"What are you discussing?" Xie Wanqing pushed the door and saw the prototype and projector with black panels on the conference table. "Is this the new prototype recently developed by the Technology Center?"

"Yes, I was listening to Lao Ding introduce the functions of the new prototype. I was not proficient in technical matters, so it was very difficult for Lao Ding to introduce them. Why did you come here so early?" Zhang Ke wanted to discuss the separation of the technology R&D center and set up another company. He asked Xie Wanqing and Zhou You to have dinner together in the evening. Unexpectedly, Xie Wanqing came here in a blink of an eye.

"I received your call and I was about to go back to the city, but I came here," Xie Wanqing pulled out a chair, "New model, Lao Ding is waiting for you to come back to offer treasures. Lao Ding has been hiding for a while. Others want to appreciate it in advance, but they asked him to call it back under the pretext of keeping technology confidentiality. How do you feel after seeing it?"

Ding Huai said deflatedly: "The things developed after spending so much energy and funds are still far from what Ke Shao expected..."

"Who said that?" Zhang Ke said with a smile, "My expectations are not that high. I was quite surprised to see the R&D department come up with this, but it was not expressed with an exaggerated expression."

"You say it's impossible to replace DVD?" Ding Huai said in confusion.

"There is still some gap between technology and DVD," Zhang Ke nodded, "To be precise, it should be the transition technology between VCD and DVD..."

"The DVD format standard was proposed by Toshiba, Sony and other companies at the end of last year. As early as the middle of next year, mature models will be launched. We have invested so much money, but we have only developed transition technology. Moreover, the life cycle of transition technology is so short, it should not be of much value." Ding Huai said.

"From a technical perspective, I can't judge how much value it has; the potential commercial value is still considerable," Zhang Ke said with a smile. "Although mature DVD player will be released next year, the promotion of DVD involves the large-scale application of DVD digital video discs. Even if it is jointly promoted by current international giants, it will not be promoted until 1998 at the earliest. According to past practice, these international giants must first recover all the huge R&D funds invested in the early stage. The early price of DVDs will not be too low, and the focus of the early stage should be on the European and American markets..."

"...What will happen in China during this period?" Zhang Ke continued, "As far as I am concerned, the influx of many complete machine manufacturers and the rapid expansion of production capacity will eventually make the domestic DVD player market disorder and chaos. This time point should be around mid-1997. Complete machine manufacturers produce homogeneous VCDs, and there is no obvious technical gap between them. In the disordered and chaotic market, there is no possibility of relying on technology competition. In order to survive longer, there is only one way to go, which is a way to quench thirst..."

"Reduce the price?" Xie Wanqing asked.

"Yes, price reduction, knowing that price reduction is a poison to quench thirst, but it is inevitable that it will die immediately. It is not better than living for two more days to die," said Zhang Ke. "Why can miscellaneous video discs survive in the market? It is because those miscellaneous video discs are cheaper than brand discs. At present, the market for brand discs is not fully saturated, so they can maintain a higher price. Now, in order to establish the brand of Ida, we have invested almost regardless of cost in market promotion in the early stage. We are very lucky to have some success. It is certain that our success will greatly encourage latecomers, and the market means are convenient for reference. I believe that more disc brands will emerge soon, and the brand discs market will be saturated.

If a brand wants to survive, or if a major brand wants to compete for market share, it is possible to actively reduce prices. This is a vicious cycle. Because of the homogeneity of products, one price reduction, other manufacturers have to lower prices. We are no exception. Price convergence will quickly induce the second round of price reduction trend. Whole machine manufacturers that cannot effectively control costs will expel them from the market first. Whole machine manufacturers who can survive can only maintain meager profits... This process is very fast, and the time point is almost around the beginning of 1998. At this time, in order to pursue more profits and greater survival space, larger whole machine manufacturers will actively seek to lower the price of upstream components, the price of movement will continue to decline, and the decoding board technology monopoly

The breakdown is also likely to be broken, which will lead to the continuous decline in the price of VCD discs... Let's analyze these time points. DVD discs will be promoted in the overseas market until mid-1998 or the end of the year, and at a relatively high price. Before that, VCD in the domestic market would drop to a relatively low position due to price wars. The price gap between the two makes the process of eliminating VCDs in the domestic market relatively slow, and VCDs have a long survival cycle, not only in the domestic market, but also in developing countries. Of course, the ability of VCD discs to survive does not mean that VCD manufacturers will survive very well.

