Video Editor

Chapter 2656 Brutal

Just as the media and the public were completely engrossed in the controversy surrounding Huayu Film & Television's Qing Dynasty drama and the documentary "The Other Shore," Suning quietly laid out another card in an inconspicuous gray building next to its Shunyi factory.

The building has a sign that reads "The Seventh Research Institute of Tianchao Group," and the researchers inside are all AI robots.

Even the guards sitting in the security booth aren't ordinary security guards, but AI robots.

Inside the building, hundreds of AI engineers transferred from the space world have been working continuously for several months.

Their workbench was lined with circuit boards, screen modules and battery samples of various sizes, the walls were covered with product design sketches and engineering schedules, and countless scrapped test machines were piled up in the corner.

Some tests involved dropping the screen after it was shattered, others involved immersing the device in water for waterproofing, and still others involved repeatedly plugging and unplugging the charging port for durability.

Suning gave the team a clear instruction: develop a mobile phone that belongs to China, with technical standards set in one step, directly benchmarking against or even surpassing all similar products currently on the market.

By the year 2000, the mobile phone market was dominated by Nokia and Motorola.

Nokia's candybar phones were sturdy, durable, and had long battery life, while Motorola's flip phones were stylish and lightweight. Together, the two companies accounted for more than half of the global market share.

Although a few domestic mobile phone brands have emerged, they are mostly OEM products.

It means taking someone else's phone, changing the casing, and printing their own logo on it; or it's a low-end phone.

It's cheap but of terrible quality, breaking down after only six months, and its core competitiveness is practically zero.

That day, Mr. Xu, the project's chief manager, walked into Suning's office with a motherboard sample that had just completed testing.

Mr. Xu is an AI engineer who was brought in from the space world. His professional skills are beyond question, but AI also has its own characteristics.

That means doing things meticulously and never saying "almost" when reporting on work, only saying "meets the standard" or "does not meet the standard".

"Mr. Su, the motherboard design is finalized." Mr. Xu placed the motherboard sample on Suning's table. "All performance tests have passed. It has 40% higher integration and 25% lower power consumption than the motherboard of Nokia's flagship phones of the same period."

Suning picked up the motherboard and examined it carefully. "Where's the operating system?"

"The first version of the UI has been adapted," said Mr. Xu. "The boot speed is three seconds faster than Nokia, the contact search speed is twice as fast as Motorola, and the text message input latency is lower than any feature phone on the market. The built-in games Tetris and Snake have a stable frame rate of 60 frames per second, while the same games on Nokia only run at 30 frames per second."

"Has a drop test been conducted?"

"It's done." Mr. Xu took out a small notebook from his pocket, turned to the record page, and said, "At a height of 1.5 meters, after ten drops from each of the six angles, the screen remained 100% intact. At a height of 1.8 meters, the screen remained 97% intact. There is a risk of screen cracking only at heights above two meters. This data is twice that of Nokia."

Suning put down the motherboard. "Is it waterproof?"

"IPX4 splash resistance means it's perfectly fine for everyday use. We tested the device under various conditions, including answering a call in the rain, spilling water on the phone, and operating it with wet hands, and it passed all tests. However, water damage is not covered under warranty, which will be clearly stated in the instruction manual."

Suning nodded and then asked, "How do you determine your after-sales policy?"

Mr. Xu closed his notebook. "Mr. Su, we've developed three after-sales service plans based on your previous suggestions, but we haven't finalized them yet. Should we follow industry practice, or go our own way?"

Suning leaned back in his chair and thought for a moment, "What are the industry practices?"

"Three-month warranty, repair only, no replacement, replacement will incur depreciation fee."

"What about our solution?"

Mr. Xu hesitated for a moment, then said, “Option 1: one-year warranty, replacement for faulty units. Option 2: three-month return and exchange policy, old units can be replaced at a discounted price within two years. Option 3: three-month return and exchange policy, old units can be replaced at half price within two years. Option 3 has the highest cost. The finance department has calculated that if Option 3 is implemented, the after-sales cost will be six to eight times higher than the industry average.”

Suning responded almost without hesitation, "Option Three."

Mr. Xu was taken aback for a moment. “Mr. Su, the after-sales costs of Option 3 are indeed too high. The finance department recommends Option 2, which offers a more reasonable discount of 30%.”

