Chapter 586: A Divided Market, Gaoke Claims One-Third
He Wei was sitting in the same car as Qiu Aihua. Just moments ago, when Qiu Aihua asked for Su Yuanshan's phone number, for reasons she couldn't quite explain even to herself, she lied—saying she only had the number to his office.
Since joining Yuanxin, she had never dared to say that she had been "lifted out of nowhere" by President Su and Secretary Zhou—though her meteoric rise naturally drew envy and speculation, no one ever truly questioned her capability.
Because she really was capable.
From the booming domestic mobile phone market to the declining pager and DVD sectors, He Wei had spent the past two years in charge of marketing strategy for both Yuanxin and Huayuan Trading.
She was the one who proposed a "market penetration" strategy to both companies' marketing departments—ensuring strongholds in major cities while also pushing into secondary and lower-tier markets in step with the country's economic development, ultimately building a national distribution network.
That proposal had been faithfully carried out ever since.
Later, she was personally reassigned by Su Yuanshan to the CPU department as a "firefighter" to fix its marketing. Three months later, she submitted a flawless answer.
Now, because Su Yuanshan had simply said that Chengdian Gaoke would be a key supported enterprise for Yuanxin and Meijie—critical to their strategy in the desktop PC sector—He Wei had packed her bags and come straight over.
...
"Director He, why do you look even more nervous than I am?" Qiu Aihua chuckled after ending a phone call, noticing how tense He Wei looked.
Currently, Chengdian Gaoke's primary investors were three: Yuanxin, Zhongxin, and Dianke—all of which had deep ties to Su Yuanshan. Qiu Aihua, of course, understood how important someone like He Wei was as marketing director.
After working with her, he discovered they shared the same frontline sales background and had strikingly similar philosophies on market promotion.
So once their teams began to collaborate, He Wei not only successfully coordinated Chengdian Gaoke's operations with both Yuanxin's CPU division and Meijie's supply chain, but their joint marketing strategies also produced more than double the expected results.
Just last month, during a campaign, Chengdian Gaoke's exclusive stores hit their highest sales numbers ever—one month's sales equaled a whole quarter from the previous year.
And that was November, typically the slowest month in the PC market.
With President Su visiting the Special Zone, Qiu Aihua naturally wanted He Wei by his side—to express gratitude and also to "report" progress.
After all, Su Yuanshan had discovered and endorsed him.
"It's always a little nerve-wracking to meet President Su," He Wei admitted, smiling softly. She checked her appearance in the car window one last time, then got out alongside Qiu Aihua and walked toward Zhongxin Internet's main entrance.
Even though Su Yuanshan had told them to wait downstairs, how could a subordinate wait for the boss to come down?
...
Special Zone Grand Hotel.
Four people sat around a large round table in a private dining room. As dish after dish arrived, Su Yuanshan shook his head and laughed. "Old Qiu, this is overkill."
"Hehe, not at all," Qiu Aihua waved his hands and hesitated. "Should we invite Director Fu and the others?"
Su Yuanshan waved the idea off immediately. "No need. Let's skip the formalities."
—Ever since the HK kidnapping incident, Fu Zhenhua's security team had become his literal shadow. Wherever he went, they followed—no exceptions.
Su Yuanshan had given up trying to stop them. Luckily, he preferred staying in his office anyway, which made their job easier.
The last dish was just placed on the table when Zhang Xiaolong smiled and asked, "Old Qiu, are you a Hakka?"
"Yes, I am."
"No wonder. They say Hakka people are known for hospitality. I can see it now."
"Haha, even if I weren't, I wouldn't dare skimp on hosting the likes of you... President Su, Director Zhang, Director He—please!" Qiu Aihua lifted his beer and downed it in one go.
It was just beer, and everyone was limited to one bottle.
He Wei lifted her coconut milk and clinked glasses symbolically.
After the first round, Qiu Aihua got talking—of course, starting with his gratitude for Yuanxin and Director He. Su Yuanshan was finally getting a taste of what "real" Chinese entrepreneurs were like.
Maybe only companies like Yuanxin, which relied on tech rather than banquets, could afford to skip this kind of thing.
"Old Qiu, what's your goal for next year?" Su Yuanshan asked after putting down his glass.
Qiu Aihua looked at He Wei before answering cautiously, "If we keep growing like this, we could become the top domestic PC brand next year."
"This year isn't over, but based on our research into the first three quarters of China's PC market, we estimate total domestic PC sales will reach around 900,000 units."
"Of that, foreign brands account for nearly 40%—led by Dell, IBM, and Compaq. Domestic brands are just over 30%, including Fantasy, Founder, Inspur, Great Wall, us, and a few smaller players. The remaining 30% goes to the DIY-compatible market."
"Based on this, our current market share is about 6%, just behind Fantasy and Great Wall."
Hearing Qiu Aihua recite those numbers so casually, Zhang Xiaolong blinked and glanced at Su Yuanshan, clearly unimpressed by the mere 6% share.
But Su Yuanshan nodded repeatedly. "Not bad—quite strong already."
That made Qiu Aihua exhale quietly.
Although he'd been with Chengdian Gaoke for a year and had top-level support, the company had been a mess before. Without his connections, it would've collapsed long ago.
And since taking over, he'd spent immense time and cost on building a national retail presence, training staff, renovating stores—not to mention smoothing over internal faction struggles.
Su Yuanshan saw Zhang Xiaolong's confusion and smiled. "Last year, Chengdian Gaoke had less than 4% market share. Hitting 6% this year means the exclusive store strategy works."
"It's just a little expensive," Qiu Aihua laughed. "We're lucky to have support from major shareholders like Yuanxin and Zhongxin. Otherwise, we wouldn't even have a service network."
"As it should be," Su Yuanshan nodded. After a moment's thought, he said, "I believe you can hit No. 1 next year. But if your goal is just to be the top domestic brand, or even No. 1 among branded PCs, that's still just 10% of the market."
"Then what do you suggest, President Su?"
"I want you to aim for dominance—be one of the three kings in a split market."
"Cough... cough..." Qiu Aihua choked on his drink.
"What, no confidence?" Su Yuanshan teased.
"No, it's just... you want one-third market share next year... that's..."
"Eh..." Su Yuanshan realized he'd been misunderstood and laughed. "Not next year—though that would be great if it happens."
