Rebirth Tokyo 1986

Chapter 397 Ono's Troubles

"A PHS (Personal Handyphone System) base station, isn't that a bad idea?"

Kenji Ono was a little reluctant, as this was the company's most profitable business going forward.

Xinghai Communications' R&D expenditures on 3G technology require strong support from the PHS (Personal Handyphone System) project.

"Don't worry, there are conditions. Huawei's PHS base stations can only be sold in the Chinese market."

"Is that so? Then I have no objection."

Kenji Ono knew that even if he blocked the chairman's decision again, he would not be able to monopolize the Chinese PHS base station market.

Because the development difficulty of the PHS base station project is too low, and the Chinese government would not allow Xinghai Communications to monopolize it.

It would be better to transfer the technology to the company that invests in it, thereby indirectly earning both share dividends and patent fees.

It's better than well-known foreign telecommunications manufacturers bypassing Xinghai Communication's patent wall and not paying Xinghai Communication a single penny.

"OK, let's talk about ZTE's terms."

"ZTE's conditions were a $10 billion valuation and the transfer of the complete PHS (Personal Handyphone System) technology."

"Oh, ZTE is actually eyeing PHS (Personal Handyphone System) technology?"

"Yes, Chairman Hou Wengui has excellent vision."

Although both Hou Wengui and Ren Zhengfei have technical backgrounds, and Ren Zhengfei's technical research and development capabilities are stronger, ZTE's technical strength and vision were far superior to Huawei's in the initial stages.

The reason for this difference is largely related to the development of the two companies in their early stages.

Hou Wengui was ordered by the space agency to go south to the special economic zone and Hong Kong Island to jointly establish ZTE Corporation.

Because it was a subsidiary of the space agency and had funding from Hong Kong, ZTE had a large number of high-end talents from the beginning, so it quickly developed qualified switches.

However, their rise and fall were both due to Hong Kong businessmen.

After ZTE made money from switches, Hou Wengui's idea was to increase investment in scientific research to achieve more technological breakthroughs and enable the company to continue to grow and expand.

Hong Kong businessmen disagreed, believing that ZTE had no chance at all and should just distribute all the profits.

Company development and communication ideals, get out of my way.

Due to differing philosophies, Hou Wengui simply withdrew with his team to start a new business.

This time, having learned his lesson, Hou Wengui gave 51% of the shares to his team, with the remaining 49% going to various state-owned enterprises for investment.

In this way, even if there is a dispute, he will be the one to make the decision.

This is the biggest reason why ZTE, which was doing better in its early days, is now not much different from ZTE.

ZTE experienced a serious internal conflict, which can be considered a second phase of its development.

However, it was precisely because of this internal strife that ZTE placed even greater emphasis on technological development. After witnessing the success of PHS (Personal Handyphone System) technology in Japan and Thailand, they immediately determined that it also had great potential in the domestic market.

Therefore, when faced with Xinghai Communications' investment, they specifically requested the complete set of Xiaolingtong technology.

Huawei, on the other hand, is a completely different story.

The founding of Huawei stemmed from a helpless situation for Ren Zhengfei.

Because of the scam he was caught, he can't find a good job anymore, so he has no choice but to start his own business and take a chance.

Since it was a desperate measure, it was naturally difficult to attract high-end talent in the initial stage, meaning that the company could only rely on agencies to support itself.

During the agency process, all team members are sales personnel, including Ren Zhengfei himself.

He needs to ride his bicycle around every day, promoting his own agency's products.

Later, when the distributor ran out of stock, they had no choice but to start R&D, but the quality of their own products was just average.

Naturally, they once again resorted to the old path of competing on sales and service.

Therefore, ZTE started with technology, while Huawei started with sales.

These different ways of starting out also influenced the mindset of the two companies.

ZTE has a more discerning eye for technology and prefers a middle-of-the-road approach. It doesn't strive to be number one in the industry, but rather selects the most suitable technology.

Therefore, ZTE's development has been very stable since that internal conflict, and it has continued to develop steadily even when it was targeted by the United States.

Huawei has suffered a lot in the sales process, so it is even more committed to technological advancement and always aims for the world's number one position.

The price was frequent ups and downs, with several crises of bankruptcy and closure.

One of these instances was due to the choice of PHS (Personal Handyphone System) technology.

When the Little Smart (Xiaolingtong) first appeared in China, ZTE astutely realized that this product was very suitable for the Chinese market and could definitely make a fortune.

Huawei, however, was dismissive, believing that 3G was the true choice for the times, and that outdated technologies like PHS (Personal Handyphone System) had no future.

Huawei's idea was correct, but it overlooked the importance of timing. As a result, for a long time, Huawei's 3G technology remained unused.

