Video Editor

In August 1972, the Los Angeles Convention Center was packed to capacity.

Lemon Technology's third annual product launch event was ten times larger than the previous two.

"Ladies and gentlemen!" Suning stood on the stage with a microphone, wearing his signature jeans and black turtleneck. "Last year, Lemon promised a new product every year. Today, I'm here to fulfill that promise—Lemon 3!"

The spotlight shone on the center of the stage.

The moment the lid was lifted, the entire audience gasped.

That machine is so beautiful.

The laptop features a cream-colored body, smooth curves, a larger and thinner display, and a brand-new chiclet-style keyboard.

The most surprising thing is that it's attached to a strange, flat box.

"What is this?" someone shouted from the audience.

Suning laughed, "This is called a 'floppy disk drive.' A 5.25-inch floppy disk can store up to 110KB of data! Say goodbye to cumbersome punched paper tapes and magnetic tapes!"

The whole place erupted.

Reporters took photos frantically, and dealers stood up and cheered.

David Fleming was rubbing his hands excitedly backstage, exclaiming, "Boss, they bought it! They really bought it!"

Jack Walsh clutched the order book, his hands trembling. "Pre-orders have already surpassed five thousand units... and it's only been ten minutes since the show started!"

"This is a game-changing attack! From now on, Lemon Technology will have to keep running at full speed."

"Understood, boss."

……

The next day, Silicon Valley.

In a conference room at HP, several executives looked at the newspaper headlines with worry.

The headline reads, "Lemon 3 Released: Personal Computers Enter the Floppy Disk Era."

“We’re still developing magnetic tape storage systems…” the head of the hardware department rubbed his temples. “Why did they skip this step?”

"One product a year!" The marketing director slammed the newspaper on the table. "How can we keep up with this pace? It takes us at least two years from project initiation to market launch for a single product!"

“The problem is that they sell it too cheaply,” the CFO said with a bitter face. “The basic Lemon 3 is only $2999, and the deluxe version with a floppy disk drive is $3999. Our machines with similar functions sell for over $8,000.”

The same thing happened at Digital Equipment Corporation (DEC), Data General, and so on...

Almost all small and medium-sized computer manufacturers are holding emergency meetings.

A small company called Microsystems had planned to release its own personal computer in the fall.

After seeing the news, the founder immediately canceled the press conference.

“What else is there to release?” he said to his partner on the phone. “The Lemon 3 has a graphical interface, a floppy disk drive, and their increasingly sophisticated Lemon OS system… What are we going to compete with? Forget it, let’s shut the company down.”

According to later statistics from BusinessWeek, at least 17 small computer manufacturers in the United States declared bankruptcy or transformed their businesses in the second half of 1972.

……

At this time, Lemon Technology's sales hotline was inundated with calls.

"I want one hundred! No, two hundred!" Chicago's largest electronics dealer yelled over the phone. "Cash only! Payment today!"

Jack Walsh held the phone in one hand and frantically scribbled in his notebook with the other, "Mr. Smith, our first shipment won't arrive until October..."

"I don't care! Reserve it for me! I'll pay more!" The other party was extremely anxious. "Do you know how many people are asking about this right now? My customers say that if they don't have Lemon Type 3, they'll buy it from somewhere else!"

The same scene is playing out across the country.

The Boston distributor sent employees directly to Los Angeles to wait outside the Lemon Technology factory, saying, "We'll wait here! We'll take one away as soon as it comes out!"

The factory had to operate on three shifts.

Even increasing the production line from fifty units per day to one hundred and fifty units per day is still not enough.

"Boss, should we raise the price?" the CFO asked Su Ning. "The current price is too low, and the market demand is so high..."

Suning shook its head, "Let's not talk about it. What we want is market share, not short-term windfall profits. We'll continue to expand production capacity."

"But that's such a pity."

"We must take a long-term view! We cannot do things that are short-sighted and destructive."

"Uh? Okay! Boss, I know what to do."

New York, IBM headquarters.

Several vice presidents sat in the conference room, watching the technicians disassemble the Lemon 3 computer.

"It's a very clever design." The chief engineer carefully examined the motherboard. "It uses a lot of off-the-shelf commercial chips, and there aren't many parts that we designed ourselves, but they are well integrated."

"The key is this operating system." The software department head pointed to the screen. "Lemon OS 2.0 is much more mature than 1.0. The graphical interface is simple, but easy to use. The office software suite is also complete."

The VP of Marketing sighed, “A year ago we thought they were toys. Now… they’re stealing our potential customers for the next five years.”

IBM's main products at the time were the System/370 mainframe and the System/3 minicomputer.

The cheapest System/3 costs $15,000 and requires a dedicated air-conditioned server room and trained operators.