"..."
"Actually, President Qiu, if policy aligns, one-third next year might not be impossible," He Wei said suddenly.
All eyes turned to her.
"Go on," Su Yuanshan encouraged, visibly pleased.
He Wei nodded, glanced at the door, then continued.
"Don't worry, Director He. It's safe here," Qiu Aihua said with keen eyes.
"In the past two months, our team and President Qiu's split up to survey China's PC consumer base. Honestly, the exclusive store model is excellent for branding—it's even inspired some new ideas for Yuanxin, though I'll save those for another time."
"Back to PCs—our data shows that most branded PCs are bought by institutions: businesses, schools, government agencies. Within these sectors, many users still see computers as high-end tools they don't understand or dare to use. So service and stability are key."
"In private enterprises, cost becomes more critical. For example, Fantasy recently launched the Gemini series focused on low-cost."
"So, what if we developed different models tailored to different customer needs? Not just hardware specs, but complete packages including price, service, and even design."
"We could even develop custom software—typing tutors, beginner guides, simple games, handy tools..."
He Wei clearly came prepared. After a short pause, she continued: "Yuanxin uses a concept called precision targeting—matching brands and prices to specific consumer segments. I think it's fully applicable to PCs too."
Su Yuanshan suddenly exclaimed, "Commercial PCs."
He Wei blinked, then nodded. "Yes—launch a new concept: the commercial PC! With a dedicated brand, distinct appearance, specs, and price."
(Note: This is exactly the path Lenovo would follow years later...)
Qiu Aihua nodded repeatedly, thinking fast. After a while, he clenched his fist. "Brilliant, Director He!"
Zhang Xiaolong chuckled, "Our Director He is always brilliant."
"Ahem..." He Wei coughed but ignored the teasing. "President Qiu, you keep saying Fantasy has the Chinese Academy of Sciences behind them. But the Academy is a research body—it doesn't issue administrative orders. If Fantasy really wants to use political clout to strong-arm agencies, do you think Yuanxin will just roll over?"
"Right, President Su?"
"Uh..." Su Yuanshan hadn't expected her to throw him under the bus, but he saw she was trying to boost Qiu Aihua's confidence.
"Let's put it this way," he said, "the state wants to see domestic brands rise through market forces. Yuanxin, for example, has received virtually no administrative intervention."
"Because only companies that survive real competition have the strength and courage to expand globally."
Then Su Yuanshan chuckled and quoted a famous line. "Our great teacher once said, 'You overestimate them. Do they even understand capitalism? Capitalism accumulates wealth through invading and plundering other nations. Who can they invade? They can only exploit their own people or sell off their country's resources to feed their greed.'"
"So yes, the state wants us to be globally competitive."
He Wei smiled radiantly and nodded. "Exactly. That's why, Mr. Qiu—when all other conditions are equal, the real breakthrough still lies in product and marketing."
Qiu Aihua nodded like a woodpecker, his eyes shining. "Director He, why don't you take over as our CEO? I'll be your assistant!"
"Ahem!" Su Yuanshan suddenly coughed. "Dream on!"
...
After lunch, upon learning Su Yuanshan was scheduled to meet with Jobs later, Qiu Aihua quickly excused himself—saying his head was buzzing with ideas and he didn't want to waste a minute.
He Wei stayed behind and gave a brief report in Su Yuanshan's office.
Though honestly, she'd already said most of what needed saying at the hotel.
The rest… well, she was there for praise.
"He Wei, excellent work," Su Yuanshan said sincerely. "Tell me, how did you come up with all that?"
"Just listening to users and thinking like one," she said, still a little shy even with no one else around. Sitting straight, hands folded, she smiled demurely. "Our team often runs sales simulations and asks what would move customers most. Many of our colleagues at Yuanxin are our guinea pigs."
"Haha! No wonder Old Duan can't stop praising you," Su Yuanshan laughed warmly.
They chatted casually until 2:30 p.m., when He Wei finally took her leave.
Half an hour later, Jobs arrived at the Internet Center on time.
Su Yuanshan placed an unreleased Meijie laptop on the coffee table, turned on the power, booted the emulator, then stepped out to welcome him.
—This time, Jobs was on Su Yuanshan's home turf.
Now it was his turn to persuade Jobs to join the YOS ecosystem.
At the very least, get Apple's PDA on board.
Just imagine... how exciting.
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Chapter 587: President Su Urges Jobs to Take Revenge
When it comes to Apple's PDA, many fans in later years liked to draw a connection between it and the iPad, claiming this proved the iPad had a long and noble lineage.
In truth, while the concept of tablet computing did evolve from PDAs, the iPad had absolutely nothing to do with Apple's original PDA—the Apple Newton (also known as MessagePad).
In fact, at this very moment, the Newton PDA was a product that Jobs couldn't even stand to look at.
And to explain that, we must mention another infamous name: John Sculley—the previous CEO of Apple. A marketing genius who had led PepsiCo's full-scale challenge against Coca-Cola.
Perhaps it was a case of "great minds recognizing one another," or perhaps Jobs truly believed that Apple lacked only a marketing genius to sell its products. Whatever the reason, in 1983, Jobs approached Sculley, who was then President of PepsiCo, and delivered that now legendary line:
—"Do you want to sell sugar water for the rest of your life, or come with me and change the world?"
Sculley joined Apple.
During their initial honeymoon phase, Apple experienced a brilliant era—they launched the first Macintosh computer, and with it, the iconic "1984" commercial. The product was hailed as revolutionary, the ad as the greatest ever made.
But dreams don't last forever. Soon, the two clashed—ideals vs. reality. The flashpoint came during pricing discussions for the Mac. Jobs wanted it affordable; Sculley insisted on preserving high margins. Ultimately, the board sided with profits over idealism.
When the conflict reached a breaking point, Jobs regretted bringing in someone who reeked of "money over meaning." He plotted to oust Sculley, planning to replace him with the head of European operations.
But that executive betrayed him, leaking the plan to Sculley—who in turn brought the issue to the board and forced a showdown.
Everyone knows the result: profit triumphed, and idealism was banished.
Sculley, though he replicated his PepsiCo playbook and grew Apple's performance tenfold, did so by squeezing every last bit of vitality from its product line—a "demonic overdrive" strategy, so to speak.
