Chapter 235: Announcing the Entrance into the Field of Home Computers
Translator: Nyoi-Bo Studio Editor: Nyoi-Bo Studio
It was like doubling their power. There were huge implications in Hua Yao joining the Xing Hai Alliance. Hua Yao was the hegemon in the communications sector. They sold the largest amount of mobile phones in the world, had countless patents, and earned annual revenues in the trillions. For example, if Hua Yao gave all their orders for chips that were used in their phones and 5G communication devices to Zhongxin International, it would be a contract worth tens of billions. If Hua Yao chose to use only domestic components for their products, such as memory chips from Purple Ray and NAND storage from Da Jiang, that would mean contracts worth another tens of billions. This would also lead to a loss of business for countless other foreign manufacturers.
In short, the alliance between the two companies was an alliance between the strong. It was akin to the champion and the runner-up joining hands to get rid of the third and fourth ranked players. There was no need to put into words who would be the final winner and loser.
…
After Zhongxin International had conquered the production techniques for the 7-nanometer chip and Hua Yao had joined the Xing Hai Alliance, Chen Jin did an inventory in private. He was calculating the number of trump cards he had acc.u.mulated. “There’s not much to talk about when it comes to the intelligent robots. There is no compet.i.tion for both the cleaning robot (Wa-wah) and the household service robot (Bang Bang). The combined sales volume of both products is about 20 million units annually, which means a net profit of about 50 billion. The Little Star learning machine has progressed to the third generation. A total of almost 150 million units have been sold to date. The markets for the primary school students, the junior high schoolers, and senior high schoolers have almost reached saturation point. There are only two ways that I can only make money from this: the new students who entered the schooling stage later and coming up with new editions. Only a maximum of 20 million units will be sold every year from now on. This will generate 70 billion of net profits. However, the ‘Little Star, Fourth Generation’ that will be specially made for college students, as well as the ‘Intelligent Brain Terminal’ that can be more conveniently used by consumers in general, are currently under development. They will be distributed in the market about two to three years later. There is a potential to make trillions more from the market when it comes to knowledge products.”
He continued, “The software product of the Work a.s.sistant is mainly targeting the programmers. It brings in a monthly revenue of about 5 billion. 70% or even more of the revenue is net profits… We can earn more than 40 billion every year. Besides the programmers, there are many R&D organizations that need the Work a.s.sistant. The functions of this software can be expanded continuously. It will be used by tens of millions of people in the future and bring in tens of billions in monthly revenues. The special effects rendering engine for movie-making and the game development engine could generate an estimated ten billion in net profits every year. We charge a minimum of 1 billion to build one virtual factory. The clients can either pay via cash or give us shares in their company. The barriers to using it are greater, but we cannot publicize it for now in order to avoid causing an earthquake on a geopolitical level… We can only let insiders use it. Making the Star Cloud system was purely spending money for the sake of self-entertainment. Currently, it brings no benefits, yet it had already burned through some hundreds of billions. Before we finally eliminate the Android system, I estimate that the annual expenditure for this project will be at least 30 billion… It consumes about 100 million every day. Moreover, Xing Hai Technologies receives dividends from the many different company shares that they hold. We receive more than 10 billion in dividends per year, but expenses for investment are more expensive.”
In summary, Chen Jin would earn about 180 billion every year. Excluding the salaries of 30,000 company staff and various operating costs (about 30 billion), including various types of large-scale R&D projects, investment activities, and other costly activities… The total annual expense was at least 150 billion.
Moreover, he was the type who spent as much as he earned. But, he still felt that he was not earning enough. The money was still insufficient. He had to start a few more projects and earn more money. Then, what kind of project should he start?
“I’ll try to avoid robbing the rice bowls of the local monopolies and businesses. But… there’s no need to be so polite about foreign businesses and their profits. I won’t be changing my style of taking every single grain of rice from them.” So, what were the major profitable businesses that belonged to overseas companies? Which of them could Chen Jin devour?