Ren Zhengfei was somewhat disheartened and considered selling the company to Motorola. However, Motorola changed its mind midway, and Huawei had to continue developing independently.

This time, Huawei has learned to be grounded again. They remembered how they built a foothold in rural areas using their outdated telephone switches.

Being technologically backward does not mean you can't make money.

It's just a PHS phone, ZTE can do it, so can we.

It was precisely because of the experience gained from PHS (Personal Handyphone System) that Huawei mobile phones were developed later.

I can only say, it smells so good!

The memory flashed through his mind, and Takeshita Masato quickly came back to his senses.

After a moment of contemplation, he said, "We can agree to technology transfer, with the same requirements as Huawei."

"Yes, President."

"Also, the two companies have the same valuation, so we can't lose sight of the bigger picture for the sake of small gains."

By 1995, Huawei and ZTE were basically neck and neck, with ZTE even having a slight advantage in the second half of the year.

The first time the gap between the two will widen will be between next year and 2000.

However, ZTE later assessed that its research and development in areas such as PHS (Personal Handyphone System) had reached a level similar to Huawei's.

The two will only truly diverge when Huawei successfully expands into overseas markets thanks to its outstanding marketing capabilities, and with the widespread adoption of 4G technology.

However, with Takeshita Masato present in this lifetime, the difference between the two is estimated to be minimal during the period from 96 to 2000.

However, they will all be stronger than in their previous lives.

Because both can make money not only through switch technology, but also through PHS base stations and PHS mobile phones.

"Understood, please rest assured, Chairman."

Having obtained the bottom line for negotiations as permitted by his own chairman, Kenji Ono did not linger.

He is in a hurry and wants to reach a financing agreement with the two companies as soon as possible.

……

China, Special Economic Zone, Nanshan Shenyi Industrial Building.

This is the new office that Huawei found after it had accumulated some capital.

Although it is still not very eye-catching, only five stories high, it looks like a child in front of the Yilida Building with more than 30 stories next to it, but at least it has an elevator and air conditioning.

Unlike the earliest Huawei, whose office building was located in a dilapidated residential building.

Even worse, the main body of Huawei's office was actually on the roof of a residential building, with a shed made of plastic sheeting used for cover.

Basically, everyone's first impression is that this is just a shell company.

Yes, Huawei's early working environment was indeed that harsh.

It is precisely this hardship that has forged the fighting spirit of Huawei employees.

Huawei is willing to go where others are unwilling to go. Huawei cares deeply about markets that others don't care about.

As long as there is profit, Huawei's sales and engineers are willing to venture into even the most warring African warlord forces and the most murderous Latin American drug lord forces.

Ultimately, it was this relentless spirit that enabled Huawei to achieve its dominant position in the telecommunications equipment manufacturing industry. If certain countries hadn't been so unwilling to compete, Huawei would likely have also reached the pinnacle in the mobile phone market, surveying all others below.

"President Ono of Seikai Communications has given us new terms. Everyone, please take a look."

Once everyone was present, Ren Zhengfei handed out a copy of the document to each person, which contained the new investment terms offered by Xinghai Communications.

"They actually agreed to provide the funding, and they even gave us the technology for PHS phones."

Guo Ping was somewhat tempted and wanted to persuade his boss to agree.

"Yes, it's a money tree."

Ren Zhengfei was also very interested and wanted to agree immediately.

Perhaps due to the different era, Ren Zhengfei's mindset now is completely different from that of his previous life.

Although the technology of PHS (Personal Handyphone System) appeared in China in the 1990s, it was not widely promoted until the 21st century.

At that time, the whole world was about to enter the 3G era dominated by CDMA technology.

Compared to the promising CDMA technology route, Ren Zhengfei naturally had reason to look down on the outdated PHS technology.

Unfortunately, Mr. Ren misjudged the situation.

Because of the unsatisfactory performance of 3G communications, the government postponed the deployment of 3G technology.

Huawei's gamble has backfired, resulting in a dismal business outcome.

However, one of Huawei's defining characteristics is that it's not headstrong; if it can't beat someone, it will join them.

Therefore, Huawei later also gained a share of the PHS (Personal Handyphone System) market.

In this life, PHS (Personal Handyphone System) technology may have entered China earlier, and Huawei will not encounter the problems of the previous life. Therefore, Mr. Ren is very optimistic about the development of PHS at this time.

Time is always so interesting.

When there are people who are optimistic about something, there will naturally be people who have different opinions.

Zheng Baoyong, Huawei's technical chief, was one of the more hesitant ones.

"The PHS (Personal Handyphone System) technology is good, but it's destined to be a dead end. I think the company should stick to mobile communication base stations."