With the rise of the Wintel alliance, the backlash eventually came. As the market shrank and performance slipped, Sculley held on until 1993, then left Apple in defeat. After a leadership vacuum, the board had little choice but to bring Jobs back.
—After all, Jobs was the founder. And after proving his brilliance again with Pixar, admitting they were wrong didn't seem so shameful.
The Newton PDA had been Sculley's desperate "lifesaving" product in Apple's dying days.
Obviously, it didn't save him.
—So you tell me: how would Jobs feel about a product invented by the man who kicked him out?
In fact, historically, one of Jobs' first acts after returning to Apple was to kill the Newton PDA. It was expensive, overcomplicated, and ultimately unclear about what real problem it solved.
According to the information Su Yuanshan had, due to Jobs' early return and the ripple effects of Yuanxin's rise, Jobs was now hesitating—should he kill the Newton PDA or not?
Su's goal was simple: convince Jobs to re-enter the PDA market—but scrap Newton OS, abandon Sharp as the manufacturer, and instead adopt YOS and partner with Hongyuan.
...
Jobs walked in briskly, carrying himself with his usual charm, offering polite smiles and nods to the programmers before stepping into Su Yuanshan's office.
Perhaps because of his product-manager instincts, Jobs immediately locked eyes on the Meijie notebook on the coffee table. He sat in front of it and looked at Su Yuanshan for permission.
"A new product we're planning to show at CES. Want to give it a review?" Su said casually.
"..." Jobs didn't reply, but he appreciated the gesture of trust. He picked up the notebook and examined it seriously.
The more he looked, the more serious his expression became.
This laptop featured the latest YX04 architecture processor with a 66 MHz bus and a 260 MHz core frequency.
—YX architecture had now split into three paths: SoC for low-power, modular integration for handheld devices; performance-oriented for high-speed, high-frequency PCs and laptops; and a third for customization—supporting niche applications via tailored licensing.
Besides the high-frequency processor, the laptop had a 12.1-inch 256-color TFT display with 800×600 resolution and a 2MB integrated GPU on the motherboard.
It's important to note: while this was Meijie's first officially released consumer laptop, its primary design target was Yuanxin's employees—or people like them.
From the start, no one—including Su Yuanshan—expected it to compete in the mainstream laptop market, still dominated by IBM and Compaq's x86/Windows machines.
This machine wasn't built for Windows users—it was for developers and designers already accustomed to Linux.
Yet, under Su's insistence, the device made no compromises in appearance. It pushed slimness to the extreme.
Its thickest point? Just two centimeters.
In terms of looks—forget architecture or OS—it was genuinely beautiful.
Jobs closed the lid, flipped it over to inspect the bottom, then leaned back slightly, studying it from a distance.
Su Yuanshan smiled the whole time, like a neighbor proudly showing off a toy.
"Very well-designed," Jobs said sincerely after reopening the laptop. "It's beautiful."
"Thanks for the compliment," Su smiled to himself. Of course it's good-looking—it's practically a proto-MacBook with Apple-inspired DNA. How could it not be?
"Is the OS Linux-based?"
"Mm. Linux now supports a broad range of development environments and applications. It's fully capable for everyday professional use."
Jobs nodded, a flicker of emotion crossing his eyes—part regret, part frustration. He'd been gone from Apple for a decade, and in that time, Windows had taken over. Even Linux, the once-underdog open source project, had matured.
"Mr. Jobs, aren't you going to check the running software?" Su Yuanshan asked, noticing that Jobs had barely glanced at the emulator.
"Your new utility suite?"
"It's the system," Su chuckled and sat beside him—only to realize he was a head shorter than Jobs.
Damn!
Using the touchpad, Su launched YOS. After a brief loading screen, the YOS logo appeared, and the system booted.
This time, the UI was that of a PDA.
Jobs gave Su a long look, then turned his attention to the screen.
"This is our OS for handheld devices. In terms of performance... Jobs, it's far beyond Newton OS."
"Faster response, better memory management, lower hardware requirements, cheaper development and maintenance, and superior I/O support. It outperforms both Newton OS and Palm OS."
"I don't know if Apple still believes in the MessagePad, but if it doesn't change... it has no future."
Su was blunt—he didn't fear offense.
Jobs didn't seem upset. If anything, he looked a little relieved.
After a few seconds of silence, he smiled. "Yes, that product was a total failure."
Su nearly rolled his eyes. Of course you'd say that—it was your nemesis's creation.
But he said aloud, "Still, it did provide valuable lessons, right? At the very least, it—and its successors—proved that the PDA market has potential for the next few years."
Jobs didn't say yes or no. Instead, he asked, "Yuanxin plans to enter?"
"No. We'll supply chips and the OS."
Su was honest again.
Jobs gave him another deep look.
Since returning to Apple, he'd done a thorough investigation into Su Yuanshan. The more he learned, the more he had to admit—this guy was formidable.
But not in the same way as himself.
Su was a technological genius, even a great corporate leader. But he showed no signs of being a world-class product manager.
And that, ironically, was why Jobs valued their friendship—because even in Su's shadow, Jobs still considered himself the world's best product visionary.
Soon, Jobs asked, "So you supply the chip, the OS, and the manufacturing… and you want Apple to do the design and re-enter the PDA market?"
"Yes." Su didn't hesitate. "I've always believed Apple is one of the most aesthetically innovative tech companies. A PDA market without Apple is… well, less fun."
"And personally..." Su spread his hands. "Jobs, we're friends, right?"
Jobs paused—he hadn't expected that—but after a brief moment, he nodded with a smile. "Of course."
"I never liked Sculley. I never even visited Apple while you were gone."
"Some say your return is like a Hamlet-style revenge tale. But I see it differently—more like the return of a king. And let's be honest, from a market and public opinion perspective, people want you to prove Sculley was wrong."
Su was about as direct as he could be. He was practically tugging Jobs by the collar: kill the MessagePad, dump the OS and the Sharp partnership, and design a new Apple PDA—with Yuanxin chips and YOS—and show Sculley, the public, and the board who the real product genius was.
A prince's revenge story—who doesn't love that?
Jobs, being who he was, stared at Su for a long while and fell silent.
Eventually, he asked, "Will your new phone also run Ymicor OS?"
"Yes."
"Any hardware prototypes yet?"
