Chapter 338: Profit Sharing
Sony is not the only company that is getting anxious when seeing the fierce competition between Shirakawa Electric and Philips.
Inside the Hotel Okura, IBM's technical director Robert was talking on the phone with vice president Louis.
"Mr. President, I have to remind you again that Shirakawa Electric has joined forces with Philips to formulate relevant standards for CD-ROMs.
Soon they will submit an application to the international organization, and then the next step will be the optical drive.
Yes, the optical drive, the one that will replace our floppy drive and become the next generation storage specification, the damn optical drive."
"Relax Robert, this is just a trick by the opponent to put extreme pressure on us.
Now it depends on who can’t hold on first, but please believe me, they will be the first to bow their heads.
Because of our influence in the computer field, no one can replace us.”
Obviously Louis's opinion is different from Robert's, and his tone is much more relaxed at this moment.
Robert shook his head helplessly at his judgment .
“But Philips plus Sony are enough to attract the attention of the industry.
And don’t forget that we are not the only choice for them, like HP or Wang Laboratories.”
Louis on the other end of the phone held his breath. If there was anyone that IBM should be wary of, these two were on the list.
Especially the latter Wang Laboratories, which even openly wooed Microsoft and Intel in preparation for a head-on confrontation with IBM.
Although it failed to achieve its goal in the end due to various reasons, it still brought certain pressure to IBM.
Wang Laboratories' aggressive expansion in the market also squeezed out part of IBM's business.
Although he was reluctant to admit it, Louis had to face the existence of Wang Laboratories.
"Okay Robert, I'll pay attention. But please wait a little longer before the other party takes the next step.
I have a feeling that the other party will definitely choose us for cooperation in the computer business.
So if we take the initiative and have enough patience, they will be the first to bow their heads.”
"I hope so, Mr. President. I just want to remind you that time is running out."
After hanging up the phone, Robert cursed angrily.
It's that damn extreme pressure again. Who knows if the Japanese will buy it?
Although Philips and Sony do not make computers, they have related hardware products.
For example, Sony's floppy drive and Philips' keyboard, it wouldn't be difficult to further produce optical drives.
After all, the optical drive can be integrated with the host, or it can be made into a separate unit and sold separately.
IBM will regret it if it misses this opportunity.
…
In the office building of Shirakawa Electric in Ota Ward, Norio Ohga took a look at the layout and a flash of surprise appeared in his eyes.
This was his first time visiting Shirakawa Electric, and it was different from what he had imagined. It was a little too simple.
Not to mention the various exquisite tables and chairs, there is not even a single collectible that can show off one's status.
This is somewhat inconsistent with his identity as a young and wealthy president.
"I'm sorry, Mr. Ohga and Mr. Simon, because we're moving soon, the conditions are a bit simple, please don't mind."
Baichuan Feng seemed to know what they were surprised about, and explained with a smile.
In a short while, all the headquarters buildings in Shibuya will be put into use.
Currently, only the office part is retained in Ota Ward, and other areas are being gradually relocated.
So everything was kept simple, and Baichuan Feng was too lazy to make any more trouble.
Ohga Norio shook his head to indicate that it was okay, as he was only here to discuss business, not to visit.
Simon, who came all the way from Henan, looked at the calligraphy and painting on the wall with great interest.
In his eyes, the mysterious oriental characters seemed to be pregnant with magical powers. Of course, he didn't know whether the legend was true or not.
Sony and Philips came together today at the invitation of Shirakawa Kaede.
As for what it is, it is of course Shirakawa Electric's high-tech CD-ROM.
After Shirakawa Kaede's efforts to form alliances, Sony finally put aside its arrogant attitude and was willing to have a serious discussion with Shirakawa Electric about the formulation of optical disc storage specifications.
As for Philips, with IBM and Sony ahead of it, it is not qualified to jump around.
After everyone was seated, Baichuan Feng stood at the top and looked at everyone with a smile.
"Well, gentlemen, after a period of understanding, I believe everyone knows the broad prospects of CD-ROM.