Home computers, otherwise known as the PC. When it came to personal computers, only the motherboards, memory, hard drives, power supplies, cha.s.sis, fans, and other components, could be produced domestically. The two most profitable products, the CPU and graphics card, were monopolized by several foreign companies such as intel, AMD, and Nvidia amongst others. For the operating system, there was Microsoft, who had been enjoying their windfall for decades. Their good old days were about to come to an end… At least in Z country’s market. They were about to meet their strongest match.
The project for the development of the home PC (including the operating system) had begun last year. They had achieved some results by now. It was estimated that they would launch the first 100% domestic PC by next year. The bottom layer architecture, CPU, graphics card, and operating system of this PC would all be locally made. Hence, it could be said that the intention to make a 100% domestic computer had been in Chen Jin’s plans all along. He would fix one last weakness and make money from it at the same time.
However, many people were negative about this project. The hardware component of the computer was hardly profitable and it was difficult to distribute the new computer operating system on a wide scale. It was also difficult for users to change their habits, not to mention how inconvenient a new operating system would feel. However, Lei Xiao Jun was positive about his ability and invested a sum of money into the project. As for Chen Jin, he was even more determined about this project and he invested tens of billions into it. Because he strongly believed that the home PC by Xing Hai Technologies would definitely achieve success!
…
On the 18th of July, Xing Hai Technologies announced that they would be entering the field of PCs and that they planned to create a 100% domestically produced computer.
The internet was in an uproar again. The majority of reviewers from the scientific communities and netizens with considerable knowledge about this topic were not enthusiastic about this. There were many voices predicting their failure.
“What is the current era? The home computer is about to be eliminated. They’re still trying to board this s.h.i.+p?”
“There is still a market for the home PC. Everyone has to get one for work, studies, or entertainment. It’s just that this market is stagnant. There have been no significant updates in the performance of the PC for nearly ten years. Nowadays, we can buy a high-end computer and use it for 5 or even 10 years and it still wouldn’t be outdated. Who would ever want to buy a new one?”
“Things do feel a lot safer when a domestic company is making our computers. They would create their own architecture and develop their own operating systems. But, this doesn’t mean that consumers would buy it. They would also have to create a complete ecosphere of applications. But Xing Hai Technologies…” At this point, the user stopped typing. Xing Hai Technologies was crazy.
“I suspect that Xing Hai Technologies definitely has the skills to produce a PC with their technological capabilities. But no matter how good your technology is, it doesn’t mean that the market will respond well to your product. This is especially true for users who are used to the Windows OS. It’s very difficult for them to change their habits and adapt to a new OS.”
“Ok, I’ll reserve my opinions. But it’s much less profitable to produce computers as compared to mobile phones. Many buy a new computer only once every five to ten years. The profit from the hardware is not high. There are profits to be made from the software, but they would need to have a large number of ready users. Can your computer create an impulse in consumers to change their old computers so that you are able to sell millions and even tens of millions of your product?”
“It’s good that someone is doing this. Recently, the prices of the memory chips and hard disks have been falling, causing many to be struck with the impulse to DIY their computer. However, the prices of CPU chips and graphics cards have been increasing. By entering this field, Xing Hai Technologies might just be the shark in this pool and teach the likes of Intel and Nvidia a lesson. I think that’s pretty good. Who knows, I might buy a computer from Xing Hai Technologies.”
…
The news of Xing Hai Technologies announcing their entrance into the field of home computers spread to the foreign media. The foreign netizens laughed until their stomach hurt. They ridiculed the company’s decision.
“I admire their bravery.”
“I’m reminded of Don Quixote challenging the windmills.”
“Even if we give them another 100 years, they’ll still be using the computers that we invented.”
“Hey, stupid farmer, you’re facing a giant.”
The upper management from Intel, Nvidia, and other companies held a meeting to discuss the matter. They did not attach much importance to the issue. The challenge presented by Xing Hai Technologies was not taken seriously at all.
Since IBM had launched its first home computer in the 1980s, they had been involved in squeezing out meaningless updates for almost 50 years. From the architecture to software ecology, they had established an all-encompa.s.sing regime. But a company wanted to challenge this kind of regime now?
They could only laugh in contempt.