We're building a super chaebol in Hong Kong
#1077 - Motorola faces wave of cancellations
Three days after Wei Li and Landon Moore concluded their press conference, they boarded a plane together to return to Hong Kong.
The headquarters of Hutchison Telecom was in Hong Kong, and their presence was needed to oversee the overall situation.
Moreover, they had to return, because the sales of the Yun Sheng S4 mobile phone were simply too terrifying.
Judging from the market response in the past two days, the Yun Sheng S4 mobile phone was clearly a great success.
For example, they were staying at a hotel next to Times Square, and the Oracle brand experience store was downstairs. They were naturally well aware of how bustling the store was.
It could be said that at the Oracle brand experience store's Times Square flagship location, the line was basically there from morning till night for the past two days.
Although many people were just there to experience this innovative product, quite a few were also making purchases.
And, most importantly, some people who had only intended to try it out developed a strong desire to buy after trying it, and thus, these people were transformed into buyers.
In just two days, all Oracle brand experience stores had successively posted announcements stating that the Yun Sheng S4 mobile phone inventory in the stores was sold out.
To continue purchasing, one could only wait for the next batch of phones, and these could only be purchased through pre-order, with the delivery time based on the pre-order time.
This was also the reason why Wei Li and Landon Moore were rushing back to Hong Kong.
They needed to go back to closely monitor production and accelerate manufacturing.
The 100,000 Yun Sheng S4 mobile phones that were initially stocked were sold out in just 2 days. No one had expected such sales volume.
When this news spread, it indeed shocked many people around the world who were paying attention to this product.
Previously, Motorola's new product exceeding 100,000 pre-orders in two months had already made people in Europe and the United States feel that Motorola had achieved a great victory and officially surpassed the Yun Sheng series of mobile phones.
The demo phones had not been sold, so users who wanted to try them out could still do so.
Although many people regretted not being able to get a phone immediately, they still couldn't resist choosing to purchase through pre-order.
Because the Oracle brand experience stores had publicly announced that after pre-ordering, they would be able to pick up the goods in as little as half a month.
This Yun Sheng S4 model was currently being produced simultaneously in Peng City, Hong Kong, and Hao City, with a daily production capacity of over 30,000 units. This production capacity was sufficient to cope with the current orders.
Moreover, with the current capabilities of Dali Logistics, these products could be quickly transported to various major markets in the form of air freight. Saying half a month was actually an overestimate.
Although Su Cheng did not manage the release of the Yun Sheng S4 mobile phone, he paid special attention to it, after all, it was making money for him.
Upon learning that 100,000 units were sold in two days, Su Cheng was also very satisfied.
Since the chips, logistics, and manufacturing plant were all his own private assets, the actual cost of a Yun Sheng S4 mobile phone, after deducting all operating costs, material costs, labor costs, etc., ultimately created a profit of at least $1,500 per unit for Su Cheng!
100,000 units in two days was equivalent to creating $150 million for him, which, converted to Hong Kong dollars, was approximately 800 million Hong Kong dollars in profit.
This was just two days. Even if Su Cheng was rich, he wouldn't disregard 800 million Hong Kong dollars.
It should be known that in Hong Kong at this time, having assets exceeding 100 million Hong Kong dollars already meant having a certain status.
After returning to Hong Kong, Wei Li and Landon Moore focused all their efforts on monitoring production capacity and ensuring quality. Every batch of qualified products was quickly transported to the world through Hong Kong's Kai Tak International Airport.
And every day, Landon Moore would report the previous day's pre-order sales data for the Yun Sheng S4 mobile phone to Su Cheng.
July 4th, 38,792 pre-orders, totaling 138,597 units sold;
July 5th, 36,888 pre-orders, totaling 175,485 units sold;
July 6th, 33,521 pre-orders, totaling 209,006 units sold;
In just 5 days, the Yun Sheng S4 mobile phone officially broke through 200,000 units in sales!
And that's not all. Next, the sales of the Yun Sheng S4 mobile phone continued to rise. Although it was less each day, the total sales were enough to shock people.
July 7th, 32,977 pre-orders, totaling 241,983 units sold;
July 8th, 30,667 pre-orders, totaling 272,650 units sold;
July 9th, 24,334 pre-orders, totaling 299,984 units sold;
July 10th, 21,331 pre-orders, totaling 321,315 units sold;
… …
Moreover, people all over the world also discovered that although the order said it would take 15 days or more, they would actually receive a call to pick up the goods within a week of placing the order.
The quality of this product continued the consistent quality of the Yun Sheng series, and the reputation was getting better and better. The result of a good reputation was naturally more people buying it.
The sales of the Yun Sheng S4 mobile phone were basically announced to the public every day, and these announced data were also reprinted by major media around the world.
Everyone knew that this product was destined to be a successful product, destined to be a best-selling product.
It should be known that this era is not like later generations, where basically everyone has one or even multiple mobile phones. The sales of a single model easily reach millions, tens of millions, or even hundreds of millions of units. This is basically impossible in this era.
In this era, mobile phones are still luxury goods. Not many people can afford them. Only the rich can afford them. Under the market share divided by many brands, it is already a very awesome thing for a product to sell 100,000 units.
Therefore, when Motorola's new mobile phone sold 100,000 units in two months, everyone thought that Motorola had succeeded and had the possibility of surpassing the Yun Sheng series of mobile phones.
After all, 100,000 units in sales was already a very exaggerated and remarkable achievement.
But what was the result? The Yun Sheng S4 mobile phone slapped everyone's faces in just 2 days, letting everyone know who was the king of mobile communication devices!
All Yun Sheng brand fans were proud and proud of their favorite brand at this moment. This was the brand they liked. In front of Yun Sheng brand mobile phones, other mobile phone brands were simply garbage!
