Xie Jianyong was a seasoned mobile phone designer. After listening to Xu Shenxue's vision and thinking it through, he realized what Xu Shenxue wanted: a mid-to-low-end smartphone.
This was going to be a real smartphone.
However, designing smartphones was an entirely different challenge from making feature phones. Regardless of whether a smartphone was high-end or low-end, it still required essential components: sophisticated chips, a large capacitive touch screen, and a smartphone operating system.
Creating a smartphone, even a basic one, was a monumental task.
After a long pause, Xie Jianyong finally said, "Boss Xu, we can definitely do it if we're willing to invest enough. The hardware and systems are available on the market. All we need to do is integrate the hardware and customize the system software."
"But we'd need to customize Android, optimize the interface, and integrate the hardware. This would likely require at least one or two hundred experienced engineers working for an extended period. I'm talking about genuine engineers, not novices… The R&D costs will be enormous."
Xie's tone turned more serious as he continued, "Everyone knows the potential of smartphones, but nobody in Huaqiangnan has tried to make one yet. The technical demands are too high, and the R&D investment is prohibitive."
"Most manufacturers here are waiting for Lianke to release a smartphone solution. Once they provide a packaged solution, it'll be much easier. Optimistically, that will take about three years. It won't be too late for us to join in then."
Xu Shenxue acknowledged that Xie's points were valid and reflected the cautious strategy most would consider the wisest choice. Historically, Huaqiangnan's lesser-known brands didn't enter the smartphone market until 2012. This was largely because Lianke didn't release a smartphone solution package until late 2011.
Lianke's affordable chips and technical support enabled Huaqiangnan manufacturers to produce smartphones. However, this sudden influx of low-end branded phones left no room for smaller players to profit.
Before Lianke's solutions, smartphones were the domain of major manufacturers with deep pockets and advanced capabilities. Even if a company could source hardware externally, integrating it was an immense challenge. Customizing and modifying Android was another hurdle altogether.
For major manufacturers, entering the smartphone market at this point was an opportunity. For weaker players like Weiku Electronics, it was akin to jumping into a fire pit, risking massive investment for little to no return.
But… Weiku Electronics was no ordinary company now. Xu Shenxue had a system.
With the scientific research system, Xu Shenxue could transform an average technician into a core technical staff member, a core member into an expert, and an expert into a world-class innovator.
This system drastically reduced R&D costs and timelines. When other companies needed to hire million-yuan engineers and spend years developing technology, Xu could use his system to elevate lower-cost engineers into highly productive researchers, significantly shortening development time.
The scientific research system also fostered inspiration and innovation. Challenges that stumped entire teams for years could be overcome by a single individual with enhanced talent and insight, solving the critical "0-to-1" problem.
This advantage was precisely why Xu Shenxue decided to pursue smartphones. He already envisioned the product:
Aluminum alloy metal body.
3.5-inch screen.
Three physical buttons on the front: Home, Back, and Menu. Ideally, these would be touch buttons, but physical ones would suffice if necessary. Fully virtual buttons were preferable, though it depended on early Android's capabilities and the feasibility of customization.
The phone would feature a Qualcomm or Samsung chip, coupled with assorted components for assembly. It would have a non-removable battery to optimize weight, thickness, and internal space while allowing for a larger capacity battery—all critical for achieving an elegant design.
Performance was secondary for this first smartphone. Early Android's capabilities were limited, and budget constraints ruled out high performance. The phone simply needed to function adequately.
Appearance, however, was paramount. Whether or not a phone worked well was something users discovered later, but its design was visible to everyone from the start.
To ensure the best possible aesthetics, Xu opted for an aluminum alloy body and non-removable battery to achieve a thinner and sleeker profile.
Under normal circumstances, developing such a phone would demand significant R&D investment and substantial technical expertise. But with the scientific research system, Weiku Electronics could feasibly create a competitive smartphone.
While Xu Shenxue's system reduced costs, developing smartphones still required significant funding. Salaries for engineers alone represented a considerable expense. Fortunately, Weiku Electronics had assets.
Despite recent struggles, the company remained profitable, earning over a million yuan in net profit last month. While declining revenues and profits were a concern, Weiku's financial foundation, built under the original owner's father, remained strong.
The company's founder had managed the business conservatively, reinvesting only part of the profits into production and R&D while saving the rest for emergencies. As a result, Weiku owned substantial assets:
Industrial land and factory buildings.
A self-owned storefront in Huaqiangnan.
A large office in the city's CBD, rented out for additional income.
These fixed assets alone were worth tens of millions. Additionally, Xu's father had distributed dividends over the years, investing most of the proceeds into stable assets, including real estate.
By leveraging the company's cash flow and mortgaging part of its assets, Xu calculated that he could raise 30 million yuan without disrupting operations. Including revenue from low-end feature phone sales, Weiku could allocate 40 to 50 million yuan for its smartphone project in the first year.
This figure didn't account for Xu's personal assets of 20 million yuan or the additional 10 million in assets held by his mother. However, Xu had no intention of investing personal funds in the smartphone project. Despite his confidence, he knew better than to risk everything on a single venture.
With a clear plan and financial backing, Xu Shenxue was ready to lead Weiku Electronics into the smartphone era—but not without keeping a safety net in place for the future.
(End of Chapter)