"Not yet. But in a month..." Su almost slipped, nearly revealing Sony's upcoming PDA release. "In a month, we'll unveil a demo unit."
"Alright. I'll consider it."
Su leaned forward. "I don't see why you'd develop an entire OS just for a PDA—unless you really want to keep patching Newton OS."
"No, Su. This brings us back to our old disagreement," Jobs said seriously. "You and I have fundamentally different views about operating systems."
"..." Su was speechless.
Why is this man so stubborn?
But not wanting to escalate again—Jobs had mellowed with age—he smiled and said, "Still, your vision for PDAs gave me something to think about. I'll consider it."
Those words finally gave Su Yuanshan a bit of relief.
One step at a time, he told himself.
Start with the PDA, then ease into phones, then tablets—until the mobile world belongs to YOS.
What? Android? Symbian?
Su was watching. And when they raised their heads—he'd be ready to cut them down.
...
After seeing Jobs off, Su Yuanshan stayed in the Special Zone for two more days, meeting with local leaders and inspecting the expanded fab, then headed to Shanghai.
Since he was in the neighborhood, Shanghai was a must.
After all, CPU tech, flash memory, copper interconnects, Lin Benjian's research team—these were all crucial to the future. Su had to stay close to show he cared.
But Rome wasn't built in a day, and breakthroughs wouldn't come overnight. Beyond offering encouragement, there wasn't much else he could do.
Finally, on the day before his departure, Su visited Shanghai's city leaders.
He always kept things light and casual with them—"Just dropping by to chat," he'd say.
"You'd better bring something useful next time," the official said with his legs crossed, mock-complaining. "Otherwise, if people find out I spent two hours just chatting with you, I'll get reported."
"No way, Secretary Chen isn't that kind of person," Su said cheerfully, turning to the secretary with a grin. "Right, Secretary Chen?"
"Ahem..."
"But seriously, sir... this time, I actually came to ask for intel."
Su sat up straight, his eyes sharp.
"Do you think this year's People's Congress will pass the resolution for a Ministry of Information and Industry?"
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Chapter 588: 1997, The Beginning of the Boom
Before heading to the Special Economic Zone, Su Yuanshan had already heard rumors that the final senior leadership meeting of the year would be held this month.
Reportedly... one of the items on the agenda was the establishment of the Ministry of Information Industry.
—As someone directly involved in the related industries, Su Yuanshan desperately wanted this ministry to be formally established tomorrow.
"Aren't you usually well-informed?" the official teased, not giving Su a direct answer. "I haven't received any notice of the meeting, so how would I know?"
"...Sir, don't tease me," Su said with a bitter smile. "If you don't give me a solid word, and I miss out on something good, I'm counting on you to take responsibility."
"You little rascal." The official gave him a stern look, but didn't continue joking. After a few seconds of silence, he finally said, "Director Ye is going to Beijing, I do know that much. And yes, the establishment of the Ministry is on the table for this meeting."
Su Yuanshan let out a long breath of relief.
The official couldn't help but laugh. "Why are you so excited? You know the new appointee?"
"Ha, no matter how well I know them, it can't compare to knowing you." Now that he had confirmation, Su relaxed and smiled. "Still, I really can't guess who it'll be. Maybe you can give me a little hint? Help me prepare?"
"Don't mess around. I really don't know," the official replied, glaring. "And don't go spreading rumors either."
"Just chatting with you here, not going to repeat it elsewhere." Su smiled. "You know, Yuanxin has always relied on technology. Just recently, we've been clashing with Western markets and names like Ericsson, Motorola, Sony, and Xinghai."
The official paused, suddenly remembering Su was a major shareholder of Xinghai. Wasn't that self-inflicted? He chuckled and then recalled something Su had mentioned earlier—"benefits."
"You said something about benefits?"
Su straightened up. "Sir, we care so much about the Ministry of Information Industry because of what it signals—it means the country is about to fully accelerate its push toward informatization."
The official nodded; he clearly understood the Ministry's significance.
"Let's put policy aside. Just from a market perspective, we believe the Ministry will push to eliminate unpopular charges like activation and network access fees. These fees were once important, sure—many countries, including Japan and the U.S., used to charge them. We even modeled ours on theirs."
The official nodded again, signaling Su to continue.
"So gradually reducing and eventually eliminating network access fees is inevitable."
Secretary Chen interjected with a chuckle, "Professor Su, it's not like those fees were meant to last forever."
"Of course not. But right now, they've become stumbling blocks in our path to informatization."
Su sighed.
Honestly, the fact that they were still charging thousands in access fees made Su feel a little sick.
It was simple: in this timeline, Yuanxin existed.
—In the previous life, during the early development of GSM networks, most of the huge costs for base stations and technology were paid to foreign giants.
But in this life, Yuanxin had thrown everything it had into promoting domestic mobile infrastructure. Through competitive pricing and extended payment terms, it had won domestic contracts purely on technical merit—don't forget, China had been building analog base stations for nearly ten years before Yuanxin emerged.
The contrast was stark. And even with vested interests resisting change, nothing could stop Yuanxin's momentum.
Now, China's built-out base station capacity far exceeded the number of network users. If the government didn't drop those network access fees soon, it would stifle the entire mobile communications sector.
Historically, after the Ministry of Information Industry was founded, they followed a three-step plan to support domestic phones.
Step one: Allocate 2 billion yuan from national bonds and access fees to support the domestic mobile phone industry, with annual investments thereafter.
Step two: Gradually reduce and then abolish network access fees.
Step three: Issue the "1999 No. 5 Document" that formally authorized mobile phone manufacturing in China—giving priority to domestic companies for GSM, and for a time, limiting CDMA licenses to domestic firms. Only Motorola, as a "long-time friend," received a license among foreign brands.
Eventually, even joint ventures and wholly foreign-owned mobile manufacturers were denied approval.
Without those three steps, domestic phones would've never risen.
But in this life, everything had changed.
Yuanxin's rise had allowed it to bear the banner of China's mobile industry. Its technical strength and supply chain leverage—alongside Zhongxin's flood of low-cost, multi-brand devices—left foreign competitors struggling.
Without premium pricing power, foreign brands had to slash costs to compete. That meant building local factories to avoid tariffs.
