Video Editor

August 15, 1973, Los Angeles Convention Center.

The parking lot was already full of cars by 6 a.m.

This is Lemon Technology's fourth annual press conference.

Unlike before, a long queue had formed outside this time...

Scalpers are reselling admission tickets, with prices already reaching $500 per ticket.

"This is insane, absolutely insane!" the security captain said into the walkie-talkie. "At least five thousand people have arrived, and they're still pushing their way in!"

Backstage, Suning is conducting final checks.

"Boss, all the media are here." PR Director Lisa rushed in, panting. "The cover story reporter for Time magazine, the front-page editor of The Wall Street Journal, and three television networks..."

"David, is the demo unit working properly?" Suning asked David Fleming.

David's eyes were bloodshot, but he was in high spirits: "Perfect! Seventy-two hours of continuous testing, zero failures!"

Jack Walsh, standing to the side, held up an order book: "The dealer pre-orders have already exceeded 10,000, and the press conference hasn't even started yet."

Suning nodded and glanced at his watch: "According to the plan, it will start at eight o'clock sharp."

At eight o'clock sharp, the lights went out.

The spotlight shone on the center of the stage, and Suning walked out, still wearing his signature black turtleneck and jeans.

But everyone in the audience could sense that he was much more confident than he was three years ago.

"Good morning, everyone," Su Ning began, his voice resounding throughout the venue through the top-of-the-line speakers. "Three years ago, we launched the Lemon 1 here. Back then, some people said that personal computers were toys."

He paused and scanned the entire room.

"Two years ago, we released Lemon 2, which brought a graphical interface. At that time, some people said that ordinary people couldn't use something so complicated."

A soft chuckle came from the audience.

“A year ago, we released the Lemon 3, which brought us a floppy disk drive. At that time, some people said that the price was still too high.”

He paused again.

"Today, I want to tell you all—those people are wrong."

The large screen lit up, and a line of text appeared:

Lemon 4: More than just a computer, it's the future.

The audience burst into applause.

"First, look at this."

Behind Suning, the curtain slowly opened.

Under the spotlight, a machine stands quietly on the display stand.

The venue fell silent for three seconds, then erupted in a huge gasp.

The Lemon 4 is unlike any computer before it.

The body is an elegant pearl white, with lines as smooth as a work of art.

The display screen is no longer the bulky CRT, but a thinner and clearer improved version.

The keyboard features a completely new ergonomic design, with each key having the perfect curvature.

But the most eye-catching feature is the two devices on the side of the machine.

"On the left, a 5.25-inch floppy disk drive, with storage capacity increased to 160KB," Suning introduced. "On the right..."

He paused deliberately, building up the anticipation.

"The second floppy disk drive."

The whole place erupted.

"Two drives?!" someone in the audience shouted, standing up. "Why do we need two?"

Su Ning laughed: "Good question. In the past, if you wanted to copy a file, you needed a source disk and a target disk, which you would repeatedly plug and unplug. Now..."

He took out two floppy disks and inserted them into both drives at the same time.

On the graphical interface, he dragged a file icon from the left window to the right window.

"That's it. Copy complete."

Simple, intuitive, and elegant.

The applause lasted for a full minute.

"Now look inside." An anatomical diagram appeared on the large screen.

"The brand-new CPU is based on the MOS 6502 and is deeply customized. Its clock speed has been increased to 2MHz, and its performance is 1.5 times that of the Lemon 3."

The engineers in the audience gasped.

2MHz was top-of-the-line at the time.

"Standard memory is 64KB, expandable to 128KB—this is currently the highest configuration for personal computers."

"Built-in speaker, supports basic sound effects and simple music playback."

“Most importantly…” Suning switched the screen, “this.”

A palm-sized green circuit board appeared on the screen.

“We call it an ‘expansion card.’ The Lemon 4 motherboard has three expansion slots, allowing users to insert various functional cards—memory expansion cards, audio cards, and even… graphics cards and network cards that may appear in the future.”

He looked down at the audience: "What does this mean? It means that the Lemon 4 is not a fixed machine, but a platform. Today you buy it as an office computer, tomorrow you plug in a game cartridge and it becomes a game console. The day after tomorrow you plug in a professional cartridge and it becomes a design workstation."

This concept is revolutionary at this time.

Traditional computers are closed systems; they are exactly what they are when you buy them.

The Lemon 4 was the first to introduce the concept of "modular and upgradeable".

"Now that we've covered hardware, let's talk about software."

The large screen switches to showcase the brand-new Lemon OS 3.0.

The interface is more refined, and the icons are colorful...

Although it only has 16 colors, it is impressive enough in an era where monochrome monitors are the mainstream.

"A brand-new file management system that supports nested folders, allowing you to manage your data just like a real filing cabinet."

