Chapter 91 of 100

Chapter 91

16 min read3,894 words

In order to counter Nintendo's GameWatch, Li Xuan deliberately had the GameBoy launched in the Japanese market half a month earlier than planned, and also reduced the retail price in Japan. When he returned to Hong Kong, the sales summary for the first three days of the GameBoy's launch across Japan had already been compiled, reaching 30,800 units, with 33,700 game cartridges sold.

This was achieved despite the somewhat rushed promotional efforts, and even more encouragingly, sales of handheld game consoles had been on the rise over the past three days. This meant that the real sales peak had yet to come. With further promotion and word-of-mouth among players, the daily sales of the GameBoy would continue to grow. This sales result was more than twice the 5,000 units per day that Oriental Electronics had initially estimated.

At the same time, the launch of the GameBoy in other regions around the world was also being rolled out comprehensively. The two major markets that Oriental Electronics was most concerned about were undoubtedly North America and Europe. The newly established North American and European subsidiaries were about to face their first major test.

In the North American market, Oriental Electronics would invest as much as three million US dollars in promotional expenses, purchasing a large number of TV, newspaper, and magazine advertisements to launch a comprehensive promotional campaign.

Actually, the best time to launch a handheld game console in the United States is before Thanksgiving, the start of the annual shopping frenzy, when many parents would rack their brains to prepare a Christmas gift for their children.

Li Xuan, of course, could not wait that long. The GameBoy was not a product with very high technological content. If other manufacturers got ahead, although Oriental Electronics would not fear competition due to the high quality of its games, losing the first-mover advantage would cause many unnecessary losses.

As for the marketing efforts of the GameBoy in Europe, the European subsidiary of Oriental Electronics, headquartered in London, UK, was fully responsible. Marketing Director Ye Chengkang was in charge of the Japanese market, which Li Xuan particularly valued, while the CEO, Han Peng, personally coordinated the efforts in the United States and Europe. He had been traveling frequently, spending more time in the air over the Pacific and Atlantic Oceans than on the ground.

"Master Xuan, after our screening and evaluation, Kangjie Electronics and Dongsheng Electronics are the two factories with relatively complete management that can meet our quality requirements!"

With Han Peng away, Vice President of Operations He Guoyuan temporarily took charge of the company's affairs. As soon as Li Xuan arrived at the company, He Guoyuan came to give him a brief report on the main arrangements for the company's recent activities. Oriental Electronics did not plan to build a new factory to produce the GameBoy handheld game console but chose an outsourcing model.

The selection of the contract manufacturers was also very meticulous. First, the scale of the factories could not be too small, as they needed to meet Oriental Electronics' large order demands. Second, the management and quality control of the factories had to be relatively complete, at least ensuring that the game consoles produced met Oriental Electronics' quality standards. Finally, the contract manufacturers had to agree to accept supervision from Oriental Electronics, including quality supervision and supervision of the use of raw materials. Oriental Electronics would not allow the market to be flooded with counterfeit game consoles made from the same components.

"How is the expansion work of these two factories going?" Li Xuan asked.

"With our guarantee, Standard Chartered Bank has agreed to provide a loan of 10 million Hong Kong dollars to each of Kangjie and Dongsheng Electronics for expansion! The new production lines of both factories have been completed, and the newly hired employees are undergoing intensive training.

Starting next month, Kangjie Electronics will be able to produce 60,000 handheld game consoles per day, and if operating at full capacity, it can reach 75,000 units! Dongsheng Electronics, responsible for producing game cartridges, can produce 150,000 cartridges per day!" He Guoyuan had these figures memorized and reported them without hesitation.

Li Xuan nodded. Originally, Kangjie and Dongsheng were medium-sized electronics factories with around 100 employees, unable to meet Oriental Electronics' large-scale order demands. After obtaining the contract manufacturing orders from Oriental Electronics, both factories smoothly obtained the funds needed for expansion from the bank.

This was also part of Oriental Electronics' "Swarm" plan. A single flower does not make a spring, but a hundred flowers in full bloom make a garden of spring. Only the overall progress of Hong Kong's electronics industry could lay a solid foundation for Oriental Electronics' grand plan to fully enter the electronics industry with Hong Kong as its base.