And tariffs were no small thing. Every item on a tariff list was a bargaining chip in WTO negotiations. (Back when China was just entering WTO talks, the average tariff on over 6,000 products was 43%—no wonder smuggling had been rampant.)
This shift pleased the government—it could now argue, "See? We've left it to the market."
Now the only question was whether the government would once again initiate the "three steps."
...
Su gave a concise analysis of the coming changes in China's mobile industry, then tied in trends in the digital electronics space. He emphasized that Shanghai, as the country's most international city, should leverage this advantage to build a global exhibition platform.
With that much said, the official understood.
"You're suggesting we host another expo?"
"Exactly!" Su nodded with a grin. "The world's big electronics expos are already well-established—Las Vegas, Taipei, Berlin. We can't outdo them by copying. We need to focus on something they've overlooked, but with huge growth potential."
"That's why you suggested the semiconductor exhibition, right?" The official ran a hand through his hair with a chuckle. Shanghai had hosted its first semiconductor expo—not a groundbreaking success, but big names from Japan and the West had attended.
"Yes. Same with the software expo in the provincial capital. It's been running four years now, growing every year. Foreign software giants must attend if they want to enter China."
"The software and gaming industries there are doing well," the official nodded, then looked at Su with interest. "So you're proposing... a mobile expo?"
"'Mobile expo' sounds a bit plain. How about the International Mobile Electronics Exhibition?" Su had already thought of a name. (In future China, such expos would become so common that by the time a company finished attending them all, its product would already be outdated.)
"Not bad, not bad!" The official savored the name. "Is there currently an international expo dedicated specifically to mobile products?"
"No. Not one."
The official laughed. "Secretary Chen, make a note. Let's bring this up at the next standing committee."
"Oh, and Su—don't just push me to host an expo. Will Yuanxin have something to showcase?"
Su grinned. "Of course! And the timing... If we can hold it in May, that would be perfect."
The official laughed again. "You're even scheduling it for me?"
"No, no… not like that. It's just that May is when the software expo happens in the provincial capital. If we time things right, we can attract exhibitors who work across both software and electronics—especially international ones—so they can do both without an extra trip."
"And, well, May is also when Yuanxin plans to launch new products. That could help attract a crowd."
With Su putting it like that, the official readily agreed.
"Lastly, sir, a suggestion... It's best to hire a professional international exhibition company to organize and plan the event. Someone like Baisen. Don't worry about the cost—even if it's just tuition money, it's worth it."
Su spoke with such earnestness that the official smiled. He glanced at his watch, stood up, walked over, and patted Su's shoulder with a firm squeeze.
"Alright! I'll listen to you."
"Come on—let's leave early today. I'll treat you to lunch at the canteen."
...
Among those who rang the listing bell were several veterans and shareholders—and a slightly downcast Pony.
Of course, at first, Pony had tried to invite Su to attend the NASDAQ bell-ringing, even enlisting Ye Rudai as an excuse ("He should be there for Christmas..."). But when Su asked Ye what she thought, she simply said, "Ignore him. And don't go—I'm busy."
Still, as a major shareholder, Yuanxin's absence at such a symbolic event would raise suspicions. So Wang Rui, who was already in the U.S. for business, attended on Yuanxin's behalf.
As an executive board member and senior president of Yuanxin, Wang Rui was more than qualified to represent the company.
Unsurprisingly, he was asked by reporters about Yuanxin's views on the listing and their confidence in the stock.
Wang Rui, following Su Yuanshan's instructions, replied directly: Yuanxin was very optimistic about Easybook's future and remained highly confident in the broader internet industry.
...
Meanwhile, back in China, a piece of news went unnoticed by anyone outside the industry.
On Christmas Day 1996, the 31st session of the 8th QGRD Standing Committee concluded.
At that meeting, the resolution to establish the Ministry of Information Industry was passed.
That same day, the State Council also approved the creation of China United Communications Corporation.
Yes—it was only then that China Unicom was officially formed.
...
On the second weekend after New Year's, Chen Jing flew back to Zhongxin in the provincial capital. Zhang Rujin, Jiang Qingchuan, Wang Chaoxin, Wang Chuanfu, and others returned from the Special Economic Zone on a chartered business flight.
According to the calendar, this should've been the fiscal year-end meeting. But this time, the attendees weren't from all departments—it wasn't a regular board meeting.
This was a strategic meeting to respond to recent policy shifts and industry trends.
In short: only those involved with the mobile business were present.
"I won't waste time on an opening speech."
Chen Jing had flown back a day early and spent the night before in discussion with Su Yuanshan until past midnight.
But even after that, she appeared full of energy—clearly riding the high of imminent transformation.
"Though this isn't a year-end review, let's start by having VP Duan share the mobile market data for last year." She nodded to Duan Yongping.
"Gladly." Duan cleared his throat and glanced around the room—Chairman Xi wasn't present today, and Su Yuanshan was flanked only by Qin Weimin, Tian Yaoming, and Li Yinan.
The room was otherwise filled with company representatives.
"To be brief: in 1996, our domestic mobile phone shipments reached one million units, with total sales of 4.5 billion yuan, capturing 15% of the national market."
He paused, then added, looking at Su Yuanshan, "We held 55% of the mid-to-high-end segment—phones priced above 4,000 yuan."
As the words landed, Su Yuanshan led the applause.
—His strategic goal had always been to target the mid-to-high-end market. If not for that, he had no doubt Duan could've doubled market share again.
Why? Because Yuanxin needed to sell chips and solutions.
During the applause, Wang Chaoxin sighed. "VP Duan... We've moved nearly two million units and still can't touch your profits."
"We're all on the same team," Duan replied modestly, before continuing with a serious tone. "The total sales figure is a rough estimate, but it shouldn't be off by much. National mobile phone sales doubled last year to 7 million units. Just a year ago, we had fewer than 4 million users. The latest figures show over 10 million."
"Exactly. The central government saw that mobile communications were growing faster than expected—hence the accelerated launch of the Ministry," Su Yuanshan added.
"So for this year... given the supportive policy environment, we project at least another doubling. Even if we fall short, hitting 10 million units will be easy."
"But more importantly, we now have several mobile manufacturing bases under construction across China."
Duan glanced at his notes, then at Chen Jing. After she nodded, he turned to Jiang Qingchuan with a smile. "President Jiang, this is your domain. Go ahead."