"The office software suite has been fully upgraded: the word processor supports mixed text and graphics and print preview; the spreadsheet supports the generation of complex formulas and charts; and the database program is more stable and efficient."

But the biggest surprise is yet to come.

"Today, I have three announcements to make." Suning held up three fingers. "First, the Lemon App Store is officially launched."

A brand new application, the app store interface, was displayed on the big screen.

The categories are listed above: Office, Education, Games, Tools...

"Users can purchase software created by third-party developers by mailing floppy disks. We have already signed contracts with fifty software companies, and the first batch of more than two hundred software programs have been launched."

The developers in the audience erupted in cheers.

This means they finally have a legitimate channel to sell their software.

"Secondly, the Lemon Developer Program has been upgraded. We provide a complete development toolkit and technical support, and anyone who develops software for Lemon OS can enjoy up to 70% of the sales revenue."

The revenue sharing ratio is astonishingly high.

In traditional channels, developers receive a maximum of 30%.

“Third…” Su Ning paused, “…the education plan.”

The screen displays the new price: "Lemon 4 Education Edition, for schools and teachers, is priced at $2499, $500 cheaper than the standard version. We are also donating twenty Lemon 4 units to each of the top 100 computer science departments across the United States for teaching purposes."

This is blatant market cultivation.

Students who are used to lemons at school will naturally recommend lemons after they graduate and start working.

Then finally, the most crucial moment arrived.

"Now, the question everyone's most concerned about," Su Ning looked at the audience, "how much does the Lemon Type 4 cost?"

The venue was so quiet you could hear someone breathing.

Prices appeared on the big screen:

Lemon 4 Standard Edition: $2999 (includes single floppy drive, 64KB memory)

Lemon 4 Deluxe Edition: $3499 (includes dual floppy drives and 128KB memory)

The price announcement elicited polarized reactions.

Ordinary consumers and small and medium-sized business owners cheered...

This price is only slightly higher than last year's Lemon 3, but the performance is more than double. However, the representatives of the competitors turned pale.

“2999…” the HP representative muttered to himself, “Our machines with the same configuration cost more than that…”

The IBM representative left the room and made a phone call: "Headquarters? The Lemon 4 is priced at 2999... Yes, we don't need to make it anymore, we won't be able to sell it even if we do."

This price was carefully calculated by Suning.

Lemon Technology now has a monthly production capacity of 8,000 units, and economies of scale have significantly reduced costs.

In addition, their control over the upstream supply chain allows them to purchase parts at prices more than 20% lower than their competitors.

At $2999, competitors would lose money if they made it.

But there is still room for profit in lemons.

This is a classic example of "overwhelming scale".

……

The sales area was packed as soon as the press conference ended.

"I want five hundred! The deluxe version!" Chicago's largest dealer shouted, holding up his checkbook.

"I want a thousand units! Cash on delivery!" The New York dealer was even more ruthless.

Jack Walsh and his twenty salesmen were working up a sweat.

Orders came in like snowflakes.

In the back-end monitoring room, real-time sales data flashes on the large screen:

开场10分钟：1200台开场30分钟：3500台开场1小时：6100台

"It's over 10,000!" The CFO stared at the screen, his hands trembling. "In just an hour and a half, we've broken 10,000 orders! At this rate, we can break 20,000 today!"

Suning remained calm: "Tell the production department to implement a three-shift system and increase monthly production capacity to 15,000 units."

"Boss, we might not be able to keep up with the demand for raw materials..."

"We're negotiating with suppliers, and we're willing to raise prices to ensure supply," Suning said. "Now is the time to seize market share, and we can't afford to falter."

"clear."

……

The next day, the Lemon 4 was on the front page of media outlets across the United States.

The Wall Street Journal headline reads: "Lemon 4 Redefines the Personal Computer: Modular Design Ushers in a New Era."

BusinessWeek's cover featured a photo of the Lemon 4, with the headline: "A $2999 Price Bomb: How Lemon Tech Crushed the Industry."

Time magazine went even further, placing Suning's photo on its cover with the headline: "Computer Revolutionary: He Makes the Future Accessible to Everyone."

On television, the science programs of the three major television networks were all analyzing the Lemon 4.

An NBC host said, "This isn't evolution, it's revolution. Dual floppy drives, expansion slots, a color graphical interface... all these features would have taken other companies at least three years to catch up with. But three years later, Lemon has already released the Model 7."

The industry is in a state of despair.

Data General's stock price fell 15% that day.

Digital Equipment Corporation (DEC) held an emergency board meeting to discuss whether to withdraw from the personal computer market...

The conclusion is: no withdrawal, but also no increase in investment; maintain the status quo.

HP is in the most awkward position.

They originally planned to release the new personal computer in October, priced at $4499.

After seeing the specifications and price of the Lemon 4, the launch event was canceled immediately.