“It doesn’t have to be reasonable,” Suning said. “What I want is for users to have no worries after buying it. They can get their phones back after almost two years and get half the price back, plus a few hundred yuan to upgrade to a new model. Just think how many people they’ll tell about it after they upgrade.”

Mr. Xu thought for a moment and said, "I understand. So what about pricing? After factoring in our hardware and R&D costs, if we adopt the third after-sales service plan, the price cannot be lower than 2,500 to have a profit margin."

Su Ning shook his head. "One thousand nine hundred and ninety-nine."

Mr. Xu paused for a moment, then said, “Mr. Su, at this price, Nokia’s flagship phones in the same category sell for over four thousand, while we’re selling them for one thousand nine hundred and ninety-nine. Add to that the after-sales policy of Option Three, and we’ll definitely be losing money in the early stages.”

How much did you lose in the early stages?

Mr. Xu flipped through his notebook and did some calculations. He looked up and said, "We lose about two or three hundred yuan for every unit we sell."

Suning said, "Losses are losses, but what I want is market share, not early profits. Nokia and Motorola have dominated the market for so many years, and users are used to their pricing system. If we want to enter the market, simply saying the product is good isn't enough; you have to get users willing to try it at the lowest possible cost. At 1,999 yuan, they're willing to try it. If they find it good, they'll buy a Chinese phone again next time they upgrade. If the screen breaks, they can take it to the store and get a replacement without hesitation. After they go back, everyone in their workplace will know that Chinese mobile phones have excellent after-sales service. Have you calculated how much that advertising will cost?"

Mr. Xu closed the notebook. "I understand. Then let's go with Plan Three, 1,999."

"What about sales channels?" Suning asked.

Mr. Xu said, "The industry practice is to distribute through national, provincial, and municipal distributors, layer by layer. We can also negotiate with carrier channels. Nokia and Motorola both have exclusive agreements with China Mobile and China Unicom."

Suning waved its hand, "We don't use agents or go through telecom operators. Tianchao Electronics will open its own directly operated flagship stores, with unified storefronts, unified pricing, and unified after-sales service standards nationwide."

Mr. Xu frowned and said, "If we operate directly, the speed of opening stores will be much slower, and the initial investment will also be much larger."

“Slow is slow,” Suning said. “The advantage of the agency model is fast distribution, but the disadvantage is that prices are uncontrollable. Provincial agents add a layer of price, city agents add another layer, and by the time it reaches the consumer, the price has already increased. Moreover, after-sales service will definitely be compromised… If a phone sold by an agent has a problem, he pushes it to a repair shop, the repair shop pushes it to the manufacturer, and the manufacturer pushes it to the agent. The user takes a broken phone back and forth between the three parties, and finally pushes it to me. I will not allow this to happen. From day one, Tianchao Electronics has only recognized one place for after-sales service—the Tianchao Electronics official direct-sale store. There are no middlemen, no room for shirking responsibility. If you buy a phone in Beijing, you can take it to a Tianchao direct-sale store in Guangzhou and get it replaced as new.”

Mr. Xu jotted down a few notes in his notebook and then said, "I'll arrange it right away. The design plan for the storefront is already in place: a dark blue background with silver lettering, consistent with the visual identity of Tianchao Auto and Tianchao Internet Cafe."

"Okay," Suning said. "How many stores will be opened in the first batch?"

"We've established flagship stores in six cities: Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, and Wuliangye. We plan to expand to second-tier cities based on sales performance."

"That's enough." Suning stood up. "When can we go public?"

"The production line is already being debugged, and the first batch of 100,000 units has been prepared. It is expected to be officially launched next month."

"Okay, I'll go to the Beijing flagship store myself to take a look then."

……

Soon, Tianchao Electronics was officially registered and established.

When Mr. Xu brought the business license back, he said to the finance staff, "The people from the business registration office asked me if I had added an extra zero. I said no, this is the correct number. They looked at me for a long time, then looked at the form, and finally stamped it."

The finance officer said, "Let alone the business registration number, even I get shaken when I see it."

"Tianchao Group never engages in small-scale operations! When they make a move, they become the industry leader."

Soon after, the company officially released its first mobile phone product, Tianchao No.1.

The press conference was a grand affair, with hundreds of media outlets invited to cover it.