Go and intervene in the production and sales of DVDs and share the high profits of DVDs in the early stages. This is a more suitable path that powerful disc machine manufacturers can choose. However, in terms of time, it will be delayed until the middle of 1998 to intervene in the production of DVDs. It may not be until the end of 1998 or even later to bring the product to the market, because it is necessary to cultivate the peripheral disc market. Since mid-1997, the profit margin of VCD has been very narrow, but it will not be until mid-1998 or even later to find a new profit point, but the profit scale will not be too optimistic at the beginning. In this year and a half, as long as the timing is well grasped, the commercial value of super VCD can be fully discovered..."

"It's actually like this..." Ding Huai sighed, "It's not a waste of time!"

"Even from the perspective of technological accumulation, any technological breakthrough has great value," said Su Jindong. "According to Ke Shao's analysis, the R&D center will come up with mature models this year, and will start to slowly promote it at the beginning of next year. When the price war of VCD begins, all VCD manufacturers will inevitably be dragged into the mud. At that time, we focused on promoting new disc machines, using super VCD as our new profit point, and then actively wait for the arrival of the DVD era..."

Zhang Ke nodded and said, "There may be errors at the specific time point, and the market trend is quite different. I am looking forward to the smoke of gunpowder in the VCD market. In order not to let other disc manufacturers have any concerns about us, we must do a good job of confidentiality before the super VCD is launched on the market... Also, the visual disc production technology must also mature at the same time, with disc machines, no discs, or no market! Pirates have the benefits of piracy. Promoting a brand new standard disc machine in China is several times faster than that in the European and American markets..."

In the original historical trajectory, the emergence of super VCD can only be considered a useless rib and does not bring much profit to the disc manufacturer. The main reason is the issue of time. Xinke, Aido, BBK, etc., as the standard issue, the dispute was that the Ministry of Information Industry decided to formulate a unified standard in the middle of 1998. Although this standard later became a unified global standard, there was no place worthy of any pride at that time. At that time, it was just a technology that was indeed eliminated. Super VCD and DVD were launched at the same time, and even super VCD discs were rare on the market (due to compatibility, super VCD can read VCD discs). How valuable is it? In the end, it could only be sold at the price of VCD discs, and it could not compete with DVDs in the high-end market. Waiting for the price of DVDs to come, super VCD and VCD discs were slowly expelled from the market together.

Zhang Ke didn't expect that the R&D department could come up with a super VCD prototype two years in advance. With half a year, he could fully come up with a mature model, which gave him enough time to operate.

As for the issue of standards, Aida Electronics currently accounts for 40% of the disc player market. Aida Electronics' technical specifications represent at least one sub-standard form, not to mention Shao Zhigang, Sheng Qing and others directly control the huge network of pirated disc development, production and sales.

When Zhou You, Cai Yujuan and others came over, they did not mention this topic again, but discussed the separation of the technology center.

Authority was not formed in one day. Zhang Ke had enough prestige in this small circle at this time, which was proved by the miraculous achievements over the past two years. Zhang Ke expressed his plans. Although it was impossible to clearly state that the Asian financial crisis that was about to break out after the autumn of 1997 was about to break out in full swing, Xie Wanqing, Su Jindong, Ding Huai and others still supported his plan quite well.

The technology R&D center will be split out and a special technology company will be established. The research and development of video disc machines will also be under the responsibility of the technology company in the form of a commission.

In addition, Aida Electronics has established a 50% stake in the research and development of DVD movements in a joint venture with TI, which will also be placed under the name of technology companies.

Zhang Ke, Xie Wanqing, Su Jindong, Ding Huai, Zhou You and others' shareholding ratios in technology companies remain unchanged.

After dinner, the discussion ended. Zhang Ke and Wanqing took the same car back. In the car, Zhang Ke said to Wanqing: "The price war of disc machines seems to be inevitable. My original plan was that even if it was unavoidable, I should delay the time as much as possible. After all, it feels quite good to enjoy high profits. Even if Chintai and Jincheng jointly established Kewang Electronics, it will make money from it, and that is impossible. After all, in business, we cannot harm others and ourselves. I didn't expect that Lao Ding could tinker with super VCD, which is really surprising. I can't reveal my bad thoughts in front of Su Jindong and Ding Huai. Now it seems that the earlier the VCD price war, the more the value of super VCD will be suddenly. It's really exciting. I'm worried that Chintai and Jincheng will not invest enough here..."
Chapter completed!