Rebirth Tokyo 1986

Chapter 459 Don't throw the baby out with the bathwater
As soon as Scarin finished speaking, Masuoka Fujio, the chief scientist of the group's software division, shook his head.

“Brother Scully, I don’t think camera phones are inferior to music phones. At least if I had to choose, I would choose camera over music.”

Fujio Masuoka, as a researcher, was very interested in the camera function of mobile phones.

Because the camera function on mobile phones makes it easier for researchers to work.

For example, when you want to quickly save research data, it is much more convenient to take photos with your mobile phone than with a DSLR camera.

Therefore, even if the camera phone's pixel count is severely insufficient, he will still prioritize this feature.

Following closely behind, Masaharu Nishimura of Xinghai Software also spoke up.

"Indeed, I don't think camera phones are worse than music phones."

"If I had to choose, I would also choose a camera phone."

Masaharu Nishimura is a well-known photography enthusiast in the company and enjoys taking pictures in his spare time.

Therefore, even if the phone has low resolution, he is still very willing to support it.

As the rebuttals piled up, Sculley quickly realized that while the market for camera phones might not be as large as that for music phones right now, it certainly wasn't much smaller.

He quickly admitted his mistake, saying, "Sorry, I was a bit subjective. The camera phone is just as good."

Then, Scully looked at his chairman and asked.

"President, should we launch two different phones at the same time? Or should we launch a phone that combines photography and music playback?"

Given such a great sales opportunity, Masato Takeshita certainly wouldn't let it all slip away at once.

He stated bluntly, "Photography and music will be major innovations in the mobile phone industry, and we'd better take it one step at a time."

“We can definitely launch the Starry Sea camera phone in the second half of this year, and then launch the Starry Sea music phone next summer.”

"Finally, we will launch a phone that combines both features in the second half of next year."

To maximize company profits, you can't use up all the good ideas you come up with at once.

Music and photography are a golden opportunity to increase Xinghai mobile phone brand awareness and sales. If this opportunity is wasted, young people will be devastated.

It's worth noting that Sharp, the company that invented the camera phone in its previous life, rose to become the largest mobile phone manufacturer in Japan by leveraging the concept of photography.

Brands that were once thriving, such as Sony, Hitachi, and Panasonic, quickly became niche mobile phone brands in the Japanese market.

As for Samsung, the company that invented the music phone in its previous life, it reaped even greater rewards.

Not only did they further penetrate the European and American markets with the music function of their phones, but they also used this to become a world-class mobile phone manufacturer.

In addition to sales growth, camera phones and music phones can further enhance Xinghai's brand image among users.

The same phone, but the Xinghai phone can take pictures and play music that other phones can't, so it naturally creates the concept that the Xinghai phone is superior among users.

After all, if I have something that others don't, it's naturally more worthwhile to buy.

Of course, publicity must also keep up.

If the promotion doesn't keep up, even if you're the first in the world to do something, your fame will only be limited to a small area.

In this respect, Apple Inc. did a particularly good job.

Since Steve Jobs' return to the helm, Apple has consistently been a world-class company in terms of marketing.

MP3 players were invented by South Korean company Sehan and promoted by American company Diamond.

Ultimately, the products with the highest brand recognition and best sales volume were those launched by Apple.

It can be said that Steve Jobs had unparalleled talent in publicity.

Of course, Jobs' industrial aesthetic sense was also an important factor in making Apple products more attractive.

The handheld computer that Sculley launched during his tenure at Apple would definitely not have sold so poorly under Jobs.

It's so ugly, not attractive at all.

"Yes, I understand."

Scully nodded solemnly, preparing to carry out the research and development according to the chairman's instructions.

After discussing the innovations of Xinghai mobile phones, Masato Takeshita also gave some instructions to Xinghai Manufacturing, which is responsible for OEM business.

"Whether in Japan or the world, the mobile phone market is in a period of explosive growth."

"Xinghai Manufacturing must expand its scale to meet the company's production capacity requirements."

The mobile phone market is developing very rapidly.

In Japan, for example, less than 5% of all mobile phone users were mobile phone users in 90.

This was the result of Xinghai Group igniting the Japanese mobile phone market ahead of time; in the previous 90s, the number of mobile phone users in Japan was less than 2% of the population.

As of today, Japan has mobile phone users accounting for 65% of the population, and this number is expected to increase to at least 70% by the end of the year.