Zheng Baoyong was a major contributor to Huawei's early development. He led the research and development of Huawei's early switch equipment. Therefore, he had a great deal of influence in the company, second only to Ren Zhengfei.

No one dared to disregard his words, not even Ren Zhengfei.

Mr. Ren smiled and poured Zheng Baoyong a cup of hot tea, then responded solemnly.

"That makes a lot of sense. We really need to look forward. What do you think, Lao Xu?"

The "Old Xu" that Mr. Ren mentioned is Xu Wenwei, who is slightly older than "Little Xu" Xu Zhijun and joined Huawei earlier.

He has long been in charge of sales and has a keen understanding of the market.

"I support Mr. Zheng's opinion; it's time to develop some top-notch technology projects."

Xu Wenwei was very envious of Shencheng Bell, whose switch orders were so high that people had to queue up and beg to buy them.

Unlike Huawei, which has to go to great lengths to secure orders that Shencheng Bell doesn't care about.

Therefore, compared to the technology department, his marketing department was more eager for top-notch technology.

At this point, Li Yinan, another brilliant R&D staff member at Huawei, retorted.

"I think PHS phones are fine; we don't need to pursue high-end technology right now."

"The company lacks sufficient personnel and equipment, and cannot meet the research and development needs of cutting-edge technologies worldwide."

Although he was Zheng Baoyong's subordinate, the young and impetuous Li Yinan was not convinced at all.

He felt that he should be the number one person in the company's technical field.

Just before the two were about to start arguing again and get red in the face, Sun Yafang suddenly interrupted and stopped Zheng Baoyong from speaking.

"The technology of PHS phones is indeed very good, but can everyone be sure that it will definitely enter China?"

"The country's leaders in this regard could pay more attention to technologies from Europe and the United States."

Japan is considered a second-rate country in the world in the field of communication equipment research and development. Not only does China look down on it, but Japan itself also thinks so.

It was only forced to proceed due to government requirements.

It's somewhat similar to the fate of China Mobile during the 3G era. Knowing the technology was inadequate, they had no choice but to grit their teeth and push forward for the sake of national development.

However, China made the right bet, and the project eventually became one of the world's communication standards.

Japan suffered a crushing defeat, and its technology was abandoned by history.

"It should be fine. The country attaches great importance to the cooperation with Xinghai Group. Also, don't forget the Xinghai Internet Cafe project."

Ren Zhengfei was very confident that the PHS (Personal Handyphone System) technology could definitely enter China.

Leaving aside Xinghai Group's investment, the sheer volume of donations alone is enough to get the government to give it the green light in this regard.

He thought for a moment, then stood up abruptly and slammed his hand on the table with an air of dominance.

"In that case, tell President Ono that we want both mobile phone and PHS (Personal Handyphone System) technologies."

Why choose one? Just take them all at once.

Kenji Ono was stunned for a few seconds when he received the new financing terms from Huawei.

He hadn't expected Huawei to be so persistent in its pursuit of new technologies.

"Is this really how it has to be?"

"That's right, that's the condition."

Ren Zhengfei didn't give Kenji Ono a chance to refuse at all, adopting a stance that if they didn't give it to them, they would part ways.

Kenji Ono had no choice but to return to Tokyo again.

"Has Huawei's CEO Ren proposed new conditions again?"

"Yes, that guy is a scoundrel."

Kenji Ono felt very frustrated and even considered giving up on Huawei.

"As expected of President Ren, it's the same old style."

Takeshita Masato paid no attention to his subordinate's little schemes, and showed an appreciative expression on his face.

However, to prevent Huawei from making repeated exorbitant demands, he solemnly gave the order.

"Let's put the negotiations on hold for now, and then invite Huawei's key leaders to visit our Xinghai Group."

"The first stop is Xinghai Communications, and the second stop is the company headquarters."

The young man was also worried that Huawei's actions would never end, so he decided to showcase the company's strength.

In this way, Huawei will not add any new conditions.

He does value Huawei, but Huawei is not irreplaceable.

With him around, Xinghai Communications will become number one in the industry sooner or later.

"Yes, understand."

Kenji Ono was somewhat annoyed, feeling that he had made a big mistake.

He should have invited Huawei's leadership to visit Xinghai Communications earlier, which would have allowed him to showcase the company's strength.

Given the strength of Xinghai Group, Huawei's leadership would likely not have demanded such a high price.

However, upon further reflection, he realized that it was unlikely.

Emerging technology companies like Huawei, which started from humble beginnings, are not afraid of authority at all; on the contrary, they may even have the mentality of replacing it.

The most effective approach is still to treat each other with sincerity.

(End of this chapter)