Mr. Xu stood on the stage wearing a custom-made Zhongshan suit, with product images displayed on the large screen behind him.

"The Tianchao No. 1 features a unibody, button-operated candybar design with an aerospace-grade aluminum alloy casing." Mr. Xu pressed a button on the demo unit in his hand, producing a click. "The screen is currently the world's best TFT color LCD, with a resolution 30% higher than all mainstream models of the same period. Boot-up speed..."

He pressed the power button, and a stopwatch on the large screen started counting down. A few seconds later, the main interface lit up. "Three seconds faster than Nokia's flagship phone. Contacts search..."

Next, he demonstrated, "Enter the first letter of the surname, and the result appears in a fraction of a second, no need to scroll for ages. Built-in game smoothness..."

I opened Tetris again, my fingers flew across the buttons, and the blocks on the screen spun and fell rapidly without any lag. "Stable 60 frames per second."

"..." The reporters in the audience began to whisper among themselves.

Mr. Xu put his phone back on the table, and the large screen switched to the after-sales policy page. "After-sales policy: Any quality problems within three months will be refunded or replaced. Not repaired, but replaced with a new one."

A low gasp of surprise rippled through the audience.

Mr. Xu continued turning the page: "Within two years from the date of purchase, the old phone can be directly deducted from half of the purchase price for a new one. That means if you've used your phone for almost two years, as long as it hasn't been smashed to pieces or been disassembled and repaired without your consent, you can bring it back and have half of the price deducted, plus a few hundred yuan to get a new model."

One reporter couldn't help but raise his hand and ask, "Excuse me, does this after-sales policy apply to all models?"

"This applies to all mobile phone products under Tianchao Electronics," said General Manager Xu.

Another reporter asked, "What if someone deliberately breaks their phone to get a new one when the three-month period is almost up?"

Mr. Xu answered decisively: "As long as it's not obviously malicious damage, we'll accept it. We're willing to trust our users. If a very small number of people take advantage of loopholes, we'll bear that cost."

The big screen flipped to the last page—prices.

When that number was printed, the entire conference room fell silent for a full three seconds.

"Tianchao No. 1, nationwide unified retail price, 1,999 yuan."

The reporters below were in an uproar.

A veteran journalist who had covered technology for over a decade immediately stood up and exclaimed, "This configuration costs 1,999? Nokia's equivalent machine sells for over 4,000. Are you serious about this price?"

Mr. Xu said very confidently, "Seriously."

"Then where do your profits come from?"

Mr. Xu smiled and said, "Profits come from scale. We believe that as we sell more, costs will naturally be reduced. Moreover, Tianchao Electronics strives for 100% domestically produced components, which is also the fundamental reason why we can keep costs to a minimum."

"So, Tianchao Electronics already has a complete mobile phone parts supply chain?" "Yes! There may still be some deficiencies in production capacity! But we plan to find domestic parts manufacturers in the future."

……

After the press conference, the headlines of major media outlets changed that very evening.

Tianchao Group enters the mobile phone market, pricing at 1999 yuan, with unprecedented after-sales policy.

Are Nokia and Motorola panicking? China's No. 1 is coming!

Domestic mobile phones are finally no longer just OEM products.

The headlines are getting more and more sensational.

A tech media outlet disassembled and compared the Tianchao No.1 with Nokia's similarly priced models, and had to conclude the review with the sentence: "If this isn't a comeback for domestic mobile phones, then I really don't know what a comeback is."

On the opening day of the Beijing flagship store, long queues formed outside.

The store manager is a young man in his early thirties who previously worked as a regional sales representative at Tianchao Auto. He was recruited by General Manager Xu to be in charge of mobile phone retail.

When the store manager arrived at the store at seven o'clock in the morning, he saw that the line had already stretched to the corner of the street. He was stunned for a while before taking out his keys to open the door.

Security guards set up barriers at the entrance, and the store manager shouted through a megaphone: "Please don't push, come in in batches of fifty. Those who come out from inside can come in from outside. Everyone can buy something, don't rush."

The people at the very front of the line had arrived in the early hours of the morning.

A young man wearing glasses was holding a laptop in his arms, and it looked like he was working overtime while waiting in line.

The store manager couldn't help but ask him with a look of curiosity, "What time did you arrive?"

