Chapter 959 Adjustment Again
Li Daqi agreed with Song Chaoyuan's decision. He had always been in charge of Shenghua Telecom. He admitted that Song Yuanchao's view was correct. The rural market was indeed a market where Xiaolingtong could show its prowess. At a time when the speed of urban promotion in some areas was not satisfactory, starting from the rural areas was a good idea.
"Let's talk about VCD." After talking about Xiaolingtong, Song Chaoyuan spoke.
"Are you preparing to launch the DVD product?" Qin Zhengguo asked, and Song Chaoyuan nodded.
In recent years, the sales of VCDs have been quite good, because Song Chaoyuan obtained the VCD patent in advance and formed a VCD alliance with previous VCR manufacturers through patent exchange and patent licensing operations, making the VCD products of this era much better than in history.
In the original history, VCD products were extremely popular at first, but less than a year later, due to patent issues and the strong impact of the product on the original VCR production, major manufacturers carried out a series of operations on VCD products.
To put it bluntly, these actions directly ruined the situation, turning VCD from a hot commodity into a common commodity in an instant. Domestic VCD manufacturers sprang up overnight, and disorderly competition caused the market price of VCD products to plummet. The annual output of VCD was also frighteningly high. In less than two years, VCD fell from its high position to the abyss.
Song Yuanchao tried his best to avoid this situation from the very beginning and tried his best to find ways to extend the life of VCD products. However, there was one problem that could not be solved, and that was the inherent deficiency of VCD products.
Compared with the more advanced DVD, VCD products are inferior in terms of picture quality, clarity, data storage, technology, etc., so it is inevitable that VCD will be replaced by DVD. Even if Song Yuanchao tries his best to delay the life of VCD, it will not change this problem. He is very clear about this.
Just like the two products, Xiaolingtong and mobile phones, although Xiaolingtong's sales momentum is very strong at present, Song Yuanchao is still preparing to further promote Xiaolingtong. But in fact, Song Chaoyuan is also very clear that Xiaolingtong and VCD are both excessive products, and their defects cannot be compensated from a technical point of view.
At present, there is not much difference between Xiaolingtong and mobile phones, also known as big brothers, because today's mobile phones also use cellular technology. There is not much difference technically between the two and they belong to the same type of technology.
Both technologies are analog technologies. The difference lies in the power of the transmitted signals. The power of microcell is smaller. As a result, the manufacturing and size of the PHS product are lighter than that of the big brother, and the usage time is also longer.
However, analog technology also has inherent shortcomings, just like VCD technology, which cannot be changed. When digital technology emerged, digital mobile phones quickly replaced the previous analog technology, thus completing the technological leap in the mobile phone era.
"Should we wait a little longer? The VCD market is doing well right now, and we have just mastered the DVD technology. Isn't it a bit too early to launch it now?" Qin Zhengguo asked hesitantly.
"It's not too early." Song Chaoyuan shook his head and said, "It's been more than three years since the interview with VCD. The VCD manufacturers today are not as good as they were at the beginning, and the market is saturated to a certain extent. Think about it, what was the selling price when VCD was first launched, and what is the selling price now? If things continue like this, how long can the vitality of this product last?"
Qin Zhengguo concentrated for a while and nodded slightly. Song Chaoyuan was right. Today's VCD is no longer the VCD that just started. With the passage of time, both the production capacity and the market have changed. Although the current VCD sales and profits are still maintained at a certain level, if they continue, further decline is inevitable.
Qin Zhengguo figured it out quickly and agreed to launch DVD products. He also said that there would be no problem for Shenghua to launch DVD products. Although the previous Shenghua Electronics Factory was sold to Zhou Junhao, those equipment only needed some modifications to fully adapt to DVD production.
Song Yuanchao looked at Li Daqi and said to him, "When the base stations of Xiaolingtong reach a certain level, the paging station business can also be considered for sale. Find some time to contact them and see if there is anyone willing to take over."
Li Daqi was stunned for a moment and then he understood immediately. This was just like VCD. The emergence of Xiaolingtong made the original paging service have a substitute. Once the ownership rate of Xiaolingtong reached a certain level, naturally fewer people would use pagers.
Compared with Xiaolingtong, pagers only have paging functions. Even though Chinese pagers have launched stock market information functions, they are still not as convenient as Xiaolingtong. In addition, the current price of Xiaolingtong is similar to that of Chinese pagers, so consumers will naturally choose Xiaolingtong instead of pagers.
In the future, the gradual decline of the pager business is obvious, so there is no need to continue this business. While there is still some market for the paging business, selling it as soon as possible to cash in is the best option.
Li Daqi is very convinced of Song Chaoyuan's business judgment, because from the beginning of their cooperation to now, Song Yuanchao can be said to have made the right steps in every step, as if he had foresight.
