Chapter 424 Motorola's Predicament
Since Robert Galvin preferred a straightforward conversation, Lin Haoran decided to speak directly as well. "Mr. Robert Galvin, the main purpose of my visit today is to seek a cooperation agreement with Motorola. Your company's outstanding achievements and technological innovations in the communications sector have my utmost admiration. I believe that if we work together, we can surely achieve brilliant success."
Robert Galvin's eyes flashed with a hint of surprise upon hearing this, but he quickly regained his composure. He nodded slightly, signaling Lin Haoran to continue.
Lin Haoran went on, "I understand that Motorola holds a global leading position in mobile communication technology. I assume your mobile technologies are already quite mature, correct? Where I come from—Hong Kong—there's a pressing need for advanced communication technologies to drive the industry forward. Therefore, I hope to collaborate with Motorola to jointly develop the mobile communications market in Hong Kong."
Before coming to Chicago, Lin Haoran had already conducted a thorough investigation of Motorola. He knew that Motorola's technology in mobile cellular network systems was very mature and that its mobile phone hardware was ready for commercial use.
However, despite having mature technology, Motorola had yet to bring mobile phones to the market. Lin Haoran understood that there must be many hidden challenges behind this delay.
The key obstacle was government approval. Building mobile cellular signal networks in urban areas not only required massive infrastructure construction but also had to address complex technical issues such as signal interference, transmission distance, and coverage range.
Most importantly, it required clear government authorization to ensure the network's security, stability, and legal operation.
For Motorola, obtaining government approval likely wasn't difficult, given their military background and close ties with the government. However, truly bringing mobile phones to the market posed much greater challenges.
The most difficult part was that, to sell mobile phones, they first needed to build a complete mobile cellular signal network across the city. In a large city like Chicago, achieving full coverage would require an enormous investment—well over $100 million.
Extending such a network nationwide would require even more unimaginable funding.
Motorola had done detailed calculations: considering the proportion of wealthy potential customers in Chicago, it would take at least over a decade to recover the investment through local user subscriptions alone.
This was a long and uncertain process for any enterprise.
Yet it was precisely these difficulties faced by Motorola that revealed to Lin Haoran the potential for cooperation.
He believed that with his resources and influence in Hong Kong, and his deep understanding of the Asian market, he could help Motorola solve part of the problem and jointly promote the commercialization of mobile phone technology.
American cities had a unique characteristic: their populations were heavily concentrated in suburban areas surrounding the city centers. In contrast, Hong Kong's population was densely packed within a very small urban core.
As Motorola's hometown, Chicago would naturally be their first target for commercial deployment. However, if they only covered a few square kilometers in downtown Chicago, mobile phone functionality would be greatly diminished, since most people didn't live downtown—they were scattered across the suburbs.
This meant that to make mobile phones truly viable, Motorola would have to build a network covering a vast area of greater Chicago, requiring even more astronomical investments—again exceeding $100 million.
Meanwhile, Motorola's research labs were engaged in a wide variety of R&D projects, many of which demanded long-term investment with no short-term returns. This perpetual funding demand was one of the reasons Motorola's stock price remained sluggish: it was common knowledge that the company reinvested most of its earnings into R&D, leaving relatively thin profits.
Thus, it was unfeasible for Motorola to allocate $100 million just to build a mobile cellular network, especially when the return on investment was so distant.
Looking externally for investment partners was even harder. Although Motorola's mobile network technology was advanced, it was not unique. Their competitor, Bell Labs, had already co-developed a cellular mobile communication system with Motorola four or five years earlier and had successfully conducted operational trials.
This meant that while Motorola's mobile communication technology was excellent, it was not overwhelmingly superior to others.
Moreover, technology companies from Japan and Europe also possessed formidable capabilities in the mobile communication field.
They too were actively seeking cooperation partners, yet private investors showed little interest because of the long return cycles—unless government investment was involved.
Hong Kong, however, was different. The central urban area was relatively small, covering just the northern part of Hong Kong Island and the southern tip of the Kowloon Peninsula. Almost all of Hong Kong's population was concentrated in these areas.
Other parts—such as the southern parts of Hong Kong Island, the northern New Territories, Tuen Mun, Yuen Long, Sha Tin, and Lantau Island—were sparsely populated and could be ignored for now.
An investment focused solely on Hong Kong's densely populated regions could quickly bring the mobile cellular network into commercial operation.
This meant that compared to a large city like Chicago, the investment required to build the network in Hong Kong would be drastically reduced—perhaps just $20 to $30 million, or even less, to cover the critical urban areas effectively.
This investment strategy not only significantly lowered the costs but also greatly improved the return on investment.
Due to Hong Kong's extremely high population density and the disproportionately large number of middle- and high-income residents compared to Chicago, the payback period for the investment would be considerably shorter.
Once the network was established and operational, it could start generating profits quickly.
Moreover, if Lin Haoran could seize the initiative and dominate Hong Kong's mobile communication market, he would gain a tremendous competitive advantage.
If this cooperation succeeded, he wouldn't just control the fixed-line telephone market—he would also dominate the mobile communication market.
Using Hong Kong as a center, he could later expand outward.
As Asia's financial and trade hub, Hong Kong's market potential, influence, and consumer capacity were immense.
With a population exceeding five million and ranked as the third-largest global financial center, Hong Kong offered vast business opportunities.
Meanwhile, Chicago, the third-largest city in the U.S., had only about two million residents, most of whom lived in suburban villas.
"Cooperation in mobile communication technology?" Robert Galvin asked curiously. "Mr. Lin, are you proposing to build a cellular mobile network in Hong Kong?"
"Exactly," Lin Haoran confirmed with a nod. "As far as I know, Motorola has been conducting large-scale trials of this technology, but the costs have been prohibitively high, preventing commercialization. Hong Kong, with its moderate size, is an ideal pilot city. I propose that we collaborate—Motorola provides the advanced technology support, and I will handle the investment. As for equity distribution, we can negotiate based on the actual contributions. What do you think of this cooperation plan, Mr. Galvin?"
Upon hearing this, Robert Galvin fell into deep thought.
He carefully weighed the pros and cons of the proposal and couldn't help but feel a strong interest.
Finding a partner willing to shoulder the investment risk would be a tremendous boon for Motorola.
Indeed, Motorola had already developed fairly mature technology. To be precise, they had produced the first mobile phone as early as 1973. Though the early devices were bulky and not suitable for mass commercialization, their technology had improved significantly over the past eight years.
Their mobile signal network technology was also quite robust, having undergone multiple small-scale trials.
However, wide-scale commercial deployment remained extremely challenging.
The U.S., after all, was a vast country with a sparse population. Even if one were willing to invest heavily in a city like Chicago, the potential user base for mobile phones was relatively small, and it would take years or even decades to recover the costs.
As businessmen, profit always came first.
The high construction and maintenance costs made large-scale commercialization daunting.
Hong Kong, on the other hand, was entirely different.
As a compact city with high population density, building a mobile network there was relatively easy.
Moreover, as the financial and trading center of Asia, Hong Kong had a large number of wealthy residents with a strong demand for advanced communication technologies.
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