"The key is the speed of iteration," CEO Thomas Watson concluded. "It takes us three to five years to launch a new system. They release one every year. By the time we react, the market has already been shaped by them."

There was silence in the conference room.

"Should we make a personal computer too?" someone suggested.

“How would we do it? With our current process, it would take at least three years for the product to come out. By then, Lemon Technology will have already released the Model 6.” Another person shook their head. “Besides, we can’t keep our costs that low. The corporate culture is also different—we serve large enterprises and governments, and they make consumer electronics products.”

Ultimately, IBM decided to remain on the sidelines and not enter the personal computer market.

"Perhaps this is just a passing fad," said an old-school executive. "The real computing will still rely on our mainframes."

This decision later proved to be one of the biggest strategic blunders in IBM's history.

……

The capital market has the most sensitive instincts.

Three days after the press conference, Morgan Stanley analysts released a 50-page report titled: "Lemon Technology: Redefining the Personal Computer Industry".

The report stated: "Lemon Technology's 'one product per year' strategy created a strong competitive barrier. Competitors were unable to keep up with such a rapid pace of iteration, leading to Lemon Technology's projected 65% market share in the personal computer market by the end of 1973..."

Goldman Sachs, Merrill Lynch, Salomon Brothers... all the major investment banks are raising their valuations of Lemon Technology.

“Mr. Gan, if we go public now, the market value will be at least $500 million.” The managing director of Goldman Sachs personally flew to Los Angeles. “If you are willing, we can start the IPO process immediately.”

Suning's offices were packed with bankers in suits.

"No rush." ​​Suning reiterated, "Let's talk about it after the Lemon 4 is released."

"But the market can't wait!" said a Merrill Lynch representative. "Right now, investors are all asking how to buy Lemon Technology's stock. We receive hundreds of inquiries every day!"

"Then let them wait a little longer," Su Ning smiled. "Good wine needs no bush."

"..."

"Everyone, our goal at Lemon Technology is to become a unicorn, a true unicorn."

Although these financial giants were somewhat unwilling, they didn't have a good solution. They could only blame Suning for being too resolute.

Moreover, the technological advantages of Lemon Type 3 are real.

Currently, Lemon is the dominant player in the personal PC market in the United States, and they cannot even support other companies in the same industry.

……

David Fleming now has more than thirty engineers under his command.

They have a separate three-story research and development building in Santa Monica.

“Boss, look at this.” David excitedly showed off the new design. “We tested it, and the floppy disk read speed is twenty times faster than the magnetic tape! And the data is less prone to corruption.” “What about the software?” Suning asked.

"The entire office software suite has been updated. The word processor can now handle mixed text and images, the spreadsheets support formula calculations, and the database program is more stable," the software department head reported. "Furthermore, we are developing a 'software store' concept—users can purchase new software by mailing in floppy disks."

This idea was revolutionary at the time.

Traditional computer software is either included as a free gift or requires custom development.

Lemon Technology aims to build a software ecosystem.

"We want to get third-party developers willing to develop software for our platform," Suning said at an internal meeting. "Only when the software is abundant can the hardware be sold. It's a chicken-and-egg problem; we need to hatch the first chicken first."

"clear."

A month after the press conference, Lemon Technology announced the "Developer Program": anyone who develops software for Lemon OS can receive technical support and sales commissions.

The news excited programmers across the United States.

……

The biggest challenge Lemon Technology faces today is production capacity.

"Boss, the parts supply is running low." The supply chain director was so anxious his lips were blistered. "The delivery time for MOS Technology's 6502 chip is four months! The display supplier said they can only provide a maximum of five hundred panels a month..."

"Find alternative suppliers," Suning decisively ordered. "What about Japan? Toshiba, Hitachi, go and negotiate!"

"But the quality of Japanese products..."

"First, we need to solve the problem of whether we have it or not, then we need to solve the problem of whether it's good or not," Suning said. "At the same time, we invested in MOS Technology and became their shareholder to ensure priority supply."

"Yes! Boss."

This is the first time Suning has used capital to intervene in the upstream supply chain.

Lemon Technology invested $5 million in MOS Technology in exchange for a 15% stake and priority chip supply rights for the next three years.

Meanwhile, Suning sent people to Japan to negotiate with Toshiba, Sharp, and NEC.

Japanese companies were struggling to penetrate the US market, and the two sides quickly reached an agreement.

“Mr. Su, we can provide 1,000 monitor panels per month,” the Toshiba representative said. “The price is 20% lower than that of American products.”

"What about the quality?"

"This is a sample; you can test it."

The test results were surprising—Japanese monitors are of comparable quality to American ones, and in some aspects, they are even better.

