Chapter 619 – Philips request for collaboration
The press conference was not considered a success as many electronic giants did not attend. The ones present were their representatives in China. Most companies did not expect Wind and Rain Electronics to introduce something good despite them introducing the VCD previously.
But when the companies knew Wind and Rain Electronics had successfully developed MPEG-II technology, all of them were stunned! They had been researching this technology after they saw the VCD. They wanted to use this technology to win Wind and Rain VCD and Aiwa VCD. But before their research was completed, Wind and Rain Electronics had introduced this new technology!
How was this possible? Wind and Rain Electronics was worth so little compared to the other electronics giants. How could they develop this technology so fast?
The companies compared Wind and Rain’s MPEG-II technology with their research. Both were similar, but before they could complete their research, Wind and Rain were already setting the industry’s standards!
After this press conference, all the electronics giant immediately response. Sony immediately held a conference to announce they had also developed this technology. But they did not release the news to the public.
Heitaro Nakajima immediately calls for a press conference. He said Sony only know how to imitate Aiwa. Sony had been following Aiwa’s footsteps and had never overtaken them! Sony had copied Aiwa’s Walkman, CD players. After Aiwa introduced VCD, Sony still wants to copy them!
Sony’s top management was furious!
What copy? We are also conducting our own research on new technologies. We are also researching new MPEG technologies. Our research had overlapped, but Aiwa cannot claim that we are copying them. How can we develop this technology by copying within this short period?
We also did not copy your Walkman and CD players. Heitaro Nakajima was too shameless!
Wind and Rain Electronics immediately announce that they had registered MPEG-II technologies. Sony should not try to copy their technologies. It will be against the copyright laws!
There were rumors that Sony’s President, Norio Ohga, had scolded the head of R&D in his office that day. He was so furious that he smashed an antique vase.
Norio Ohga instructed Sony’s R&D department to research the opposite of what Wind and Rain Electronics technology. Wind and Rain had used a single side and double layer structure for its technologies. They will do the opposite!
But when Sony was about to start their research, Toshiba announced they will be introducing a new technology which was double layer and double sided. They were ahead of Sony!
Double layer structure technology was the latest technology. Does Sony need to develop a triple layer structure technology? What’s the use of it? A disc to store 5 hours of video and audio? The purpose of this disc was to store songs and videos. What’s the use of having such high storages? It would be a waste!
But Sony immediately thought of collaborating with Toshiba. They want to use this Double layer and double-sided disc technology as the industry standards. This will counter Wind, and Rain Electronics single sided double layered technology.
Sony and Toshiba were top consumer electronics companies in the world. Wind and Rain and Aiwa could not compete with them in terms of assets. Aiwa and Wind and Rain had been doing well these few years. Aiwa’s sales had reached over 100 billion Yen, and their profits were over 10 billion Yen. But when converted to USD, its profits were not more than 100 million USD. How could they compete with Sony and Toshiba?
If Sony and Toshiba join hands to set the industry standards, they could prevent Wind and Rain Electronics’ technology to be accepted by the industry!
So, Norio Ohga went to Toshiba’s headquarters to meet with Toshiba’s President. It was unclear what price he paid, but Toshiba agrees to share their technologies with Sony.
“Manager Feng, our technology standards might be replaced by Toshiba and Sony. They had strong foundations, and it would be easier for them to set the industry standards with their technologies.” Jiang Wanmeng called Feng Yu to ask for help.
This was reality. Those two companies had set many industry standards before, and Wind and Rain Electronics were not as influential as them. There was no way to compete with them.
Once both companies had set the standards for this industry, they will dictate the direction of the technology research in the future. It will not be good for Wind and Rain Electronics and Aiwa.
Most of the profits would be earned by these two companies when they enter the DVD era. This was not what Feng Yu wanted!
The only solution was to work with a top consumer electronics giant. Many companies approached Wind and Rain Electronics for collaborations. One of them was Pioneer. The market leader for Laserdisc. They had gone to Heitaro Nakajima and expressed their intentions to work with Aiwa and Wind and Rain Electronics. They want to stop Sony and Toshiba from setting the industry standards.
Pioneer was one of the big names in the industry. It was an excellent choice to work with them. But Pioneer was too greedy. Not only they wanted the authorization to use the MPEG-II technology, they still wanted to share all the VCD technologies. In return, they would share their Laserdisc technologies with Wind and Rain electronics and Aiwa.
Feng Yu immediately told Heitaro Nakajima to reject them. What a joke? LD technology will be outdated soon. Currently, Pioneer was not the only company who had this LD technology. How can they use this technology to exchange with us? They still want to be authorized to use MPEG-II technology for free?
Without Pioneer’s support, Wind and Rain electronics and Aiwa were at the losing end against Sony and Toshiba. They will not be able to set industry standards.
But at the time, an Electronics Giant approached Wind and Rain Electronics. This company was Philips.
Philips impression for many consumers was shavers. But Philips started off selling lightbulbs! It made a breakthrough in radio technology later. They were one of the first few companies to introduce cassette music recorder.
Of course, it was Philips X-ray tubes that made them famous. It was used on medical devices, and Philips was one of the main competitors of Siemens in the medical devices industry.
Philips most successful product was the shaver. Before the end of the second quarter of 1994, Philips had sold more than 250 million shavers globally. It was way ahead of other brands.
Many people were also unaware that Philips was the inventor of the LaserDisc and optical communication system. Many music lovers should have heard of a record label PolyGram. It was also set up by Philips.
Digital Compact disc was also invented by Philips. Philips was also good at transistors and integrated circuits and chips. As such, their television was widely popular all over the world.
A few years ago, Philips had a restructuring. The company was streamlined to have better growth.
When Philips saw Wind and Rain Electronics introduced the VCD, they also start to research in this area. But sadly, they were like Sony and the rest of the companies. Their R&D was researching several fields at the same time, and this leads to slower progress. Their speed could not be compared to Aiwa and Wind and Rain.
Now, Wind and Rain Electronics had successfully developed MPEG-II technology and will be introducing Super VCD soon. Philips also had good technologies when it comes to compressing technology. They thought it would be best to collaborate with Wind and Rain electronics to set the industry standards. Together, they would be able to beat Toshiba and Sony!
So, the Vice president of Philips came to China.