Furthermore, based on the current rate of user growth, Japan may even achieve one mobile phone per person by the end of the 20th century.

The same applies to Japan and the United States.

By the early 21st century at the latest, full coverage of mobile phones will be achievable.

For less developed countries like China, this timeframe may be delayed somewhat, but not by too long.

Xinghai Manufacturing must seize this opportunity to expand its rules and gain an edge in competition with companies like Foxconn.

"Don't worry, Chairman, we have been expanding our investment in the electronics manufacturing sector."

"Based on our current size, Xinghai Manufacturing is already the world's largest electronics manufacturing company."

Scarlin actually looked down on the low-profit electronics manufacturing plants, but he also knew the importance of the company's ability to provide employment.

Therefore, since taking office, he has been vigorously developing related businesses, and has even brought in several huge orders for the company.

For example, HP computers were manufactured by Xinghai, which he brought in.

Of course, Xinghai Manufacturing's orders are mainly provided by the group.

Whether it's Xinghai Mobile and Xinghai Computer within the group, or Nokia and Dell, in which the group holds shares, they all provide a large number of OEM orders for Xinghai Manufacturing.

“Very good, keep it up. I hope that one day in the future, Xinghai Manufacturing can become the largest electronics manufacturing plant in the four major regions of the United States, Japan, China and Europe.”

Chinese contract manufacturers are naturally the most important sector for Xinghai Manufacturing.

To date, it has accounted for 40% of Xinghai's manufacturing capacity.

However, Xinghai Manufacturing cannot be completely abandoned in the US, Japan, and Europe.

He wants to leverage the employed population to expand his influence in the three regions.

As for the resulting losses, they are only minor issues.

Given the size of Xinghai Manufacturing's parent company, Xinghai Technology, it can easily absorb the product internally.

However, in order to reduce related losses, Xinghai Manufacturing is constantly adjusting the layout of its contract manufacturing plants.

Xinghai Manufacturing's China branch currently focuses primarily on low- to mid-range mobile phone OEM manufacturing, which has low profit margins. Its branches in the US, Japan, and Europe, on the other hand, mainly handle higher-profit mid- to high-end OEM manufacturing.

This would better cover the high wage costs in developed countries and avoid serious losses. However, all of this is only a temporary solution.

As the technological capabilities of Chinese contract manufacturers improve, the proportion of contract manufacturing at Xinghai Manufacturing's China branch will continue to increase, eventually reaching around 70%. Xinghai Manufacturing's China branch will then achieve contract manufacturing coverage across the entire industry chain, from high-end to low-end.

This approach can maintain Xinghai Group's position in the US, Japan, and Europe, while also avoiding potential disadvantages for Xinghai Manufacturing in competition with peers such as Foxconn.

Following Xinghai Manufacturing is Xinghai Wafer, which is also the focus today.

"Koike-san, Zhang-san, I'm planning to acquire Texas Instruments and IBM's wafer fabs in Asia to develop our foundry business. What do you two think?"

The two looked at each other and ultimately decided that Junyoshi Koike, president of Seikan Semiconductor, would answer first.

"I think it's possible, but the acquisition size shouldn't be too large."

"There is currently a severe oversupply of wafer fabs globally, and it is difficult for us to find sufficient orders."

Since the emergence of the Starsea operating system in 1993, the world has begun a massive construction of wafer fabs.

The end result is a severe overcapacity of wafer fabs and chips worldwide.

What's even more critical is that the wafer manufacturing industry is in a period of rapid technological change.

The wafer fabs built this year will be outdated in a few years.

Therefore, even if Xinghai Wafer acquires related wafer fabs, it is best not to do so on a large scale.

"I also fully agree with President Koike's conservative view. Rather than making an acquisition, it's better to invest in building a factory independently."

Zhang Rujing also didn't want to acquire a bunch of wafer fabs that would soon become obsolete and have high chip manufacturing costs.

Therefore, he echoed Koike Jun's words and subtly persuaded his own chairman.

"I see. I was overthinking it."

Masato Takeshita readily admitted his mistake, then cheerfully continued, "The company will continue to develop according to your original plan. Let the professionals handle the professional matters."

It's a pity that Starsea Chips couldn't take advantage of the surge in chip prices in 99 to get a bigger share of the profits, but what the two people said did make a lot of sense.

Texas Instruments and IBM's Asian wafer fabs are gradually becoming outdated, and the cost of acquiring them is indeed too high.

