Chapter 156: When a Whale Falls, Everything Grows

In the 1980s, the American Department of Justice carried out a vigorous anti-monopoly action, breaking up the global telecommunications giant Bell, which led to the appearance of eight Bell companies of varying sizes. Companies like Canada Bell also belonged to the American Bell company in their early years.

When a whale falls, everything grows. The collapse of the Bell Empire led to the appearance of a host of telecommunications companies in dozens of states in America, according to regions.

Telecommunications companies like Atlantic Bell, which were broken off from the Bell company, all wanted to return to the peak period of the Bell Empire back then, and the competition in private was very fierce.

The lethality of Atlantic Bell launching the activity of getting a digital cordless phone as a gift for topping up phone bills was simply too great, making the American telecommunications industry open its eyes wide. For the first time, it gave birth to the feeling of "living long enough to see anything"—the telecommunications industry could actually be played like this!

According to the requirements of this activity, users only needed to top up $150 in phone bills at Atlantic Bell to receive a Simon brand phone for free. Topping up $400 in phone bills allowed one to receive a Coolpad phone.

As for receiving a Shenzhou phone, the cost was slightly higher—one had to top up $900!

And if they were new phone users opening an account at Atlantic Bell, they could enjoy more discounts.

The difference between the phone industry and other industries was that users needed to pay fees every month whether they made calls or not. Now, by pre-depositing phone bills for half a year or a year, they could receive the most fashionable digital cordless phone for free. Should they do it?

The American people, who had also never experienced this kind of routine, gave the answer with actual actions. Once the promotion was launched, rare long queues formed in front of Atlantic Bell's telecommunications business stores, exactly the same as the long queues that formed when new supermarkets in the mainland opened and gave away eggs!

After launching the activity, Atlantic Bell attracted over 100,000 new registered users in three days. One had to know that these were new users! Under the completely mature telecommunications system in America, every time Atlantic Bell added a new user, it meant one fewer old user for other telecommunications companies!

With the rise of one and the fall of another, major telecommunications companies were completely red-eyed toward Atlantic Bell. What was the difference between this activity and digging up their lifeblood? Was this something a decent person could do?

Apart from new users being snatched away, what made telecommunications companies like Sprint, WorldCom, Pacific Bell, and Chicago Bell even more red-eyed was that in three days, Atlantic Bell had raked in $110 million in pre-deposited phone bills from users!

If they could still hold on before, seeing Atlantic Bell absorb money so fiercely in just a few days, they were completely unable to hold on.

One had to know that these pre-deposited phone bills, entering Atlantic Bell's account, basically counted as Atlantic Bell's revenue, although it was collecting phone bills that were half a year or even a year away in advance.

But in the next quarter, Atlantic Bell's revenue would be off the charts. With this huge sum of income, whether Atlantic Bell invested in other projects, acquired companies, or just deposited it in the bank, it could obtain a large amount of profit.

And how did Huaerjie view this activity launched by Atlantic Bell in cooperation with Shenzhou Phone? Atlantic Bell's stock price explained all the problems.

In just a few days, Atlantic Bell's stock price took off directly on the spot, rising over 15%. Major investment institutions on Huaerjie all raised their revenue estimates for Atlantic for the next quarter, and the stock price was also all bullish!

With just one activity, users, revenue, and stock price all flew high. The influence brought by this "top up phone bill and get a gift" activity by Atlantic Bell exceeded the imagination of the American telecommunications industry. Atlantic Bell CEO Lei Mengde had also been blown to the heavens by the company's board of directors and the media in these past few days.

"This project was proposed by Shenzhou Phone. Atlantic Bell is very happy to be able to cooperate with Shenzhou Phone on such a project. Atlantic Bell and Shenzhou will be the best partners!"

Although he was being touted by the media, when Lei Mengde accepted media interviews, he also knew how to measure. Now, Shenzhou Phone was crucial to Atlantic Bell. For every extra day they could cooperate exclusively with Atlantic Bell, Atlantic Bell could pull in a large group of new registered users and a huge sum of pre-deposited phone bills.

The major price cuts of Coolpad and Simon made these two brands start selling hotly in retail stores like Best Buy, Target, and Costco. Say a thousand things and ten thousand things, no matter how much advertising was done, price was the most critical thing!

Although Shenzhou didn't lower its price, the hot sales of Coolpad and Simon still drove Shenzhou's sales. Moreover, the price cuts of these two brands instead set off Shenzhou's status in the high-end digital cordless phone field even more.

Many people instead bought into this. Among a product, when numerous brands lowered their prices, the one that didn't lower its price instead would be considered by people to have good quality and "style."

Coupled with the fact that America was a country where the middle class was the main force of consumption, these users instead liked to buy "high-end goods" when buying things to show their taste in life. Shenzhou's brand positioning instead fit their minds.

Price cuts, coupled with the activity held jointly with Atlantic Bell, made the sales of the three major brands—Shenzhou, Coolpad, and Simon—continue to soar. After breaking through 640,000 units in a single day, the Shenzhou series of phones had already attracted the attention of countless electronic, financial, and other industry media in America and overseas.