Shenghua has been able to grow to its current size, and both Li Daqi and Qin Zhengguo understand that Shenghua may be able to do without any one of them, but it cannot do without Song Chaoyuan, because Song Chaoyuan is the real helmsman of Shenghua. Only in the hands of Song Yuanchao can the big ship of Shenghua ride the wind and waves.
Without mentioning other things, let's take the previous Shenghua Clothing as an example. Shenghua Clothing is the industry that Shenghua started from. In the beginning, most of Shenghua's funding came from Shenghua Clothing. Moreover, Shenghua Clothing is also the first Hong Kong enterprise in Pengcheng and the largest in scale.
Before the sale of Shenghua Clothing, many people within Shenghua were dissatisfied with Song Yuanchao's decision, especially many middle-level managers and senior executives, who believed that while Shenghua Clothing still had good performance, it was a loss-making decision for Song Chaoyuan to directly sell this "cash cow".
At that time, Shenghua had two main businesses: Shenghua Telecom and Shenghua Clothing. Of course, Shenghua Real Estate, Shenghua-controlled Sitter, Shenghua Electronics, etc. were also major components of Shenghua, but in terms of actual revenue, the former two had the highest revenue.
Shenghua Telecom is responsible for the pager and paging station business, which has grown very rapidly in the past few years. Together with Shenghua Telecom's traditional switch products, it continues to bring benefits to Shenghua.
As for Shenghua Clothing, it was originally the pillar industry of Shenghua and was internally known as Shenghua's cash cow. It has maintained relatively high returns over the years.
Compared with these two areas, real estate projects initially accounted for a relatively small proportion of Shenghua's overall investment. It was not until Song Yuanchao finalized projects such as the Shenghua Commercial Building, the previous alley renovation, and the development of a residential area near Tianlin in Shanghai that he gradually increased his investment proportion.
Shenghua Electronics mainly produces products, including drinking water equipment, pagers, and some small household appliances, etc., which are promoted as auxiliary products.
As for Sit , it goes without saying that although Shenghua controlled Sit, the equity ratio structure of Sit was somewhat complicated at the time, and the equity issue of state-owned assets had not been resolved, and it was also involved in the restructuring of Nandu. Therefore, although Sit is currently the largest national brand beverage manufacturer and instant noodle food manufacturer in China, for this reason, Shenghua’s actual income from Sit is only reflected in assets and books, and is not completely converted into actual financial income like Shenghua’s directly affiliated enterprises.
Selling Shenghua Clothing would lead to the disappearance of Shenghua's main source of income, so many people opposed it. However, Song Yuanchao still persuaded the main shareholders to make this decision.
After selling Shenghua Clothing, Shenghua invested its energy into other fields. VCD products were launched at this time. Then Shenghua took over Nandu, a long-established state-owned enterprise, through the restructuring of Nandu, thus completely resolving the equity issue of Si Te.
In addition, Shenghua has also increased its investment in Shenghua computers and communications to prepare for future planning. The launch of the Xiaolingtong system is also a project that was determined at the beginning. Judging from the current sales of Xiaolingtong, it has been proved that Song Yuanchao's decision was correct.
Compared with the growth of these new industries, the domestic textile industry (apparel industry) appears to be more prosperous, but in fact, with the incentive of competition and changes in the international situation, this business is becoming increasingly difficult.
Shortly after Shenghua Clothing was sold, the international community implemented a series of targeted measures against Chinese textile products, such as adjustments to textile quotas, monopoly lawsuits, etc. These products became increasingly difficult to sell in foreign markets, and profits became increasingly lower. On the basis of the overall huge export volume, the benefits generated actually declined.
These are all things that are laid out in the open. After seeing the real data, those people who had criticized Song Yuanchao's decision to sell Shenghua Clothing were completely speechless for a moment. Only then did they truly understand Song Yuanchao's foresight. If Shenghua Clothing had not been sold at that time, Shenghua Clothing would probably be in the same predicament as other companies. Although the business could still continue, it would be like chicken ribs, tasteless to eat and a pity to throw away. More importantly, it would not be so easy to sell Shenghua Clothing under this circumstance, at least the selling price would be much lower than before.
"This is not difficult. There were many companies that wanted to cooperate with us in the paging station business. I think it would be better to first select a few and let them cooperate with us by acquiring shares, and then use a year to complete the transition and transfer." Li Daqi thought for a while and replied.
Song Chaoyuan thought this was a good idea. Selling it all at once would make too much noise. After all, the paging station business also involved the post and telecommunications department, and the PHS business of Shenghua and the post and telecommunications department had just been launched. If the noise was made too loud, it would be bad if the post and telecommunications department had any ideas.
