kong, as well as his in-depth understanding of the Asian market, he can help Motorola solve some of its problems and jointly promote the commercialization of mobile phone technology.

American cities have a rather peculiar characteristic, that is, a large number of the population is concentrated in the suburbs surrounding the city center, while the population living in the city center is actually not that large.

This is exactly the opposite of Hong Kong, where a large number of people are concentrated in a small area in the city center, while there are not many people in the suburbs.

As the headquarters city of Motorola, if Motorola wants to be the first to use it commercially, it will definitely give priority to Chicago as the coverage target.

But if the mobile network is only built within a few square kilometers of downtown Chicago, the functionality of mobile phones will be greatly reduced because most people do not live in the city center; they are scattered throughout the suburbs of Chicago.

This means that if mobile phones are to become truly popular, mobile cellular signal networks must be built in wider areas of the city.

However, the investment required is extremely huge, even exceeding 100 million US dollars.

This is a huge challenge for Motorola.

Motorola's R&D laboratories are involved in a wide range of research and require funds everywhere. Many large-scale R&D projects are very long-term and the payback period is far away.

It is precisely because of this that Motorola’s stock price has not been able to go up, because everyone knows that almost all the money Motorola earns is invested in research and development, and the profit is actually not high.

It is naturally impossible for them to come up with more than 100 million US dollars to build a mobile cellular signal network when the payback period is far from over. 100 million US dollars is not a small amount.

It is even more difficult to find external investment partners.

Mobile cellular signal network technology is not unique to Motorola.

In fact, their competitor Bell Labs had successfully developed an advanced mobile phone system in cooperation with Motorola four or five years ago, and successfully tested a true cellular mobile communication network.

This means that Motorola does not have an absolute advantage in mobile communication technology. Although their technology is not inferior to Bell Labs, the advantage is not great. The only big advantage may be that they have developed a commercial mobile phone.

In addition, technology companies in Japan, Europe and other places also have technical strength in the field of mobile communications that is not inferior to Motorola.

These companies are also actively seeking partners to promote the commercialization of mobile phone technology, but it is obvious that unless the government invests, private investors will not invest in this area due to the issue of return rate.

But it is different in Hong Kong. The city center area is actually not very large. It only covers the northern end of Hong Kong Island and the southern end of Kowloon Peninsula, and the population is almost entirely concentrated in this area.

Other areas, such as the central and southern ends of Hong Kong Island, the New Territories at the northern end of the Kowloon Peninsula, Tuen Mun and Yuen Long in the west, Sha Tin in the east and even Lantau Island, etc., have sparse populations, so naturally you can ignore them for now.

Once the investment is made, it is only necessary to cover the densely populated areas of Hong Kong with mobile cellular signal networks to directly enter the commercial stage.

This means that compared to big cities like Chicago, the investment in building a mobile cellular signal network will be greatly reduced. It may only take 20 to 30 million US dollars or even less to build an effective cellular mobile communication network in the center of Hong Kong and surrounding key areas.

Such an investment strategy not only greatly reduces costs, but also greatly improves the rate of return.

Due to the high population density in Hong Kong, especially the number of middle- and high-income people far exceeds that of Chicago, the cost cycle for recovering investment will be significantly shortened.

Once the network is built and put into use, it will quickly become profitable.

More importantly, if he can be the first to seize the mobile communications market in Hong Kong, then Lin Haoran will have a huge competitive advantage in Hong Kong and seize the mobile communications market in Hong Kong.

Once this cooperation is concluded, he will not only occupy the fixed-line telephone market but also the mobile communications market in the future.

Then invest overseas with Hong Kong as the center.

As the financial and trade center of Asia, Hong Kong's market potential, influence and consumption capacity cannot be underestimated.

A population base of over five million and the third-largest position in the world's financial industry provide a vast market space and unlimited business opportunities.

Chicago, the third largest city in the United States, has a total population of only more than two million, and almost all of these people live in villas around the city center.

"Cooperation in mobile communication technology? Mr. Lin, are you referring to the plan to build a cellular mobile communication network in Hong Kong?" Robert Galvin asked curiously.

"That's right." Lin Haoran nodded in confirmation, "As far as I know, Motorola should be conducting large-scale trials on this technology, but the trial costs are quite high, so it has not yet been commercialized.

As a city of moderate size, Hong Kong is very suitable as a testing site. I propose that we can work together and Motorola can provide advanced technical support.

I will be responsible for the capital investment. As for the equity distribution, we can negotiate according to the actual investment ratio. Mr. Robert Galvin, what do you think of this cooperation plan?"

Robert Galvin fell into deep thought after hearing this.

He carefully weighed the pros and cons of the cooperation, and couldn't help but feel strong interest in Lin Haoran's proposal.

After all, finding a partner willing to take financial risks is undoubtedly a huge boost for Motorola.

Motorola did have relatively mature technology a long time ago. For example, the first mobile phone was actually developed by Motorola in 1973. However, the technology was relatively backward at that time and not suitable for large-scale commercial use.

But now, after eight years, their technology has become more sophisticated in terms of hardware equipment.

As for mobile signals, their technology is not bad and they have already conducted multiple small-scale tests.

However, it is quite difficult to use it for large-scale commercial purposes.

Because the United States itself is a country with a small population and a vast land. For example, in Chicago, although the core area of ​​the city center is not large, the suburbs of Chicago are extremely large. Although there are many high-rise buildings in Chicago, there are actually more low houses.

Even if one is willing to invest on a large scale, there are not many people in Chicago who can afford mobile phones. Therefore, it is bound to be a long way to go to get the investment back. As a businessman, profit is naturally the most important thing.

Coupled with the high construction and maintenance costs, large-scale commercial use becomes difficult.

The situation in Hong Kong is completely different. As a city of moderate size, its geographical environment and population density make it relatively easy to build a mobile communication network.

In addition, as the financial and trade center of Asia, Hong Kong has many wealthy people and the demand for advanced communication technology is extremely urgent.

(End of this chapter)