A century-old wealthy family that rose from Shanghai

The next day, Chen Guangliang and Chen Wenjie arrived at Midea Group, accompanied by Midea President Yang Xiancheng.

"Mr. Chen, Mr. Chen, the patents for the Walkman have been successfully applied for in the United States and the United Kingdom, and our prototype has passed the final test. Everything has exceeded expectations!"

Huang Zhiming, the head of Midea Electronics, happily took out a Midea-branded Walkman.

After five years, Midea Electronics was finally completed, unlike Sony in its previous life, which completed it in less than a year.

Of course, the Sony Walkman in its previous life was a direct upgrade of the Pressman TCM-100 recorder, theoretically just removing the recording function and speaker, and adding high-fidelity sound quality.

Therefore, in its current form, Midea actually faced many challenges at the beginning, such as reducing the size, matching headphones, choosing batteries, and achieving high-fidelity sound quality.

Chen Guangliang took the Midea brand portable music player. It felt light in his hand and was also very beautiful overall.

He then put on his headphones and pressed play.

The recording inside is of Cantonese opera, and the sound quality is quite good.

How long can it play?

"Theoretically, it should be an hour, but it's at least fifty minutes."

Chen Guangliang was very satisfied with the product and immediately said, "Produce 3000 units immediately, first for sale in Hong Kong, and then globally three months later. What is the size of the factory?"

Huang Zhiming immediately said, "We are only shipping 3000 units per month. If sales are good, we will be able to increase production as soon as possible!"

Chen Guangliang immediately replied, "No, that would mean missing the global release. We need to start preparing to expand production now, with a minimum monthly shipment of 2 units. This is just the first step in expanding production. Secondly, do you have any specific marketing strategies for how to promote it?"

Huang Zhiming immediately said, "We plan to advertise on television."

Chen Guangliang rejected this idea, saying, "It would be difficult to introduce our product in a straightforward way, since it is an emerging product. Instead, we should select a group of employees from the Yangtze River Industrial Group and let them use our portable music player on the street or on the bus to and from work. This will allow the portable music player to truly appear in the lives of ordinary citizens, while we can first use print media to introduce this fashionable product."

Everyone's eyes lit up; this was undoubtedly the best form of publicity. Turning it into a fashion trend would inevitably attract many followers.

At this point, Chen Wenkai added, "Music tapes are also key; we recorded Sam Hui's first Cantonese album, 'Games Gamblers Play,' and put them together."

"Okay, we get it!"

As expected of father and son, both of them are natural-born business geniuses, that's what everyone thought at the time.

Chen Guangliang's suggestion saved the Walkman a significant amount of advertising costs and directly reduced promotion time, achieving the desired result in one step. In its previous life, Sony's Walkman initially shipped only 3000 units, far below expectations. However, sales surged later thanks to its association with street fashion.

After leaving Midea Electronics, Chen Guangliang and his son came to Midea Games and Entertainment.

Midea Group is divided into three major businesses: Midea Appliances, Midea Electronics, and Midea Entertainment. These three businesses naturally develop in synergy with each other, only with different product types.

In the US entertainment industry, there has been discussion about whether to develop 'game consoles' this year.

Lin Baitao's opinion was more conservative. He said, "The game console industry has a high barrier to entry. Hong Kong does not have the talent and industrial chain like the United States and Japan. Although Hong Kong has graduated a lot of electronic engineering students in recent years and has gradually accumulated a considerable number of talents, Japan has not yet formed a large-scale development of game consoles. Should we wait and see?"

His idea was simple: the boss had said things like, "Fun games are more important than excellent hardware," and "The technology of gaming equipment is not as useful as its price."

According to the boss, the future of Midea Games and Entertainment will likely focus on 'software'; it's not that they won't develop hardware, but rather that they will develop it at the lowest possible cost.

According to Moore's Law, a major change in integrated circuits occurs every eighteen months; the same applies to game consoles. If you invest in them now, you're competing with the US and Japan; if you invest later, you're standing on the shoulders of giants.

Chen Wenkai said, "As far as I know, many Japanese companies have already started developing game consoles. We are entering this market now not to compete with Japan and the United States, but to accumulate experience."

Upon hearing this, Lin Baitao said, "That's not bad! We're currently developing the game 'Space Invaders' and putting a lot of effort into it. As for the game console, we can first assemble a team."

After all, he is the general manager of the group, which means he is now the "head" of Yangtze River Industry, and the boss has been neglecting him for a long time.

