Chapter 622 – Setting the Industry standards together Part 2 of 2
This was like bargaining at a bazaar. You kept saying that this thing is not good, but you are still staying there. This is a tactic for negotiation. This was what Thomas was doing.
Thomas smiled. “Then I shall not say anymore. Before I come here, we had discussed in our meeting. Philips and Wind and Rain Electronics will research and develop a writeable DVD together. We will develop a small device to record data into a DVD disc and set the standards for the DVD industry.”
This was what Feng Yu had expected. Philips was really a formidable partner.
“Let’s talk about the details.”
“Your company had achieved good results in China, but compared to us, you are still far behind. Our research lab is several times bigger than your company. We have more researchers and experts then yours. So, I suggest that we take charge of R&D. Your company had made significant contributions to this technology. So, when we set the industry standards, we should name it as Philips - Wind and Rain DVD standard.”
Go to hell. Are you treating me as an idiot? Philips - Wind and Rain DVD standard might sound like cooperation. But from looking at the name, people will know that we are just helping Philips as a follower. We are the ones who own MPEG-II technology!
Just like Yang-Mills theory. Yang Channing's name is in front, followed by Robert Mills. At that time, although Robert Mills received higher recognition, from the name of the theory, one could tell who contributed more in theory. Whoever contributed more, its name will be in front.
“Mr. Thomas. I think you have misunderstood one thing. We are the ones who developed this MPEG-II technology. We also own the patent for the first generation of technology. This technology is the core of the DVD Yes, your company might have more scientist and researcher than us. But are they better than us in this field? Can you all concentrate on researching on one technology? We are different. We are the experts in this field, and we only research into this MPEG technology. I dare to claim that no other companies are better than us when it comes to this field. Also, the research on writeable DVDs, we will also be ahead of other companies. You all should be the one accommodating to us and not the opposite way!”
Damn. Know your place!
“Mr. Feng, don’t forget that the industry standards set by us will be accepted by the consumers easier than your company. Did your company set the standards for VCD? You all only had marketed the VCD well. You all had the chance to set the industry standards for VCD. If we are the ones who developed this VCD, the current VHS players will already be obsolete.” Thomas took a sip of green tea.
Philips did not set any high requirements for this negotiation. When Thomas arrived in China, he decided to set higher standards. But after looking at Wind and Rain company’s culture, he chose to stick with his company’s original requirements. He cannot be too greedy.
Thomas’s initial plan was to let Philips set the industry standards. Both companies will conduct research and development together and share all related technologies. If he could get a stake of Wind and Rain Electronics, it would be better. After chatting with Feng Yu, he decided to give in and followed his company’s directions. Both companies’ will be used in industry standards. But Philips must be in front.
Feng Yu was not happy with this decision. You want to put Wind and Rain Electronics name in front of Philips? Are you kidding me? Do you think Wind and Rain Electronics is bigger than Philips?
“Mr. Thomas, are you thinking that Wind and Rain Electronics is not big enough to set the industry standards?”
Although Thomas felt this way, he did not reply Feng Yu. His facial expression had shown what he was thinking.
“If our Wind and Rain Electronics can set and implement the industry standards ourselves, why should we cooperate with Philips? Mr. Thomas should also know that this MPEG-II technology is jointly developed by Aiwa and us. Then what do you think if Aiwa chooses to work with Japan’s Sony instead? Don’t you think it will be easier to set the industry standards if Aiwa cooperates with Sony? Don’t forget that Aiwa had worked with Sony for quite some time in the past.”
“We shall not say how much losses will Wind and Rain Electronics face if you asked Aiwa to set the industry standards. It is impossible for Aiwa to work with Sony. Aiwa had snatched the Walkman market from Sony and Aiwa’s market share of the Walking market is almost 70%. Currently, Sony is only left with less than 20% market share, and Aiwa is starting to snatch the CD player market share from Sony. Aiwa’s biggest competitor is Sony. Why would Aiwa choose to work with Sony?” Thomas smiled and asked Feng Yu back.
Before Thomas came to China, he had done his homework. This information was not any secrets. He knows about these when he asked around.
Oh, you have done your homework? But the more you know, the easier it is for me to hoodwink you.
“You are right, and it is also because of the things you said. If Aiwa approached Sony to collaborate and offered to join hands to control the Walkman and CD player market, do you think Sony will reject this offer?!”
Thomas’s face changes. Indeed, Aiwa was willing to give up some of the Walkman and CD player market share to Sony, Sony would surely work with them. But Thomas did not know it was impossible for Sony and Aiwa to work together in this lifetime!
Heitaro Nakajima had insulted Sony’s Acting President Norio Ohga publicly in front of the media before. Norio Ohga will never agree to cooperate with Aiwa. If given a chance, he would want to step all over Aiwa! If it weren’t for Aiwa disrupting his plans, he would be the President of Sony now!
“Mr. Feng, Aiwa is Aiwa and not Wind and Rain Electronics. If Aiwa were to set the industry standards, what benefit will Wind and Rain Electronics get? I know Wind and Rain Electronics had been collaborating with Aiwa and shared many technologies. But are you willing to help another brand grow?” Thomas decided to use branding to persuade Feng Yu.
“Oh, I forgot to tell you that I am not only the founder of Wind and Rain Electronics. I am also the major shareholder of Aiwa. To me, both companies are the same. In fact, I own more shares in Aiwa than Wind and Rain Electronics. Didn’t you notice that there is a sub-brand under Aiwa which is in Chinese?” Feng Yu smiled and replied.
What? Feng Yu is the major shareholder of Aiwa?!
That means both companies are the same as Feng Yu. No wonder both companies cooperated in so many projects and Aiwa was able to open up the Chinese market.
Damn. This way, Philips will not have any advantage in this negotiation.
“Then how do you want to cooperate?”
“Simple. Wind and Rain Electronics will be doing the R&D, and Philips will assist us. We will set the industry standards together, and it will be called Wind and Rain Philips DVD standards. There should be other companies that are working with Philips. Get them to recognize this standard. We will own the writeable DVD technology patent, and Philip will enjoy lifetime authorization to use this technology. At the same time, we will authorize Philips to use our MPEG and VCD technologies for free. We will share the market with you all.”
The patent belongs to the other party, but Philips will get the rights to use the patents. This deal was not beneficial to Philips. But if they do not agree, Philips will be kicked out of this game. They will not even get a bite of the cake.
“Mr. Feng, I need to discuss with my headquarters before I can give you an answer.” Thomas’s proud look on his face was long gone. Now, Feng Yu had the upper hand.
Feng Yu stretched out his hand: “Of course. I will wait for your good news. If Mr. Thomas does not mind, stay at our Wind and Rain Electronics hotel tonight.”