"Sign the contract." Suning made the decision. "The first order is 3,000 yuan, and 1,500 yuan per month thereafter."

Thanks to these measures, the monthly production of the Lemon 3 reached 3,000 units by the end of 1972.

This number is already twice that of all other manufacturers in the entire industry combined.

Next, Suning's goal is to invest in the upstream supply chain, so for now, it's just using Lemon Computer to attract upstream manufacturers.

Once the upstream supply chain manufacturers have adapted to Lemon Computer's orders, that will be the time for Lemon Technology to reap the benefits.

……

Before Christmas in 1972, Suning convened a meeting of its core team.

"Who are the remaining competitors in the market?" he asked.

The marketing director opened the report: "IBM doesn't count; they haven't entered this market. DEC is still observing. HP is making it, but their HP 3000 is aimed at enterprises and doesn't directly compete with us."

"What about small companies?"

“Ninety percent have gone out of business or transformed their businesses,” Jack Walsh said. “The remaining few, such as Alpha Computer and Omega Systems, account for less than 5% of our sales.”

David laughed, "They're still selling machines that are operated with switches and indicator lights, without even a monitor. How can they compete with us?"

"Don't underestimate our opponents." Su Ning tapped the table. "There will always be new entrants in the market. We must remain vigilant."

He paused, then added, "Especially... has Apple Computer made any moves?"

The intelligence chief replied, "It's still in the garage. I heard they're developing their own machine, but progress is slow. They lack funds, and the parts are all salvaged from secondhand sources."

Su Ning nodded: "Keep an eye on it."

At the end of 1972, The Wall Street Journal did its annual review.

"The personal computer market experienced explosive growth in 1972, with total sales reaching 42,000 units, three times that of 1971. Lemon Technology sold 28,000 units, capturing a 67% market share. Hewlett-Packard, in second place, sold only 3,500 units, with an 8% share..."

The report provided a detailed analysis of Lemon Technology's success: "The one-product-per-year iteration strategy created a 'speed dominance.' By the time competitors finally managed to copy a product similar to the Lemon 2, the Lemon 3 had already been released. This strategy ensured that imitators were always a generation behind, eventually exiting the market due to outdated products..."

More importantly, the report points out: "Lemon Technology defined the standards for personal computers—graphical interfaces, ease of use, floppy disk storage, and office software suites. These have now become the industry's 'entry tickets.' Any new product that doesn't possess these features won't even be considered by consumers."

This means that Lemon Technology has not only won the market, but also gained the power to define the market.

On the eve of Christmas, Lemon Technology held a grand celebration banquet.

Fifty tables were set up in the newly rented warehouse in Santa Monica.

All the employees came, and there were nearly a thousand people including their families.

Suning stood on the stage, holding a wine glass: "A year ago, we were still crammed into that small office. Today, we are the largest personal computer manufacturer in the United States. All of this is thanks to each and every one of you!"

The whole crowd cheered.

“But I must remind everyone—” Suning changed the subject, “Success is temporary. If we are complacent, new challengers will emerge next year. What we need to do is not celebrate victory, but prepare for the next battle.”

He raised his glass: "The development of Lemon 4 has begun. In August 1973, we will once again shock the world!"

"Cheers!" Everyone raised their glasses.

David whispered to Jack from below the stage, "The boss is not letting us breathe."

“That’s why he’s the boss,” Jack laughed. “Keep up, buddy. This train isn’t stopping.”

After the celebration banquet, Suning returned to his office alone, while Lemon Technology had already moved to a brand new building.

Outside the window is the Los Angeles night view, brilliantly lit.

On the table lay the latest financial statements: revenue of $86 million and net profit of $21 million in 1972.

The numbers look impressive, but Suning knows that dangers lurk everywhere.

Although IBM hasn't entered the fray, if they were to actually do so, given IBM's resources, they would pose a huge threat.

Japanese companies are also eyeing the market.

And that apple in the garage...

More importantly, users' tastes will change.

Today's standards of success may be outdated tomorrow.

"We can't stop," he told himself. "One new product a year, I'll keep my word. Until no one can keep up."

The phone rang; it was my mother calling from Greentown, Alabama.

"Suning, I saw you on TV! You're amazing!" Mrs. Gan's voice was full of pride.

“Mom, this is just the beginning. Your son will become more and more amazing in the future,” Su Ning said gently.

“I know you’ve always thought further ahead than others since you were little.” Her mother paused. “Don’t overwork yourself. Remember to eat on time.”

After hanging up the phone, Suning opened the planning documents for "Lemon Type 4".

A new round of battle has begun.

This time, his goal is to completely dominate the market he created himself.

...(End of chapter)