In Li Xuan's vision, Oriental Electronics would be the queen bee, cultivating a large group of clearly divided and obedient worker bees in the Hong Kong hive. These worker bees would either be upstream suppliers providing components and raw materials to Oriental Electronics or downstream assembly plants performing contract manufacturing for Oriental Electronics.

Oriental Electronics should focus on the early R&D and later sales stages, while the entire production process would be controlled only at the most critical points, with the rest outsourced.

Some might say that Hong Kong's electronics industry foundation was weak and unsuitable for Li Xuan to establish his base, and that Silicon Valley, the center of high-tech development, would be a better place for him to develop.

Li Xuan had already given this issue deep thought. Silicon Valley had its advantages, but Hong Kong was not without its merits. For example, by investing 90 million Hong Kong dollars (50 million to the Chinese University of Hong Kong, 30 million to the University of Hong Kong, and 10 million to the Hong Kong Polytechnic University), Li Xuan had secured the entire electronic research strength of Hong Kong's universities. This investment, equivalent to less than 20 million US dollars, would only allow him to pick up the scraps left by IBM, Motorola, and Bell in prestigious universities like Stanford and Berkeley.

The Silicon Valley R&D center of Oriental Electronics was already in the process of being established. The United States was Oriental Electronics' most important overseas market and the holy land of technological innovation, so Oriental Electronics would naturally make meticulous plans. However, Li Xuan would distinguish between the main and secondary aspects, with Hong Kong being the easiest market for him to control.

Moreover, over the next few decades, the entire electronics manufacturing industry would rapidly shift to Asia, especially East and Southeast Asia. Throughout the 1980s and 1990s, Japan's electronics industry was pushing back against the United States and Europe. In the 21st century, Taiwanese and South Korean electronics companies began to dethrone Japanese companies.

Before Li Xuan's rebirth, the electronics industry on the Chinese mainland had already begun to upgrade and transform, gradually moving away from the status of a world factory and transitioning to brand management. A large number of electronics companies, represented by Haier, Huawei, and Lenovo, began to compete fiercely with European and American companies on a global scale.

Due to the rising human resource costs, Hong Kong's industry would continue to move northward over the next decade. However, compared to the labor costs of the United States and Japan, Hong Kong's labor costs were still relatively low. The reason why Hong Kong companies left no significant mark in the global electronics industry in the future was largely due to the British Hong Kong government.

First, the Hong Kong government's policy of non-intervention itself was a hindrance to the development of Hong Kong's electronics industry. In contrast, South Korea, Taiwan, and Singapore, the other three Asian tigers, all prioritized the electronics industry, especially the high-tech electronics industry represented by semiconductors, with policy, financial, and intellectual support.

Second, after the Sino-British negotiations determined the issue of Hong Kong's return, the entire Hong Kong society became restless and confused. Instead of providing proper guidance, the British Hong Kong government continuously fueled the situation. This not only caused a severe brain drain in Hong Kong but also led Hong Kong company owners to pursue short-term benefits, often with the mindset of emigrating overseas after making a fortune. As a result, the entire electronics industry in Hong Kong lacked long-term planning and layout.

This precisely caused Hong Kong companies to miss out on the opportunity to share in the dividends of the rapid economic growth of the mainland. Instead, a large number of Taiwanese companies began to invest heavily in the mainland in the 1990s, reaping huge profits.

Since Li Xuan was now aware of the historical trends, he did not want this historical tragedy to be repeated. Therefore, he was now working hard to build a network, allowing the entire Hong Kong electronics industry to develop according to his layout.

In Li Xuan's network, there were already the Lu family's television factory, which provided arcade screen displays to Oriental Electronics, the Hongfeng Electronics Company, which provided motherboard power supplies, the Xinuo Electronics Company, which provided various capacitors and resistors, and the Litong Electronics Company, which began to handle part of the arcade production last month. Recently, Kangjie Electronics and Dongsheng Electronics, responsible for the production of handheld game consoles and game cartridges, had also joined.

As Oriental Electronics' business continued to expand, more and more Hong Kong electronics companies would join the Oriental Electronics supply chain and grow together with Oriental Electronics.

These companies that joined the Oriental Electronics system would become increasingly closely integrated with Oriental Electronics through a combination of large orders, technical guidance, management training, and partial equity holdings, ultimately becoming worker bees in Li Xuan's envisioned "Swarm" system.

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