After all, the period of soaring chip prices that began in 99 was very short, lasting less than a year.

Following the 2000 Nasdaq stock market crash, chip prices are poised for another downward cycle. Currently, Xinghai Group is acquiring too many wafer fabs; it's possible they'll end up losing all their profits, and the losses will far outweigh the gains.

After discussing Xinghai Technology, Masato Takeshita suddenly thought of the massive unemployment wave caused by the financial crisis.

"Roger, due to the financial crisis, many domestic companies have gone bankrupt. Even those that haven't gone bankrupt have started laying off employees or are planning to do so."

"We can't miss such a great opportunity. If any company really needs it, we'd be perfectly happy to set up a lab right across from their house."

Compared to established Japanese technology giants such as Toshiba and Fujitsu, Xinghai Technology is severely lacking in terms of historical and cultural foundation.

To catch up with or even surpass them, we must increase our efforts in attracting talent.

Previously, various factors prevented large-scale poaching, but now that there is an opportunity to freely select all kinds of talent, we must seize the opportunity.

"I understand, Chairman, please rest assured. We have been keeping a close eye on not only major companies, but also domestic research institutes."

Since taking charge of the company's human resources, Rogers has been busy poaching employees.

There is no place in Japan, or even the world, where he doesn't wield a hoe.

He's incredibly generous when it comes to poaching talent whenever the company needs him. Doubling salaries and building labs near people's homes are just standard practice.

Upon hearing this, Masato Takeshita was both pleased and somewhat surprised.

Are domestic research institutes also going to lay off staff?

"That should be it. I heard that the government is planning to make domestic research institutes cover their own losses."

"Ah, really?"

Masato Takeshita was utterly astonished; Japan was about to set a precedent for the times.

It's important to understand that government-supported national research institutions have nothing to do with making money.

Because many projects are unable to recoup their costs.

By doing this, aren't they forcing research institutes to dismiss their researchers?

"There is such a plan, but the government's finances seem to be struggling to keep up."

"This, this, this is a terrible idea. This proposal must be scrapped."

Takeshita Masato was speechless and planned to talk to Takeshita Noboru about it the next day.

For state-supported research institutes to operate on a self-financing model is tantamount to self-destruction. Japan is his core base; he can't allow those officials to run rampant.

"That's right, we can't let this policy go through."

"What a terrible idea! We have to get those guys to drop it."

Fujio Masuoka and Yasuo Tarui both reacted strongly, because as technology professionals, they were most able to appreciate the importance of scientific research.

If government-supported research institutes become self-sufficient, Japan's technological innovation capabilities will soon be completely lost.

Subsequently, Hiroaki Kobayashi, Masaharu Nishimura, and others also joined in the criticism and condemnation, expressing their hope that the Japanese government would not degenerate as a result.

Faced with everyone's righteous indignation, Rogers quickly offered an explanation.

"Well, not all sectors are self-sufficient. The electronics and semiconductor industries that our company focuses on are still operating as before."

"I just want to take advantage of this period of panic to poach as many people as possible."

The Japanese government isn't stupid; it naturally can't allow all state-supported research institutes to face the market.

Research institutes in fields such as electronics, semiconductors, automobiles, and chemicals will remain unchanged.

"That won't do either; we can't set a precedent for this."

"Besides, every research institute in Japan is very important. It may feel good to abandon them now, but it will be extremely difficult to rebuild them later."

It is easy to abolish but difficult to rebuild. Even if the government wants to rebuild the research institute in the future, it will be difficult to achieve the original level.

Because many studies cannot rely solely on records and material drawings; they require hands-on experience to be passed down.

After all, many things cannot be fully depicted by blueprints and materials alone; guidance from elders is necessary.

The most typical example is the American moon landing. Because those people either retired or didn't retire, they can't even start over in the 21st century.

Therefore, Masato Takeshita firmly opposed the Japanese government's short-sighted actions and insisted on preserving the domestic research institutes.

"That's right. Once the people involved finish their research, it's extremely difficult to pick up and restore many projects."

"If Xinghai Group wants to maintain its international leadership, it cannot sit idly by and watch its domestic scientific research capabilities weaken."

Yasuo Tarui once again unequivocally supported his chairman. He didn't want his life's work to be buried by the government's shortsightedness.

Japan must pursue a strategy of becoming a technologically advanced nation, and it can only pursue such a strategy.

(End of this chapter)