At this point, Chan Kwong-leung said, "We need to invest in the research and development of Space Invaders, and we also need to invest in the research and development of game consoles. Without investment, how can Hong Kong's industries progress? In the long run, we will benefit the most."

Lin Baitao was taken aback by this. The old fox was indeed wiser; the boss's true intention was to cultivate the entire industry, not to focus on immediate gains or losses. He had learned something from Midea Group: in the early 70s, Midea Electronics had entered the 'electronic watch' industry, before Intel even entered the market. In 1971, Midea Electronics was already producing its first electronic watch, thus ushering in the era of electronic watches in Hong Kong.

Today, Japan's electronic watch industry, due to its frenzied expansion, has decimated American companies such as Intel, establishing a dominant position. However, Hong Kong's electronic watch industry has also developed and is trending towards surpassing the United States to become the world's second largest.

"Okay, I understand!"

Why did Chen Guangliang dare to invest?

First, the global video game industry will become the main battleground for his three sons.

Secondly, he is fostering the development of Hong Kong's electronics industry and expanding its prospects. Even if someone leaves to start their own business, it's like a spark igniting a fire.

Third, Midea Entertainment's future profits will definitely not be low, because software is always very profitable; in the past, just one game, "Space Invaders," already earned Tai Dong hundreds of millions of US dollars. And with Chen Guangliang playing so many games and producing them all, Midea Entertainment will undoubtedly become the global game software giant.

The business philosophy that "fun games are more important than excellent hardware" and "the technology of gaming equipment is more useful than its price" is not Chen Guangliang's original idea, but rather the words of Hiroshi Yamauchi, the president of Nintendo in his previous life; in this life, he is just using it for now.

When Midea Electronics successfully registered the patent for the "Walkman", it had already been disseminated by some Western media outlets, but most people were still somewhat confused about it.

When the word of the "Walkman" reached the ears of electronics manufacturers like Philips and Yamaha, their executives laughed it off.
"Nobody's crazy enough to run around wearing headphones! It's just a useless thing that crazy people like!"

"Hong Kong? What can they make? They can probably only make some knock-off products, right?"

A month later.

February 25th is the Lantern Festival.

Midea's portable music player was quietly launched, without much prior advertising, only an advertisement in the Oriental Daily News. On the day of its launch, approximately 200 employees left home, their first priority being to check out the portable music player. The moment they stepped out of their homes, they put on headphones and strapped the Midea portable music player to their belts.

"Ah Feng, what are you wearing on your head?" Guo Feng had just stepped out of the public housing estate in Wah Fu Estate when he ran into a familiar person in the community.

"Brother Jian, this is a portable music player that Midea Group just released. Look, this way, you can listen to music anytime, anywhere. This is fashion!"

"No way, something this small can play music? Let me try it, I don't believe it!"

Guo Feng took off his own headphones and put them on his childhood friend.

"Holy crap, it's Sam Hui's 'Games Gamblers Play', it's awesome!"

In thirty seconds, Guo Feng took the hairpin off Jian Ge's head and said with a smile, "Jian Ge, that's all for now, I have to get to work!"

"Don't go! Tell me where I can buy it?"

Lane Crawford, Wellcome supermarkets, and 7-Eleven all sell it!

Throughout the journey, Guo Feng wore headphones. On the bus heading to Kowloon, he was the most stylish guy; after getting off the bus, he was the most stylish guy on the street, attracting inquiries from people from time to time.

Meanwhile, even during working hours, 100 employees of Cheung Kong Industrial Group, wearing headphones, shuttle through Central, Wan Chai, Causeway Bay, Tsim Sha Tsui, and Mong Kok. They are all on a mission: to demonstrate Walkmans to the people of Hong Kong.

Many people are curious, including many foreigners.

The day after the Walkman was launched, several mainstream media outlets in Hong Kong unanimously listed it as a news focus—this was not an advertisement placed by Midea, but rather the novelty and topicality of the product itself, which became high-quality material that the media were vying for.

Oriental Daily News opened a special column on the corner of its front page with an eye-catching headline: "Hong Kong's technology industry adds another highlight - Walkman, a technological miracle that rewrites the music experience."

The article praises: "This portable music player, born in Hong Kong, is another milestone for the local Midea Group. It may go from Hong Kong to the world, just like instant noodles, arcade games, suitcases, Rubik's Cubes, and plastic flowers. It will break the prejudice that 'Hong Kong can only make knock-offs' and prove that it not only has efficient manufacturing but also leading R&D and innovation capabilities."

