Tech giants start by disassembling systems

Chapter 66 Low Price

2018 October.

Tianying did something that the entire industry didn't expect.

It signed an exclusive cooperation agreement with a Shenzhen company called Xingchen Flight Control. Xingchen Flight Control is not a well-known company—it is one of the few small flight control solution providers that survived the reshuffling. Its technical level is not as good as Hongyuan, but its price is extremely low.

The collaboration was simple: Star Flight Control provided Skyhawk with a customized flight control solution, which Skyhawk then integrated into a brand new product.

This product is called "Tianying S1". It is priced at 999 yuan.

This price caused an uproar in the entire county's drone market.

F3的售价是2199。天鹰猎鹰工业版是1699。而天鹰S1直接杀到了999。

Although the S1's flight control quality is far inferior to the F3, and even to the Falcon Industrial Edition, it only costs 999. For many small business owners in county towns who are just starting out, 999 means extremely low trial-and-error costs.

The day the news broke, Meng Xiaoyi's phone rang.

All three sales team leaders reported simultaneously: customers are starting to hesitate. Some customers who were originally planning to buy the F3 are asking, "Can the 999 Tianying model be used?"

Meng Xiaoyi reported the situation to Su Chen.

Su Chen didn't answer immediately. He asked Zhou Ming to buy an S1 to test it.

The result was as expected.

The S1's hovering accuracy is only one-third that of the F3. It has poor wind resistance. Motor response slows significantly in high-temperature environments. While Xingchen Flight Controller's solution is better than the general solution, it still lags far behind Hongyuan's.

However, Zhang Lei added a sentence at the end of the test report: "The S1's flight control is indeed not good. But the price of 999 will make many people willing to give it a try. And once they buy the S1, they won't buy the F3 in the short term—because they already have a 'flying' machine."

These words left Su Chen silent for a long time.

Zhou Ming and Meng Xiaosui both suggested lowering the price.

"苏总，S1虽然品质差，但999这个价格太有杀伤力了。我们要不要把F3降到1799甚至1499？"

Su Chen shook his head.

"No surrender."

Both of them looked at him.

"Lowering prices won't solve the problem. If we lower our price to 1499, Tianying can drop to 799. If we lower it to 999, Tianying can drop to 699. Because Xingchen Flight Control's solution has a much lower cost than ours—its quality is also much lower, but its cost is indeed lower. This is a price war we can't win."

"Then what should we do?" Meng Xiao asked.

"Let's answer with product differences. The S1 can fly, but it's unstable. The F3 can fly in strong winds, in high temperatures, and even after a crash. These differences can't be bridged by 999. What we need to do isn't lower the price—we need to let customers discover the differences after trying it out."

Su Chen stood up.

"Meng Xiaoyi, starting next week, all ground sales teams will launch a 'free test flight' program. Each potential customer can test fly the F3 for three days free of charge. No deposit is required. If you don't want to buy after three days, you can simply return the money."

Meng Xiaosui thought for a moment.

"Mr. Su, this isn't cheap. Each F3 costs over a thousand yuan. What if it gets lost or breaks down..."

"I've calculated it. Based on the conversion rate of our on-the-ground promotions over the past year, the conversion rate for three days of free test flights will exceed 70%. Because once people use the F3, the difference in performance compared to the S1 will be too significant. And if the F3 has any quality issues during the test flights—we'll replace it free of charge."

"Seventy percent?"

"Yes. Because our customers are workers who use drones to earn a living. Within three days, they'll find that the extra money the F3 earns far exceeds the extra thousand dollars they spent."

Meng Xiaoyi nodded. She knew Su Chen's style—not price wars, but product wars.

张磊在旁边补了一句："苏总，F4的设计方案我已经定稿了。RTK定位、基础避障、自动航线。这三个功能上去之后，F4和S1之间的差距会比F3和S1之间更大。"

"Okay. When will the F4 be mass-produced?"

"End of Q3."

Su Chen nodded.

"Then let's use the free test flights of the F3 to get through this quarter. When the F4 comes out, the gap will be so big that the S1 will be completely unable to compete."