So let’s talk about its standardization and promotion. ”
“In order to regulate the development of the CD industry and to guide other manufacturers to produce qualified CDs.
I think it is very necessary to formulate a unified CD-ROM specification."
Simon from Philips adjusted his tie and expressed his opinion in a reserved manner.
"With the three of us leading the formulation of standards, the development of next-generation specifications, and the specification of process requirements, I believe this will be more conducive to the development and advancement of digital optical discs."
Norio Ohga felt it necessary to set an example for other friendly companies and regulate their industry behavior.
"Of course," Baichuan Feng nodded with satisfaction, "This is why we are sitting here now."
Very good, we can finally sit together obediently and stop fighting for the boss position.
Seeing that everyone had set their plates and taken their knives and forks, Shirakawa Kaede nodded to signal Nakajima Heitaro to serve the dishes directly.
"Here are the specifications of the CD-ROM.
From sector content, scanning speed, data reading logic to the physical layer standard and manufacturing process of the optical disc, all are described in detail.
These are the parameters and specifications that Shirakawa Electric finally determined after investing a lot of manpower and material resources.
They are already the optimal solutions that can be achieved under current technical conditions.
Regarding this, both Philips and Sony have technical personnel following up.
Everyone is an expert in the field and can tell whether the data is true or false with just a glance.
After getting confirmation from their own technical staff, Norio Ohga and Simon both nodded in approval of Shirakawa Electric's CD-ROM data.
This also means that they recognize Shirakawa Electric's dominant position in the formulation of this standard.
After all, it is real data, which has made an indelible contribution to the exploration of CD storage.
"In addition to the specifications just mentioned, we define the scanning speed of a CD as 150KB/S. The higher the scanning multiple, the better the CD performance.
The lower the percentage of your computer's processor power used to simultaneously parse data, the better the disc's performance.
The reading wavelength is consistent with CD-DA, using 780nm near-infrared laser, so some processing techniques can be shared with CD-DA.
After distributing the materials in his hands, Heitaro Nakajima also stood up to act as a commentator and began to explain the determination of some parameters of the CD-ROM.
Sony and Philips both expressed no objection to these two points.
This is just the most basic performance parameter determination. As for the final product quality, it depends on your own ability.
For example, the scanning speed. Currently, the limit of Shirakawa Electric is 4 times the scanning speed. If we work hard, we estimate that we can reach 8 times the speed next year.
But Sony and Philips have the technological foundation and will probably catch up soon.
With its first-mover advantage, Shirakawa Electric can ensure that it never lags behind others.
As for other friendly competitors who are not at the conference, they can just wait for the standard to be announced before racking their brains to figure out how to implement it.
This is why Shirakawa Kaede must take the lead in formulating the CD-ROM standards.
If your foundation is not as good as others, then make up for it with your voice.
As Nakajima Heitaro went through the parameters one by one, most Sony and Philips manufacturers had no objections.
However, when it comes to the data error correction mechanism, Sony and Philips both opposed Shirakawa Electric's approach.
"Mr. Shirakawa, your company's error correction mechanism is too primitive and not efficient enough.
Sony and Philips have extensive experience in this regard.
I suggest that CD-ROMs use a three-layer error correction mechanism, which is divided into three modes for sequential checking.
As a data storage disc, the data trustworthiness must be high enough and there must be no erroneous data.
Otherwise it will ruin the prospect of widespread application of CD-ROM."
Sony's technical staff strongly recommended replacing the existing error correction mechanism.
Philips also expressed the same view. Shirakawa Kaede looked at Nakajima Heitaro and nodded in agreement after getting his confirmation.
"In that case, this part of the work will be handed over to Sony and Philips."
Norio Ohga and Simon both nodded with satisfaction. You see, Sony and Philips also made their own contributions to the CD-ROM standards.
Baichuan Feng knew what their intention was, which was simply to make everyone feel more justified when dividing the patent profits.
However, our technology in this area is indeed not as good as theirs. Now that we are sitting together to discuss standards, we might as well let them do some work.
After more than an hour of discussion, the various parameters of the CD-ROM had been determined.
After all, Shirakawa Electric has already done most of the work.