The bespectacled man said, "I arrived at 11 p.m. last night and have been squatting here all night."

The store manager said, "You can't be serious! It's not a limited edition; this is just Tianchao Electronics' first mobile phone."

The bespectacled man said, "My girlfriend bought a Nokia last month for over four thousand yuan. After less than a month, a bright line appeared on the screen. When she took it to the repair shop, they said it wasn't covered under warranty and she'd have to pay 800 yuan to replace the screen herself. I was furious. Her phone is still being repaired. I'm just waiting for your Tianchao No. 1 to be launched. I saw the press conference about this after-sales policy and told my girlfriend right then and there: From now on, I'll only buy phones from Tianchao."

Another person in the group chimed in, "Me too. I drive a Chinese-made White Tiger SUV, and it's been running for two years without a single problem. It makes me feel really proud to take my friends out on holidays. I'd buy any phone made in China, even with my eyes closed."

A middle-aged man standing nearby said, "I've never driven a Tianchao car, but my son plays games at Tianchao Internet Cafe and says the computers there are better configured than the ones he built himself. I trust the Tianchao brand."

As the people in line chatted, they discovered that many of them were users of other products from the Tianchao Group.

People who drive cars registered in China, surf the internet at internet cafes in China, live in houses owned by Mingju Real Estate, and chat on Tencent QQ...

They entered Tianchao's ecosystem from different entrances, and now they have gathered at the entrance of Tianchao Electronics' flagship store.

Looking at this scene, the store manager recalled a sentence that General Manager Xu had said during training: "Tianchao Electronics doesn't need to advertise; the users of other sectors of Tianchao Group are our advertisement."

……

As soon as the shop door opened, the first group of fifty people rushed in.

The sales assistants in the store were trained by Tianchao Electronics itself, and they wore uniform dark blue uniforms with the Tianchao Electronics logo embroidered on their chests.

Unlike other mobile phone store sales associates who chase after customers to sell their products, they stand next to the display stand and let customers ask questions if they have any, or let them try out the demo unit themselves if they don't.

The bespectacled man picked up a demo unit, pressed some keys on the keyboard, and felt its weight.

I opened my contacts search, typed in a few random letters, and the results appeared instantly.

I played Tetris for a while, and the graphics were incredibly smooth.

After putting the demo unit down, I said to the sales assistant next to me, "Give me one."

The sales assistant asked, "Sir, which color would you like to choose?"

"Black, understated."

"Okay! Please wait a moment."

The sales assistant took a brand new, unopened phone from under the counter, unpacked it in front of the customer, inserted the customer's SIM card, and activated it.

The whole process took less than ten minutes.

The bespectacled man took the phone and said, "That's it?"

The sales assistant said, "That's it. If there are any problems, bring it back within three months and we'll replace it with a new one. Within two years, you can get half the price of your old phone and trade it in for a new one. Just bring this phone; you don't need to bring the box or the invoice, just the phone itself. But you absolutely must not damage it, do not perform any unofficial repairs, and absolutely do not disassemble it."

"why?"

"Because our parts are all standardized, they cannot be easily damaged, let alone replaced with unofficial parts. Most importantly, Tianchao Electronics uses only exclusive technologies, which forms a natural technological protective barrier."

"Then why don't you apply for a patent?"

"The so-called patent application is just a last resort. Applying for a patent is essentially disclosing your technology."

"I...I don't quite understand?"

"These are the operating rules of patent law. You can study them when you get back, sir."

"..." After listening, the bespectacled man looked down at the Tianchao No. 1 in his hand, then at the Nokia displayed in the next cabinet, and muttered to himself, "Nokia, I'm sorry, I won't buy you anymore."

……

Less than a week after the opening of Tianchao Electronics' Beijing store, General Manager Xu walked into Suning's office with a sales report in hand, his expression a mixture of excitement and anxiety. "General Manager Su, the first batch of 100,000 units has been completely sold out."

Suning was looking at the documents when he looked up and asked, "All of them?"

"All of them. All the flagship stores in the six cities are sold out. The fastest-selling store in Shenzhen ran out of stock in just three days. The second batch of goods is already being prepared on the production line in Shunyi. The logistics trucks are parked directly at the back gate of the factory to load the goods and then ship them out. However, the replenishment speed cannot keep up with the sales speed. There are still queues in front of each store. Some people who got to the front of the line were told that there was no stock and they were very agitated. The store manager almost called the police."