And right under the spotlight of everyone, Shenzhou once again blasted out sales of 790,000 units in the American market in a single day, completely igniting public opinion!

"Shenzhou and its sub-brands Coolpad and Simon set a record of breaking through 910,000 units in single-day sales in North American markets such as America, Mexico, and Canada!"

The Huaerjie Journal also once again aimed its gaze at Shenzhou. Just a month ago, the Huaerjie Journal had also published an article claiming that Ximen had already obtained the advantage in digital cordless phones in America. But the Huaerjie Journal probably hadn't expected that the slap in the face would come so quickly, and that it would actually be reversed by Shenzhou.

"Facing the price war launched by Shenzhou Phone, Ximen is somewhat powerless to fight back. Families above the middle class prefer Shenzhou, which has a higher pricing."

"And in the mid-range and mass market, Coolpad and Simon have established an absolute price advantage, especially since the current selling price of Simon phones is already close to the production cost of Ximen phones."

"The only thing that cannot be determined now is whether this price war launched by Shenzhou is a loss in marketing, or if it has truly established an advantage in cost and broken through to develop key components like phone chips!"

The Huaerjie Journal pointed out sharply whether this price war launched by Shenzhou Phone was selling at a loss to earn a shout—losing money on every machine sold—or if it had developed its own chips and components and lowered production costs.

There was a world of difference between the two. If it were the former, then this price war by Shenzhou Phone couldn't be maintained for long. Killing one thousand enemies and losing eight hundred, the more they sold, the more they lost. In the end, they wouldn't be able to play anymore.

And if it were the latter, then not to mention the digital cordless phone market, the global landline phone industry would probably be completely changed!

If Shenzhou Phone's parent company, Dongling High-Tech's Dongxin Semiconductor, had developed phone chips, then relying on domestic labor, resources, and large-scale production advantages, any manufacturer in the world producing phone chips, whether it was Toshiba, Hitachi, or Ximen's Infineon, would fundamentally be unable to compete with Dongxin Semiconductor. The global landline phone chip market would all be snatched away by Dongxin Semiconductor!

Once this report from the Huaerjie Journal came out, not only Ximen, but other companies wanting to enter the digital cordless phone market—Panasonic, Philips, General Electric, AT&T—as well as a host of chip manufacturers like Toshiba, Infineon, Hitachi, and Texas Instruments, all cast their gazes over.

"Impossible, absolutely impossible. How could they possibly develop phone chips!"

Inside the Ximen office building, Thomas, with red eyes, was cheering on a host of Ximen phone America supervisors, and in reality, he was also cheering himself on.

In less than a week, the so-called advantage Ximen had established in America had collapsed. Daily sales had fallen from a peak of over 400,000 units to less than 80,000 units now.

Looking at Shenzhou Phone, sales were growing like crazy. Thomas could only gamble now—gamble that Shenzhou Phone was selling at a loss to earn a shout, rather than having developed phone chips. Otherwise, in this battle, Ximen would never be able to reverse the situation again. The selling price of Simon was the same as Ximen's cost. How the hell could this be fought?!

"This kind of price-cutting strategy, Shenzhou definitely won't be able to maintain for long. We still have a chance!"

Looking at the hysterical Thomas, Compton, who was responsible for consulting, had a face full of worry. As a person from a consulting firm, placing victory on the opponent in reality already meant defeat.

As the consulting firm invited by Ximen, if Ximen failed, A. T. Kearney would also have no face. As the person in charge on A. T. Kearney's side, even if he didn't have to take the blame, for a long time to come, he estimated that no company would be willing to cooperate with him.

Just when Thomas was saying with certainty that it was impossible for Shenzhou Phone to develop chips on its own and that this price cut couldn't last long, Shenzhou Phone successively announced cooperation with Canada Bell, Mexico Telecom, Pacific Bell in California, and Southwestern Bell in Texas. Immediately, these telecommunications giants announced the launch of the activity of topping up phone bills to get digital cordless phones as gifts.

Cooperation with more telecommunications giants made the sales of Shenzhou, Coolpad, and Simon soar further. Single-day sales in North America directly broke through one million units. The scenario Thomas hoped for—that Shenzhou Phone would lose money and be unable to continue playing—not only didn't happen, but instead, it continued to sell wildly without stopping.

And just at this time, a news report from Tokyo Finance in Japan attracted the attention of countless people, and then it was spread wildly by Hong Kong and mainland media.

"According to relevant personnel from Toshiba Semiconductor, currently the world's largest digital cordless phone manufacturer, Shenzhou, Coolpad, and Simon's parent company, Dongling High-Tech, has rejected Toshiba Semiconductor's request to raise prices for phone chips again!"

"And it has notified Toshiba Semiconductor that after the contract ends, it will no longer purchase new phone chips from Toshiba Semiconductor. Currently, Toshiba Semiconductor President Kawanishi Tsuyoshi has not issued a statement on this matter!"

(End of chapter) ===== CHAPTER 157 =====