"Okay, now let's discuss the patent issue of CD-ROM."
Hearing this, both Ohga Norio and Simon perked up and sat up straight again.
"As for the production cost of CDs, it is roughly in the range of 8 to 12 cents. I think everyone agrees on this."
Shirakawa Electric had already calculated the data internally , and the Chiba factory was also under construction, so how could the production costs not be estimated in advance?
Similarly, Sony and Philips' CD factories have also started production. Although the disc formats are different, the production costs are basically the same.
Therefore, both parties have no objection to the cost of 8 to 12 cents per CD.
"Considering that CDs are relatively cheap to produce, the patent share will be based on the actual factory price."
The production cost of a CD is roughly 20 to 30 yen.
However, after the content is compressed through the master disc and then distributed to various content publishers, the price will not be the same.
The factory price is at least 100 to 200 yen per sheet. Based on this, a patent fee of no more than 25% of the selling price is acceptable.
Or a quarter of the product's increased profit is often used as a reference.
Since CDs have extremely low costs, Shirakawa Electric, Sony and Philips discussed and agreed that 10 cents per CD was a reasonable charge.
After deducting costs and royalties, CD manufacturers are still profitable.
Moreover, this thing makes profits by selling in large quantities. The more you produce, the lower the cost.
So in the end the three parties negotiated and set a standard of charging 10 cents in patent fees for each CD-ROM disc.
"Considering that Shirakawa Electric has developed the CD-ROM relatively completely, 8 cents is what we deserve."
Baichuan Feng took the lead in raising his knife and fork.
"Mr. Shirakawa, CD-ROM was developed based on the original CD technology, and the advance efforts of Sony and Philips are the most important.
So I think 40% each for Sony and Philips is reasonable.”
Ohga Norio did not stand by him and immediately raised a counter-opinion.
Simon of Philips nodded in approval.
"But CD-ROM is more complex, and the data formats it can hold are much richer than the original CD-DA.
Shirakawa Electric invested a huge amount of money and completed the format development on its own, so it should be the one who contributed the most.
Besides, if it weren't for us, Sony and Philips would have no intention of developing the CD-ROM format.
Therefore, Shirakawa Electric must be the biggest beneficiary, and there is no room for negotiation on this point.”
Faced with Baichuan Feng's tough words, Ohga Norio remained silent.
"How about 35% for Shirakawa Electric? The rest will be split equally between Sony and Philips."
Simon from Philips nodded in approval of Norio Ohga's proposal.
Baichuan Feng just shook his head and didn't even bother to think of any more words.
He doesn't do anything, but just wants to share the profits with me and keeps thinking about these good things.
"Mr. Shirakawa, it is a fact that CD-ROM has our technology .
Please understand that it is impossible for you to develop CD-ROM without the original CD technology.
So no matter what, Sony and Philips should get what they deserve, which is the industry norm."
It can be seen that Ohga Norio also has his own bottom line in negotiations, otherwise it would be difficult for him to explain to the headquarters.
Baichuan Feng hesitated for a while, and finally raised his eyes to look at the two of them.
"One price, 6 cents for Shirakawa Electric, otherwise there is no need to negotiate further."
Ohga Norio pondered for a few seconds, then lowered his head and exchanged a few words with the accompanying personnel, and finally nodded reluctantly in agreement.
Simon from Philips simply asked his assistant to write something down and then nodded in approval.
"Okay, in that case, the CD-ROM is officially confirmed."
After the profits were divided up, everyone's expressions became much more relaxed.
In the final analysis, this is a job that pays for free, and any extra cent you can earn is net profit.
This is a truly no-cost business, so Sony and Philips have nothing to be unhappy about.
"The CD-DA format standard has been officially released as a red book.
So what suggestions does Mr. Shirakawa have regarding CD-ROM standards? "
A smile returned to Ohga Norio's face, and he was even in the mood to ask Shirakawa Kaede about the naming of the CD-ROM standard.
Shirakawa Kaede looked at the blue "KITA" logo on the wall and smiled.
“Let’s call it Blue Book.”