Sing Tao Daily, taking an industry perspective, wrote in its financial section: "Midea Group has unveiled another trump card! The Walkman may become the new benchmark for entertainment after arcade games. From early electronic watches to today's Walkman, Midea has always focused on world-class products. This product, which allows music to be 'on the go,' accurately targets young people's demand for 'convenient entertainment,' and its market prospects are worth looking forward to."

Ming Pao takes a closer look at people's lives, describing it in a lighthearted way in its lifestyle section: "Put on your headphones, and the world instantly becomes quiet—the Midea Walkman can not only play pop music, but also record the melodies of Cantonese opera, the powerful sounds of Peking opera, and the sweet sounds of Huangmei opera onto cassette tapes and carry them with you. Whether on your commute or during your leisure time, it can become a 'personal stage' that accompanies you. It's no wonder that such a practical and interesting product has become a hot topic among citizens as soon as it was launched."

After the newspapers were put on the shelves, the newsstands on the street were crowded with people stopping to read, and many citizens were discussing as they read:
"I didn't know this little thing could record Cantonese opera? I have to buy one for my parents!"

"Invented in Hong Kong? It's even newer than foreign products! I'll go check it out after get off work!"

Spontaneous media coverage led to a rapid increase in the Walkman's brand awareness, far exceeding expectations.

Alongside the media frenzy, Lane Crawford Group's sales channels are experiencing a surge in popularity.

At Lane Crawford, Dah Sing, and Chung Hwa Department Stores, the appliance counters were crowded with people who had come after hearing the news; at Wellcome supermarkets, people would stand on tiptoe to ask, "Are there any Walkmans left?"; at the checkout counters of 7-Eleven convenience stores, several sample units were picked up and examined repeatedly, and the staff had to demonstrate how to use them again and again.

At Lane Crawford department store in Causeway Bay, a middle-aged man held a Walkman and, after listening to a Cantonese opera excerpt played by the clerk, immediately decided to buy it: "My wife loves listening to Cantonese opera. Before, she could only listen to it at home with a radio. With this, she can listen to it when she goes for a walk in the park!"

Several young people nearby gathered around the sample and discussed: "Can it play 'Games Gamblers Play'? It would be even better if we could record our own songs!"

The queue in front of the counter grew longer and longer. The sales staff were busy packing and collecting payments, and occasionally shouted into the walkie-talkie: "Third floor, home appliance section, there are 20 portable music players left, need to restock!"

Such restocking requests were repeated throughout the day. The initial batch of 3000 Walkmans dwindled at a visible rate.

Meanwhile, a quiet change is taking place on the streets of Hong Kong: more and more young people are wearing headphones and carrying portable music players. They are either nodding along to the music on buses or immersing themselves in their own rhythm while strolling through the streets, becoming a fresh sight in the city.

Passersby couldn't help but turn their heads, some asking where to buy it, while others silently noted down the name "Midea Walkman," which quickly became a mainstream topic of conversation among citizens.

Meanwhile, although the Walkman has not yet been released globally, the news has already reached Europe, America, and Japan, attracting the attention of electronics manufacturers.

This time, they no longer doubted it; after all, Hong Kong people aren't fools.

At this time, electronics manufacturers such as Philips, Yamaha, and Sony sent people to Hong Kong to buy Walkmans and take them back for research.

The Philips executives who had initially mocked the equipment were now dumbfounded; the device they had looked down upon was actually so excellent.

Their smiles soon faded, because if they wanted to enter the portable music player market, they would need to pay patent fees. Previously, it was Midea Group that paid them patent fees—for the cassette tape patent.

"We underestimated Midea Group in Hong Kong!"

Sony.

Akio Morita was stunned once again. He was very familiar with Midea Group; he had almost been their assembly plant in Hong Kong. Back then, Midea Group's technology was weak, and they needed to buy transistors from Japan to assemble radios. And now, such an excellent product as the Walkman was actually invented by Midea Group in Hong Kong.

"Damn it, we will not recognize this patent!"

He was not reconciled.

In the field of cassette recorders, Philips and Sony are the global leaders. Midea Group only achieved good export results by using cheap production capacity and a little technology. Even so, Midea Group still needs to pay patent fees, and when setting industry standards, Midea Group is just a witness.

And now, products like the Walkman are actually made by Midea Group.

"Akio, in one month, Midea's Walkman will be released globally," his colleague Masaru Ibuka said, looking at the Walkman.

Akio Morita retorted defiantly, "We'll immediately establish a Walkman division and develop Sony's Walkman. Let's show them who the king of this field is."

What about the patent?

"Let's leave the patent issue aside for now." (End of Chapter)