Shenzhen, March 20, 1983. Pen Fun Pavilion wWw. ｂiquge。 ｉｎfo

Xinfei Electronic Technology Co., Ltd.'s newly put into production VCD player and CD production line officially announced that it has entered the stage of industrial production.

With CD and CD-ROM production lines as the foundation, it is very easy to put the VCD production line into production. After all, most of the components are generic, except that VCDs have some more circuit boards and decoding chips.

In essence, VCD can also be understood as a kind of "computer", but due to cost savings, its chip only provides the function of decoding and playing VCD format audio and video files.

Computer users who have a CD drive, in fact, only need to buy another decoding chip to have the function of VCD. Later, after the computer became more and more powerful, there was no need to buy a decoding chip at all, and the general audio and video playback software could decode various common formats of audio and video files.

But now, VCD is definitely high-tech, at least, higher than the technology content of TVs!

Ke Cilei, president of Xinfei Electronic Technology Co., Ltd., said with emotion to the person in charge of the foundry: "I have a hunch that the new venture electronics company may surpass Philips in the future. ”

"Maybe. Li Yuntao, the head of the foundry, did not express his opinion.

Including the newly produced VCD, it is not produced by the brand manufacturer Xinfei Electronic Technology Co., Ltd., but outsourced to the professional OEM company Xinai Electronics.

Founded in Beijing and rising in Shenzhen, Xinai Electronics Co., Ltd. has almost all the complete production of arcade machines, handheld computers, TV hosts and CDs and other products of the new start-up electronics company.

With the best-selling of these products all over the world, Xinai Electronics currently employs more than 100,000 workers.

The CD-related assembly plant alone has more than 10,000 workers. Because, CD players, CD-ROMs and other products together complete more than 6 million orders per year.

Even if the foundry only makes a little hard-earned money, due to the huge scale of orders, the net profit is not less than 30 million a year!

And that's just the foundry's profits, Xinfei Electronics is currently an oligarch in the CD industry, with annual sales of more than $2 billion, and a net profit of $50 million after deducting various costs. This is still the result of continuous price reductions in small profits and quick sales to expand market share. If it is simply pursuing profits, it is not difficult for its net profit to reach about two or three billion US dollars.

And the current development of CD, which has exceeded Philips' expectations, is not only applied to the music market. Moreover, CD-ROMs have squeezed into the market for game consoles and computer accessories.

Now, the launch of another VCD product is to further extend the product line to the home theater market.

At this moment, Ke Cilei was full of pride and felt that he was changing the world. Yes - this great success is not only due to the fact that the company led by him has grown rapidly and has the hope of becoming one of the world's top 500 companies.

What's more important is - go public!

That's right!

After several rounds of friendly negotiations, the two major shareholders of Xinfei Electronic Technology, Xinchuang Electronics Company and Philips Group, the plan for the joint venture company is to seek an IPO in the United States in the next few years.

The current executives of Xinfei Electronics Company have all received call options. If they can go public, they will be able to subscribe for shares from the two major shareholders at the valuation they had before they went public.

He currently has a call option that allows for a 1% stake in the company, which is valued at the company's value of $500 million. In other words, he still needs to pay $5 million out of his pocket to buy the stocks. But if it can be listed, with Ke Cilei's understanding of the company, a little bit of performance, the stock price will definitely be able to go to the sky.

It is conservatively estimated that the reasonable IPO market value of Xinfei Electronic Technology Company in the future will not be less than $1 billion, and if the market gives a high valuation of 100 times the price-earnings ratio of Apple, then ...... The market value of Xinfei Electronic Technology Company can reach 5 billion US dollars!

……

VCD is not technically complicated, that is, on the basis of CD technology, MPEG-1 compression coding technology is adopted.

This technology originated in 88 years, and was established by ISO (International Standardization Organization) and IEC (International Electrotechnical Commission) to develop international standards for moving images and speech compression. This is officially known as the Moving Picture Experts Group, or MPEG for short. Subsequently, the organization implemented a series of standards for video file compression. The MPEG-1 compression coding technology standard was officially released in 92, based on this technical standard, and later derived two major applications - VCD and MP3!

The MPEG-2 standard was only released in '94, and the main application of this low compression standard is DVD.

Historically, VCD was born in China, but the core decoding chip of this product was first launched by C-CUBE.

Jiang Wanmeng, who was still working at Anhui TV in 92, was sent to the United States to participate in the International Radio and Television Technology Exhibition.

At this exhibition, Jiang Wanmeng was firmly tied to the MPEG decompression technology, an inconspicuous technology exhibited by the American C-CUBE company.

Jiang Wanmeng is keenly aware that MPEG technology, which can store images and sound on a relatively small disc, means that it can create a high-quality and inexpensive audio-visual product for ordinary people to use at home. Sun Yansheng, the chairman of C-CUBE, happened to be an American Chinese businessman, and the two hit it off, determined to develop MPEG technology into electronic consumer products, founded Wanyan Company, and took the lead in producing and launching VCD products.

Of course, Wanyan's MPEG decoder components are still imported from C-CUBE in the United States, and nominally, Wanyan "invented" VCD. But in fact, it does not have the core patent at all, and the MPEG compression standard is a technical standard published by the international standards organization, and the first C-CUBE company to make a decoding chip based on this standard. In addition, VCD reading discs are based on CD-ROM technology, and various parts of CD-ROM cannot be produced by Wanyan itself, and need to be imported from Europe, Japan and other international manufacturers.

It is precisely because Wanyan Company does not have a patent moat at all, so it quickly caused hundreds of manufacturers to follow suit soon after it took the lead in launching VCD. Soon, in the trend of VCD, Wanyan, who took the lead in launching VCD, became a stepping stone for the rise of other friends.

Although C-CUBE gives priority to the supply of Wanyan, there is more than one company that can make decoder chips, and C-CUBE is only the largest manufacturer of VCD decoding chips, and does not have the ability to monopolize the market.

Therefore, the first few thousand VCDs developed by Wanyan Company were listed, and they were basically bought by "friends" to learn and reference. Subsequently, it quickly lost ground in a hostile competitive environment.

Even C-CUBE was later merged by other semiconductor giants because of its single business and only the production of low-tech audio and video decoding chips.