December 10, 1985, Dongguan. Humen Film and Television City is a specially equipped telecommunications branch.

Dozens of technicians in the computer room of the entire telecommunications bureau cheered: "Success!"

"The domestic 500-door program-controlled switch has been successful!"

"Contact Boss Lin and tell me the good news!"

"Yes, tell Boss Lin that we succeeded!"

Humen Telecom Branch, which is the supporting facilities of Humen Film and Television Base. Therefore, at the request of Xinchuang Electronics, the Telecommunications Branch will introduce the telecommunications equipment developed by Xinchuang Electronics.

Codenamed "XD500", the program-controlled switch project is a very inconspicuous small project within the new venture electronics company.

When Lin Qi saw that there was a project application, he didn't blink his eyes, and he didn't even look at the specific project book, and only saw the project name of the program-controlled switch, and approved the fund.

Lin Qi didn't pay attention to how the project went, and it was only a small investment anyway.

However, I didn't expect the project team to be quite competitive, and it took tens of millions of dollars in a few years to develop the product.

……

Lin Qi received a call from Humen in Shenzhen, and soon came to Humen in person to cheer for the switch R&D team.

"Congratulations, after two years of hard work, we have developed 500 program-controlled switches, filling the gap in domestic program-controlled switch technology. The 500-door program-controlled switch, although it looks inconspicuous, is far from being compared with the 10,000-door switch of the international counterparts. However, I believe that Qianmen switches and Wanmen switches have also developed bit by bit from this basis. In addition, there are many small towns in the country, which simply cannot afford to use 10,000-door switchboards, and even imported 100-door program-controlled exchanges cannot afford to use them; the kind of villages and towns with relatively small populations, if they want to talk to telephones, the best solution is to use cheap domestic program-controlled exchanges! At present, telephones in our country have not yet been popularized, and only a few million households have telephones, and according to the economic growth rate of our country since the beginning of the reform, there will inevitably be a rigid demand for communications, so the telephone penetration rate will increase rapidly in the future. At present, the biggest obstacle to restricting the popularization of telephones is that the equipment of program-controlled switches is too expensive! And the greatest significance of the successful research and development of our domestic program-controlled switches is to reduce the price of program-controlled switches, thereby lowering the threshold for telephone access to households, enhancing the domestic telephone penetration rate, and then contributing to the domestic communication efficiency and economic growth!" Lin Qi said to the staff present, "Now, 500 program-controlled switches are just the beginning, and everyone should have more things to do." First, the market, put into production as soon as possible, promote it to the domestic market, the cheapest route, an imported 500-door switch at least 200,000 yuan, then, 20,000 yuan can we do it, in addition, 20,000 yuan can be sold can make money?

"Yes, of course you can!" Wang Dayou, the head of the R&D team, patted his chest and promised, "Although the cost of a 500-door program-controlled switch exceeds that of the Pangu host, it is not expensive." After the technical threshold is broken, the mass production cost is definitely the price of cabbage! If it is sold for 20,000 yuan, it is conservatively estimated that it will make a gross profit of 5,000 yuan!"

Lin Qi nodded and said: "Okay! Then, the 500-door program-controlled switch has been developed and program-controlled, and the remaining switchboard with a larger capacity should also be used as a challenge project, in addition, there is also the terminal of the telephone, which must also be a telephone based on IC chips, and it must also be the price of cabbage! Now a telephone costs two or three thousand yuan, which is too much! A TN LCD panel, plus a chip and circuit that is not as complex as our Wenqu Xing, dare to sell it so expensive! I think this price is distorted, the normal price is two or three hundred yuan! All in all, we must suppress these unreasonable prices to a reasonable degree! The price of cabbage is the truth!"

"Long live the price of cabbage!" The R&D team present was like a chicken, people, at least have ideals and goals. It is only that the research and development is successful and fills the gap, and after this goal is achieved, the spirit is empty and there is no goal to strive for. However, Lin Qi pointed out a completely new direction, raising the prices of program-controlled exchanges and telephones to the price of cabbage, and putting an end to the huge profits of the international oligarchs! This very inflammatory slogan immediately aroused the emotions of everyone present.

Since the birth of the telephone, the exchange has been the most core technology. After more than 100 years of development, at the beginning, it was only a manual exchange, that is, after dialing the number, specialized personnel were needed to manually wire, and after that, they could call each other. With the increasing number of telephone lines, the traditional manual wiring technology can gradually not meet the busy telephone dialing business, so the use of electromechanical technology to connect specific lines has emerged. Of course, this technology is just replacing manual labor with machinery, and then, there are a bunch of mechanical failures, which is not too stable. Therefore, the program-controlled exchange was born, which uses advanced integrated circuit technology to improve the stability and efficiency of the telephone exchange.

In the 60s, Bell Laboratories in the United States began to study program-controlled switching technology, and in 1970, France took the lead in adopting program-controlled switching technology, which greatly improved the efficiency of telephone communication. As a result, countries around the world quickly followed up, and program-controlled switches have gradually become one of the most profitable devices in the global communications industry.

After the reform and opening up, China also began to negotiate with Europe, the United States, Japan and other countries to introduce process control switches. By November 82, Fuzhou introduced Japan's F150 program-controlled switch for the first time. This kind of 10,000-door program-controlled exchange made Fuzhou the first city in China that could make a call within ten seconds. It is precisely for this reason that large-scale introduction of controlled switching equipment has begun across the country.

Since this kind of equipment cannot be produced independently in China and is completely dependent on imports, it can only be left to international manufacturers to shout prices. The cost of connecting a phone line to a phone line is more than $1,000!

Even by the beginning of the 90s, the cost of a phone in the country was as high as $400. It is precisely because of the profiteering space of program-controlled switching equipment that many domestic enterprises in the 90s coincidentally chose program-controlled switching as the direction of entrepreneurship.

In the early 90s, Julong Company took the lead in launching Julong program-controlled switches, which received a good market response. Next, Datang, ZTE, and Huawei have successively entered the switch market, forming a "huge China" domestic switch gradually relying on cost performance, snatching the low-end market back from overseas manufacturers. Later, Huawei became the leader of the world's telecommunications equipment industry, and ZTE also became the top four communication equipment manufacturers in the world.

The gap between ZTE and Huawei and the international telecommunications equipment giants in the early days was a world away, but it gradually counterattacked, surpassing one international giant after another, and the secret of success is - cheap!

At the price of imported program-controlled switches, more than 90% of the domestic regions cannot afford to use them. Therefore, after some economically developed areas began to use program-controlled exchanges, most parts of the country are still using vertical and horizontal telephone exchanges. The domestic low-end program-controlled switchboard is much more advanced than the vertical and horizontal telephone exchange, even if it is garbage. It is precisely for this reason that ZTE, Huawei and other companies are like wildfires, quickly occupying the market in towns and fourth- and fifth-tier cities. It occupies most of the low-end market, and although the profits obtained may not catch up with the high-end market, it has gradually upgraded the talent team and experience and technology accumulation to the point where it can compete with foreign giants.

Compared with ZTE and Huawei, which had a difficult start later, the biggest advantage of the new venture electronics group is that the parent company has deep pockets. For ZTE and Huawei, the initial investment of tens of millions of yuan in the program-controlled switch market is undoubtedly a big gamble that has suppressed most of the value, and the company will go bankrupt and the team will be disbanded if it loses.

The new venture electronics company has invested more than 50 million yuan in the program-controlled switch project, which is a very large investment in scientific research in China. But for the new venture electronics, it is just a little money to try new market prospects. The company has a very promising project, and the loss is insignificant if it fails.