Jiang Qingchuan took a deep breath and nodded with a grin.
"Not the whole year—just looking at the most recent quarter's orders."
He looked around the room and said, "In 1997, our projected production across all brands is 15 million units."
The room collectively gasped.
Wan Yongliang quickly asked, "Is that just for the domestic market?"
"Not entirely." Jiang Qingchuan smiled. "Even with our current massive capacity, we're still only handling a small portion of the global demand."
"In other words, 1997 will be a boom year not just for China's mobile market—but globally as well."
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Chapter 589: A Milestone Victory for the YX Architecture
Chen Jing cleared her throat softly.
"President Jiang's analysis is very insightful. Judging from the attitude and strategic direction of our peers, we can indeed expect a major boom in the mobile and digital products market this year. However, when it comes to the surge in domestic orders, there are other contributing factors as well—I'd like to offer some additional perspective."
Hearing how Jiang Qingchuan had attributed the massive increase in recent orders and the wave of new domestic production lines entirely to a global explosion in the communications sector, Chen Jing felt the need to provide a more detailed explanation.
Jiang nodded with a smile. "Please, Director Chen."
Chen Jing glanced at Su Yuanshan, then slowly looked around the room before resting her gaze on the notebook in front of her.
"Starting from mid-1996, we noticed some unusual financial behavior emerging in several Southeast Asian countries. To protect the results of years of investment in that region, we teamed up with Xinghai Fund's financial experts to conduct a deep analysis of these irregularities."
She smiled faintly. "In the process, we more or less gave certain countries a full financial and monetary checkup."
Her analogy drew laughter around the room.
Aside from a few purely technical personnel, most attendees had at least a basic understanding of finance. Years ago, Su Yuanshan had used the example of George Soros's attack on the British pound to illustrate how fragile and flawed some Southeast Asian financial systems were.
Yes, those countries—often referred to as the high-flying "Asian Tigers"—had become paragons of rapid market-driven growth.
Back then, Su had half-jokingly said: those crops of "chives" just weren't ripe enough, or someone would have come to harvest them already.
"We discovered that these financial maneuvers were clearly premeditated. For example, in July, some institutions conducted carry trades—borrowing low-interest yen to earn 17% overnight returns in Thai baht. Classic arbitrage."
"As our financial review deepened, we determined that the region faced extremely high risks of a financial crisis similar to the 1992 pound sterling crash or Mexico's peso crisis in 1995."
"That's why we began scaling back operations in Southeast Asia and shifting our expansion priorities."
"And Yuanxin isn't the only smart player in the game. In fact, many companies have now begun treating us as a case study. As one of our designers put it: we're crossing the river by feeling for stones, and now half the industry is feeling their way across by stepping on us."
(Minor note: even back in 1996, Japanese scholars had begun expressing concern over a looming currency crisis in Asia. So Yuanxin wasn't exactly cheating.)
Another wave of laughter filled the room, tinged with pride.
"So, the surge in domestic contract manufacturing and orders is partially due to those early-stage relocations."
"With the establishment of the Ministry of Information Industry and promising signs from the domestic market, international players will begin valuing China's market more—and to cut costs, they'll accelerate the setup of manufacturing bases here."
Chen turned to Jiang Qingchuan, her tone becoming serious.
"President Jiang, this year is crucial for Hongyuan. You'll need to expand aggressively while bracing for all kinds of challenges. If you secure a solid foundation now… once a financial crisis hits Asia, it will trigger a large-scale migration of manufacturing from Southeast Asia to us."
"And when that happens… well, I don't need to say more, do I?"
Jiang Qingchuan pressed his lips together and nodded heavily.
At that moment, Tian Yaoming hesitated before asking, "Director Chen, I don't mean to argue, but… if Asia really does suffer a financial crisis, why would we be spared? How would we benefit from the shift in manufacturing?"
"Because we have financial sovereignty," Su Yuanshan answered succinctly. "And Tian, don't confuse a financial crisis with an economic crisis. They're not the same."
"Uh... okay, okay. I'll take your word for it." Tian shrugged. He'd just sit back and enjoy the show.
...
The meeting continued.
Hongyuan was called out specifically because this year would define its future. As Su Yuanshan put it, "dragon or worm—it all depends on today."
And Jiang Qingchuan hadn't come here just for the meeting. Yuanxin's leadership would soon sit down with him to strategize expansion plans. Su had already said: Hongyuan's 1997 expansion plan had no fixed production goal—only the requirement to always maintain excess capacity.
To that end, Hongyuan could raise funds and pursue acquisitions—whatever it took to expand output.
(Note: According to China's National Bureau of Statistics, domestic mobile phone production was just over 4 million units in 1996. In 1997, that figure jumped more than tenfold to over 50 million units. That's not even counting other manufacturing sectors. In other words, the Asian financial crisis was a feast for China. So yes, Soros might actually be a saint—stop vilifying him.)
"Back to the Ministry of Information Industry—specifically, the founding of Unicom and its implications."
Chen Jing took a sip of water and continued. "From what we know, Unicom will be the only company integrating cable, landline, and wireless communications. And there's word that they'll take over and standardize the currently chaotic paging services as their operational foundation."
"We've also learned that the government will spin off base station construction into a separate company, Tower Group, which will focus exclusively on infrastructure. Minister Li, your team already received that update, right?"
Li Yinan, long responsible for communications technology and infrastructure, nodded. He had previously worked at the grassroots level building base stations, though he'd recently retreated to the tech park to focus on R&D.
"Yes, Director Chen. These sweeping changes are clearly paving the way for Unicom."
"Exactly," Chen nodded. "All of it—every step—is about clearing the road for Unicom."
"And we've also heard that the state will allow Unicom, Telecom, and Mobile to operate under corporate management models, enabling a controlled degree of market competition. I don't have to tell you what the outcome of that competition will be, right?"
The room erupted in laughter.
Until now, Mobile had dominated mobile services, and Telecom monopolized landlines and internet access. Pricing and fees were unchallengeable. But with Unicom entering the game... it was clear the government wanted a "catfish" to stir up the waters and breathe life into the market.
"Director Chen, where do you get all this insider info?"
"Just listening," she said casually, scanning the room.
"Everyone, it's your turn now. Each of you must present strategies and proposals to ensure we seize this golden year for expansion."