The London Times even published an article saying: The success of Yun Sheng S4 is well deserved. Its success comes from its innovation, quality, and reputation!
Some beautiful country congressmen even tried to propose an opinion in the House of Representatives, hoping to judge Yun Sheng S4 as a monopoly product.
However, this proposal was met with opposition from many congressmen, who were basically representing the interests of major American technology companies such as IBM, Texas Instruments, Hewlett-Packard, and so on.
The main reason for their opposition, besides their good relationship with Su Cheng, was that if even successful innovation in technology products was defined as monopoly, who would bother to innovate in the future? Who would develop new products? How could technology continue to advance?
The matter in the House of Representatives quickly reached Su Cheng's ears.
He was quite surprised to learn of this.
He hadn't expected that he would unknowingly gain so much support in the United States.
While Hutchison Telecom was celebrating the strong sales of its new product, Motorola was facing difficulties, leaving even its top executives feeling overwhelmed.
The day after Hutchison Telecom's press conference, Motorola began receiving cancellation notices.
A small number of cancellations would naturally not have much impact on them.
Moreover, their new product was also in accelerated production. However, due to the high production costs in the United States, their production capacity was not large, only a few thousand units per day.
Therefore, to prevent more people from canceling, they decisively distributed all the machines that had already been produced to various markets to deliver to customers who had placed orders.
However, to Motorola's surprise, as the reputation of the Yun Sheng S4 mobile phone grew better and better, more and more people tried out the device, including many customers who had already ordered Motorola's new product.
Those customers who had tried the Yun Sheng S4 mobile phone, how could they still be interested in Motorola's MicroTAC new product?
In addition, the prices of the two products were not much different, only a difference of two hundred US dollars.
As a result, more and more people chose to cancel their orders and instead place orders for the Yun Sheng S4 mobile phone at Oracle brand experience stores.
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Every day, Motorola was receiving a large number of cancellations.
Even if the goods were available and ready for delivery, those people chose to refuse delivery in order to get their deposit back.
If Motorola refused to refund, they would directly call the police. In their country, deposits are refundable.
At Motorola's headquarters, President Robert Galvin looked worried.
In his hand was a report on the number of cancellations in the last ten days.
July 2nd, 978 cancellations;
July 3rd, 2863 cancellations;
July 4th, 5231 cancellations;
July 5th, 3666 cancellations;
July 6th, 4789 cancellations;
July 7th, 6973 cancellations;
July 8th, 2366 cancellations;
… …
In just 10 days, Motorola's new MicroTAC phone had 53,721 cancellations!
If it weren't for Motorola's many loyal fans, the consequences would have been unimaginable.
They produced so many machines, but they might not be able to sell them all.
Thankfully, those loyal fans chose not to cancel their orders to support Motorola; otherwise, their losses would have been even greater.
Faced with this situation, President Robert Galvin had already held several high-level meetings to discuss countermeasures.
But it was still useless.
They had invested over one hundred million US dollars to develop the Motorola MicroTAC product.
But now, not to mention making money, it was difficult to even recoup their investment, and there was basically no chance.
Faced with this situation, their production line had already stopped production.
The current problem is how to deal with these canceled products.
After all, they produced according to the order volume.
"Secretary, arrange a high-level meeting for me. The meeting will be held in one hour," Robert Galvin made a phone call.
"Okay, Mr. President!" The female secretary responded immediately.
An hour later, in Motorola's conference room, Robert Galvin faced more than twenty senior members.
The purpose of his meeting this time was not to discuss how to deal with the challenge from Hutchison Telecom, but to discuss how to deal with these canceled products.
Because, since the Yun Sheng S4 mobile phone was released, their Motorola MicroTAC product no longer had any new orders. Because of the similar price to the Yun Sheng S4 mobile phone, even loyal fans who had not yet placed an order would not continue to place an order, as it was simply not worthwhile.
Unless Motorola reduces the price, such as reducing it to just over two thousand US dollars, in which case the Motorola MicroTAC product would be worth buying.
"Everyone, we currently have more than 40,000 Motorola MicroTAC products in stock. What do you think we should do with these inventories?" Robert Galvin raised his question at the meeting.
"Mr. President, why don't we reduce the price and sell them off? First, reduce the price by $200 per unit and see how the sales go. If the sales are good, considering only the manufacturing cost, we can still earn nearly $500 in profit per unit; if the sales are not good, let's continue to reduce the price, another $100, which is $2299 per unit, so that we still have about $400 in profit!" A senior executive suggested.
"I don't agree with this method. Although we have lost more than 50,000 orders, we still have more than 40,000 loyal fans who chose to buy our products. If we reduce the price now, it is equivalent to slapping these fans in the face. In the future, who will dare to buy our products when we release new products?" Another senior executive retorted without hesitation.
"Mr. Henry is right, we can't easily reduce the price, otherwise our reputation accumulated over many years will be gone!" A senior executive agreed.
"Since we can't reduce the price, there must be a way to deal with these tens of thousands of inventories, right? We have already spent more than 100 million US dollars on developing this product. If these inventories cannot be sold, then we will lose at least 200 million US dollars. If the news gets out, we should prepare to step down!" Someone unceremoniously hit back.
Looking at the chaotic noise of the senior executives, Robert Galvin was very helpless.
Faced with such a situation, he was also very annoyed.
However, as the company president, he couldn't show his annoyance.
If this situation is not handled properly, then he will definitely have to step down. Investors and shareholders will not let them get away with it.
"Mr. President and fellow colleagues, I have a proposal that can ensure that the products are sold and maintain our reputation, although it will inevitably bring some economic losses, it is still a good solution," a senior executive stood up and said.
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