Suning put down the documents. "What about the secondhand market?"

Mr. Xu said, "Scalpers have inflated the price by several hundred yuan, and people are still selling at a higher price. We have already added a notice about the unified retail price to the packaging boxes... 'This product has a unified national retail price. Please do not purchase it from unofficial channels at a higher price.'"

When will production capacity catch up?

"The production line is already being expanded, and a new line has been opened in Pudong. We expect daily production capacity to double next month."

“Okay,” Suning said. “Tell the store managers that when there is no stock, give numbers to the customers in line, and let them buy first when the goods arrive. Don’t let people wait in line for nothing.”

"Understood." Mr. Xu wrote it down in his notebook.

A spontaneous word-of-mouth campaign quickly spread among Tianchao No.1's user base.

Someone posted a photo in a QQ group showing a crack in the screen of their Tianchao No. 1 phone: "Yesterday, while I was riding my bicycle, my phone slipped out of my pocket and fell onto the concrete. I thought it was ruined, so I took it to the store to ask how much it would cost to repair. But without saying a word, they checked my purchase history and replaced it with a new one in less than ten minutes. I was standing in front of the counter and before I could even react, the new phone was already in my hands. I'm truly impressed by Tianchao Electronics' after-sales service."

Someone replied below: "Aren't you just causing trouble for others? You broke it yourself and now you want them to replace it."

The original poster immediately replied: "I already said I dropped it myself, and they said it's okay, they'll replace it within three months. That one word... replace. If you buy another brand of phone, who would dare give you that kind of treatment?"

Someone posted on a forum saying that after two months of use, the battery life is still as durable as when they first bought it, and it can last for a full three days on standby: "I used to use a Nokia, which had to be charged after two days of standby, and it was said to be the king of battery life. I've been using the Tianchao No. 1 for a while now. I charged it on Sunday, and it's Thursday with only one bar left. I made several calls and sent many text messages in between. Did aliens make this battery?"

In the comments section, someone asked if the poster didn't use their phone much. The poster then posted a screenshot of their call log, showing that they had made over a dozen calls and sent over thirty text messages in two days. The comments section immediately went silent.

Someone disassembled the Tianchao No.1 and a similarly priced Nokia phone for comparison, and posted the photos online.

The Tianchao No.1 circuit board has a more regular layout, uses more robust components, and has fuller solder joints.

The person who posted the message is an electronics engineer. In the post, he wrote: "I've been doing R&D on electronic products for over ten years, and when I took apart the Tianchao No. 1, I was speechless. The workmanship here is beyond what small workshops can produce, and it's incomparable to OEM products. The fullness of every solder joint is uniform, every trace is the optimal path, and even the battery compartment clips are beveled to prevent them from cutting your hands. These details aren't something you can achieve just by having a lot of money; it requires the entire supply chain and quality control system to be in place. Tianchao Group started in manufacturing, and this foundation is indeed unmatched by ordinary mobile phone manufacturers."

A row of people left comments in the comment section saying that this is a comeback for domestically produced phones.

A motorcyclist posted a message in a motorcyclist group that was screenshotted and went viral: "Brothers, I recommend the Tianchao No.1. The day before yesterday, I was riding my bike to Yanqing when my phone was shaken off the bike and fell several meters away, rolling several times on the ground. When I picked it up, the back cover was scratched, but the screen was fine. It can still make calls and send text messages, everything is normal. Just for its drop resistance, I would give it full marks."

Someone asked in the comments, "Is it true?"

A motorcyclist replied: "Tianchao Group, without a doubt!"

This kind of reputation isn't built through advertising; it's earned by users spending real money after using the product.

Every user who has upgraded to a new device is more persuasive than any advertising spokesperson.

However, the Tianchao Group has invested a massive amount of resources in this project, the scale of which is far beyond the imagination of ordinary people.

After all, Suning has always been a perfectionist and would never allow any defects in its products.

In retrospect, the massive initial investment was worthwhile, and Tianchao Electronics quickly rose to prominence in 2001.

At this moment, the foreign mobile phone giants were all dumbfounded, unable to understand how the Chinese conglomerate could be so ruthless.

...(End of this chapter)