"Who wants to go first?"
Everyone fumbled with their notebooks, glancing at one another. Qin Weimin nudged Tian Yaoming, who nudged him right back.
In the end, Qin gave in, scooting his chair forward.
YX architecture was the foundation of Yuanxin's entire mobile and digital strategy. Naturally, he would go first.
...
"I'll start with a quick recap of YX architecture's development over the past few years."
Qin cleared his throat and glanced at his notes. "First, in terms of licensing: as of today, our YX architecture has been licensed to over thirty chip design companies and institutions across various sectors. For example, Dianke's supercomputing center acquired our architecture and has been using it for high-performance applications."
"And in the Special Zone, Huamicro has brought YX architecture to life in the country's gateways and routers."
At this point, no one noticed the hint of pride on Su Yuanshan's face.
"Another example is MediaTek, spun off from United Microelectronics. Like us, they've focused on low-power, highly integrated SoC chips."
Wan Yongliang raised a concern. "Doesn't that make them a direct competitor in baseband chips? Are they even competitive?"
"Of course!" Qin said firmly. "Old Wan, you could think of our YX architecture licensing as almost free. Other than open-source options, no one offers it cheaper than we do."
"In the West, there's RISE, run by Huaju. Their R168X series chips, based on YX, have already gained traction, especially in Southeast Asia. Budget phones there either use RISE chips or MediaTek's."
"If you include Xinghai—in last year's tally alone, over 20 million YX-based processors were shipped globally. They were used in phones, digital devices, home appliances, PCs, and supercomputers."
"Put simply, we've already achieved a meaningful phase victory in the expansion of YX architecture."
Su Yuanshan took the lead in applauding.
Seeing him clap, everyone else joined in—whether it was out of respect for Qin or just following the boss's lead.
Some, like Chen Jing, understood Su's applause was genuine.
She knew that Su's ultimate ambition was never just to make money—it was to make an impact. And with YX architecture dominating the RISC field, that dream was already being realized.
"Our next priorities," Qin continued, "are expanding the global and cross-industry influence of YX, and optimizing our mobile SoC line."
"To prepare for the coming mobile market explosion, we'll launch a range of integrated solutions—from low-end to high-end—and increase production to reduce costs."
Qin glanced across the table at Wang Chaoxin, who was staring intently at him.
"President Wang, our baseband chip prices will drop by at least one-third. For the low-end chips, prices could fall to less than half of current levels."
"Excellent! That's exactly what I was waiting for!"
Wang Chaoxin burst into laughter, a weight finally lifted from his shoulders.
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Chapter 590: The Collapse of a Market
Zhongxin's origin traces back to the time when Su Yuanshan personally went to Huajing in Wuxi to secure a tape-out. By chance, he helped resolve a problem for Zhang Jianjun, and during dinner that evening, Su's vision for the future market thoroughly impressed Wang Chaoxin.
Without hesitation, Wang threw in his lot with Yuanxin.
At the time, many thought Wang had gone mad—technology was intangible. How could it possibly be worth millions?
That was 1991.
But Wang, a man from the textile industry, genuinely bought into Su's vision. Not only did he rapidly restructure his factory in Jiangyin, but he also threw everything he had into manufacturing pagers.
What followed was history—when the state opened up the pager station business to private capital, the pager market exploded.
With Yuanxin's technical support, Zhongxin actually surpassed giants like Motorola in the pager sector. Granted, due to limitations in materials and components, Zhongxin's pagers had a shorter lifespan than those of the giants—Motorola's models could last over a decade under testing conditions, while Zhongxin's were rated for about six years.
But so what? It had been six years already—who was still walking around with a six-year-old pager?
While Zhongxin made a fortune in pagers, they didn't rest on their laurels. They aggressively branched out into new sectors.
Yuanxin also supported them without reservation. Any new tech that Yuanxin didn't plan to produce itself, it handed over—cordless phones, for instance, went directly to Zhongxin even before Yuanxin built its own.
Wang didn't disappoint. Zhongxin quickly took over more than half of the domestic cordless phone market. The brand was exported throughout Southeast Asia, and sales had surpassed 500 million yuan.
And then there was the mobile phone business.
Today, Zhongxin had become a rising star semiconductor enterprise. Their business model was centered on profitable communication devices like low- and mid-range phones, cordless phones, and pagers. Technologically, they invested in chip design and semiconductor backend processing.
In the realm of private tech firms in China, only Yuanxin surpassed them in scale. Wuxi's "Chip City" frequently mentioned them in the same breath as Yuanxin, branding them the "Twin Cores."
This time, Wang had come not just to discuss communication technology trends following the creation of the Ministry of Information Industry but also to discuss how to handle the pager business.
—On paper, the pager market still looked vibrant. Pagers were cheap to manufacture and easy to scale.
Even the priciest pagers were still only 400 to 500 yuan—a tenth the cost of a comparable mobile phone. With expanding public phone infrastructure, a pager could satisfy most everyday communication needs.
And if needed, Wang could now produce Chinese-character pagers for under 100 yuan.
In the long run, pagers were doomed to be replaced by mobile phones. But the timeline for that replacement—gradual or sudden—was unclear.
—Perhaps only Su Yuanshan could see the signs clearly.
...
After Qin Weimin presented the YX architecture roadmap for the upcoming year, and no one else made a move, Wang Chaoxin opened his notebook and looked directly at Su Yuanshan.
"President Su, Director Chen. Our business strategy follows Yuanxin's roadmap—I won't repeat that. We position ourselves in the mid- to low-end segment, while Yuanxin focuses on the high-end. Our strength lies in market agility—our job is to keep pushing shipments."
That quick brush-off of the mobile phone discussion drew some chuckles from around the table.
Duan Yongping shook his head, laughing. "Old Wang, take it easy. With the Ministry stepping in this year, you'll see a lot of small players entering the low-end market."
"That's right. Be careful. Even the giant Shidazhu is launching new models in Las Vegas," Su reminded him with a grin. "They're priced at $299 in North America."
"...That cheap?" Wang blinked.
"Yeah, that guy's a classic market disrupter," Su added. "He's selling phones at near cost and only profiting from tax rebates. He's clearly just in it to stir the pot."
"So we can't afford to get complacent."
"Understood." Wang nodded and jotted down a note.