"What's the point of releasing anything?" HP's CEO said at an internal meeting. "Our product is inferior to the Lemon 4 and costs 50% more. Releasing it would only be an insult."

The worst off are the small companies.

A startup called "Starry Sky Computers" spent two years developing a product that was originally scheduled to be released next week.

After seeing the news, the founder sat in his office for an entire afternoon, and finally told the team, "Let's disband! We've lost."

According to statistics, within a month of the release of the Lemon 4, 23 personal computer manufacturers across the United States declared bankruptcy or transformed their business models.

……

The product will be officially shipped two weeks later.

The first batch of users who received the machines gave incredibly positive feedback.

Tom, a programmer in Silicon Valley, wrote a lengthy review in Byte Magazine: "I bought the deluxe version. It boots up 40% faster than the Lemon 3. The dual floppy drives are so convenient—when writing programs, I put the compiler disk on the left and the source code disk on the right, doubling the efficiency. I inserted a memory card into the expansion slot, and now with 128KB of memory, I can run more complex programs."

Mike, the owner of an accounting firm in New York, said in an interview: "I bought ten for my employees. The new spreadsheet is so good; what used to take three days to do, I can now finish in half a day. $2999? It's a great deal; I'll break even in two months."

The school's response was even more enthusiastic.

The chair of the Computer Science Department at UC Berkeley said, "We received twenty machines donated by Lemon Technology. The teaching effect has been fantastic. The graphical interface makes it easier for students to understand programming concepts. I have decided that all introductory courses next year will use Lemon 4."

As word-of-mouth continued to spread, it drove even more sales.

In its first month of release, the Lemon 4 model achieved actual sales of over 20,000 units—not including the mountain of orders that followed.

The production line is running around the clock, but demand still exceeds supply.

……

At this time, Suning convened a meeting of its core team.

"What's your current market share?" he asked directly.

The marketing director pulled up the data: "According to the latest statistics, Lemon's market share in the personal computer market has reached 78%. If we only consider the price range below $3000, the market share is 92%."

"What about the competitors?"

"IBM didn't enter the market. DEC had a 5% share, mainly selling high-priced professional models. HP had 3%, and other smaller companies combined had 14%."

Su Ning nodded: "But the biggest threat is not them."

"Who is that?"

“Potential,” Suning said. “There may be new entrepreneurs creating disruptive things in their garages. There may be Japanese companies replicating our products at a lower cost. There may be Wall Street capital pouring money into supporting new challengers.”

He looked at his team: "So we can't relax. The development of Lemon 5 needs to be accelerated today. I want to shock the world again this time next year."

David Fleming raised his hand: "Boss, what's the direction of Type 5?"

“Three key points,” Suning said, holding up a finger. “First, further upgrade graphics capabilities, supporting more colors and higher resolutions. Second, a storage revolution—exploring the possibilities of hard drives. Third, networking—enabling computers to connect to each other.”

The concept of the internet was very advanced at the time.

Most computers are isolated islands.

But Suning knows that the future is interconnected.

……

The success of Lemon Type 4 drove the capital market into a frenzy.

Goldman Sachs analysts released a report stating, "Based on Lemon 4 sales data, we predict that Lemon Technology's revenue will exceed $300 million and net profit will reach $80 million in 1973. Based on the average price-to-earnings ratio of the technology industry, its market capitalization would exceed $1.5 billion if it went public now."

1.5 billion! That was an astronomical figure in 1974.

The investment bankers practically live at Lemon Technology's headquarters.

Morgan Stanley's managing director comes every day: "Mr. Gan, the time is right. If we go public now, the share price will at least triple!"

Merrill Lynch's representatives were even more direct: "We can guarantee that the market capitalization will exceed two billion on the day of the IPO!"

Suning's response remained the same: "No rush."

"Aren't you in a hurry?" Jack asked privately. "Boss, if we go public now, we'll all be billionaires."

Suning looked at him and said, "Jack, let me ask you this. If we go public now, we'll have to publish financial reports every quarter, be accountable to shareholders, and pursue short-term profits. What about our long-term strategy? Can we maintain the pace of launching new products every year? Will we still dare to invest heavily in R&D for technologies that might fail?"

Jack fell silent.

“Going public is inevitable,” Suning said, “but we need to be strong enough to be unaffected by short-term fluctuations in the capital market. So, it’s not enough now.”

He looked out the window; the sky over Los Angeles was very blue.

"What we want to do is not to become a valuable listed company, but to become a company that defines the times. There is a fundamental difference between the two."

"..."

Actually, the main reason is that Suning has a huge plan: to take advantage of the confusion and disorientation of its competitors to expand and accumulate technology patents as much as possible.

Otherwise, Lemon Technology will continue to be subject to others in the future, which is not something Suning is willing to accept.

...(End of chapter)