"Everyone, compared to mobile phones, what worries me more is our pager business. Last year, our pager shipments exceeded 3 million units. As of last month, there were 25 million pager users nationwide, and the growth rate remains solid."
"Now there's news that the new state-owned Unicom will take over the national pager network... That's undeniably good news."
Wang looked to Su Yuanshan, clearly hoping he'd weigh in.
Su noticed the look—he knew what Wang was thinking. Years ago, Su had already told him pagers would be phased out. That prediction must've been weighing on Wang's mind ever since.
Su took a sip of tea, then looked at Wang and swept his gaze around the room.
He saw He Wei already had her pen poised over her notebook.
"Before I answer, let me tell a quick story from the history of science."
"When quantum mechanics first emerged, Professor Einstein was a vocal skeptic. He acknowledged that it was mathematically elegant but felt it failed to bring us closer to understanding the true nature of the universe—or 'God,' as he put it."
"He famously said, 'I believe God does not play dice with the universe.'"
"In other words, Einstein believed the universe is fundamentally deterministic—not governed by probabilities. That every event has a traceable cause."
"But discovering those causes? That's the hard part. We all know pagers will be eliminated—by mobile phones. But how do we find the signs?"
Chen Jing raised an eyebrow. "So? What are the signs?"
"The signs are economic trends, consumer purchasing power and preferences, falling phone costs and prices, the appetite for newer products, and changing fashions..."
As he spoke, Su used his finger to trace lines on the table, as if sketching invisible graphs. The lines converged like light through a convex lens, focusing on a single point.
"When all those forces align, people suddenly ask: who still uses pagers these days?"
"The moment someone says that—that's when the market dies."
"If you want a timeline, I'll say: two years."
"In those two years, pagers will retreat to smaller cities and rural areas—and places like schools, where buying power is low but communication needs remain."
"But two years from now, pagers will be entirely obsolete. People will say, 'Who still buys those things?'"
Wang clenched his lips tightly, his brow furrowed.
Having worked with Su for years, Wang knew he rarely made definitive predictions. But when he did, you'd better believe them.
Whenever Wang faced uncertainty, he consulted Su—and always followed his advice.
But this time... Su seemed unusually firm. He believed pagers would peak—and then collapse.
That felt counterintuitive.
After all, pagers weren't like "brick phones"—they weren't replaced because they were too big or clunky. Pagers still worked.
After a long silence, Wang finally asked, "President Su, may I ask—why two years?"
Su smiled and was just about to answer when He Wei raised her hand.
His eyes lit up. "He Wei, you answer."
"Sure. President Wang..." He Wei leaned forward slightly so Wang could see her clearly.
"Because two years aligns perfectly with our projected mobile phone upgrade cycle. That's also when network access fees are expected to be drastically reduced—or even abolished."
"Right now, the number of phones on the market far exceeds the number of active network users. That includes second-hand phones. We estimate there are about one million used phones in circulation."
"Two years from now, unless they're completely broken, those phones will flood the market. And at that point, would you rather spend 200–300 yuan on a second-hand phone or 100–200 on a pager? And don't forget—phones can be used as pagers too."
Su nodded with a smile.
In later years, few people investigated why the pager market collapsed so quickly. Everyone just pointed to lower prices and better technology.
But the truth was simple: new phone prices dropped, second-hand supply surged, and when inventory thresholds were breached, the second-hand market killed the pager market overnight.
—You could already see the signs. Every shop that sold pagers also had signs saying "We Buy and Sell Used Phones."
After listening to He Wei's analysis, Wang finally let out a deep sigh.
"What a shame. It was such a good market."
Last year, he'd made hundreds of millions just selling pagers. Thinking it would vanish in two years—who wouldn't feel the sting?
He Wei smiled sweetly. "President Wang, pagers fulfilled their historical role. It's not a loss. Mobile phones are the real future."
"Right!" Wang quickly recovered and grinned. "Alright, Director He—what about cordless phones? Don't tell me two of our three communication devices are now sunset industries..."
"Cordless phones... you'll have to ask President Su." He Wei batted her eyes and tossed the question his way.
"Ahem... Don't worry. Cordless phones are part of the local phone system. They'll last for years."
Su cleared his throat, then turned to Chen Jing and smiled at Zhang Rujin.
Chen caught the cue, glanced at Wang, then looked at the ever-serious Zhang.
"Dr. Zhang."
"Yes, Director Chen." Zhang had been quietly listening all along. Now, he understood—it was his turn.
If YX architecture was the backbone of Yuanxin's mobile ambitions, then Deyuan's wafer fab was the heart of its entire chip business.
Without Deyuan, all the rest was just talk.
"First, let me share some good news."
Everyone turned to him immediately—good news from the wafer fab?
"Two days ago, our process team successfully completed the breakthrough on 0.35-micron node. We are now the fourth fab globally to achieve this, after Intel, IBM, and NEC."
As soon as he finished, Su Yuanshan and Chen Jing led the applause.
Although Deyuan was still about a year behind on the timeline, it had finally caught up to the critical process node.
Everyone knew: whether it's flash or RAM capacity, or CPU performance, everything hinges on the number of transistors.
The smaller the node, the higher the density—that's the essence of Moore's Law.
In the latter half of 1996, Yuanxin hadn't been doing as well as outsiders thought.
Why? Because Intel had beaten them to the 0.35-micron node and used it to retake the CPU performance crown.
Meanwhile, Sandisk and Intel's alliance had launched ever-larger flash chips. By last month, they were already shipping 64MB MLC units.
Li Mingliu's team at Yuanxin had already proven the feasibility of 3D architecture on paper. But limited by fabrication—specifically, etching—they hadn't been able to implement it.
Now that Deyuan had caught up, Yuanxin finally had the capability to compete with the IS (Intel + Sandisk) alliance in flash capacity.
"Beyond the process node breakthrough, our new fab in the Special Economic Zone will accelerate construction. We aim to begin production by the second half of this year," Zhang said, offering the assurance that everyone in chip and phone manufacturing had been waiting for.
"But... if a financial crisis does erupt, the semiconductor industry could face a deep freeze."
He looked at Su seriously. "President Su, not even wafer fabs are immune to a true winter."
Su pressed his lips together, then smiled.
"I've been waiting for the winter."
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