Yifang Digital: Achieve brand through acquisition of overseas core technology

“Our sales last year was 200 million US dollars, and this year at least 300 million US dollars. Yifang has enough strength to capture the opportunities in the digital pen and tablet PC market.” Talking about the company’s development, Yifang Yin Shujun, vice president of digital, is very confident.

Efang has been committed to "upgrading to both ends of the smile curve". Through the acquisition of Israel's Pegasus, they have acquired the core technology of digital pens, and took this opportunity to accelerate technological innovation and accumulation. It has successfully launched its own brands on the two core products of the computer - Nextbook, a Pen and M Vpen.

The Nextbook brand of tablet PCs has been launched in the highly competitive US market since 2010, and has sold a total of one tablet in more than two years. million units. The aPen brand digital pen launched in the US market and the M Vpen brand digital pen launched in the Japanese market have respectively entered mainstream channels such as Walmart, Sears, Kmart in the United States, Bic Camera and Yodobashi Camera in Japan.

Acquisition of core technology

In 2002, Yifang Digital, which was established for just over a year, has already produced U disks for overseas customers. Occupy a 5% share of the global market. But Wang Bin, chairman of the company, is not particularly excited about this achievement. He believes that the immediate prosperity cannot make the company's foundation last forever, because "in the process of selling our products overseas, we found that we were only playing the role of porters. The core technology of mobile storage is in the hands of European and American manufacturers."

Wang Bin often said to the company's management and employees: "Yifang started from manufacturing, and must extend to both ends of the smile curve to become its own brand. With core technologies and these two conditions, an enterprise can go a long way." While setting up Yifang Digital's own R&D team, he began to look for suitable technology and innovation partners around the world.

Once Wang Bin met the founder of Israel's Pegasus at an exhibition in Milan, Italy. After communication, Wang Bin had a strong interest in Pegasus' digital pen, but given the market conditions and overall strength of Yifang Digital at that time, the time for cooperation was not yet ripe. In 2006, Yifang Digital grew into one of the top 100 manufacturing enterprises in Guangdong Province, and its products were sold all over the world. The two sides ushered in the best opportunity for cooperation.

This year, Yifang Digital began to produce and sell digital pen products after obtaining the technology license from Pegasus.

As the consumer electronics industry matures and technologies change rapidly, at the beginning of 2010, after Wang Bin persuaded shareholders and brokerages, Yifang Digital completed the acquisition of Pegasus, thus becoming a global company with nearly 90 core products. A high-tech product manufacturer with invention patents and strong R&D capabilities.

Yin Shujun said that the post-merger integration process is relatively smooth. Yifang and Pegasus have gone through a long-term cooperation process before the merger. The two parties have reached a consensus on key issues such as technology, market, customers and ways of doing things. They are consistent and very pragmatic. Yifang is an enterprising company that seeks to change its genes. It constantly tries to innovate and change itself. The boss thinks about changing the way of doing things all day long. This fits well with the innovative DNA of Israeli companies.

Pegasus' advantage lies in core technology. They are good at charging fees in the form of technology licensing, but they are not good at selling things. Yifang Digital is slightly better in productization ability and tapping customer needs. Yifang Digital discovers customer needs, then becomes a design input, and finally product definition. This process is very fast.

After the merger, Yifang Digital retained only research and development in Israel, and transferred engineering, manufacturing and sales to the Shenzhen head office. Due to the close cooperation between the two places, the efficiency has been greatly improved. "In the past, the research and development cycle of products usually took 9-12 months, but now it is shortened to 3-6 months." Yin Shujun said.

Building its own brand

Launching its own brand in the international market requires strong technical backing. After Yifang Digital acquired Pegasus to obtain the core technology of digital pen, it launched aPen brand digital pen in the United States and M Vpen brand digital pen in Japan based on the core technology, which received positive market response.

Not only that, Yifang Digital also took the acquisition of Pegasus as a good opportunity to vigorously accelerate the innovation and accumulation of technology research and development, as well as the optimization of the research and development system, in order to create more self-contained products in more product categories. There are brands.

The company has implemented a series of changes in innovation system, organizational structure, management model, leadership and team building. They established a unified platform to manage multinational teams, allowing R&D personnel in China and Israel to work together using the time difference, thus greatly accelerating the development of new products. In addition, the former CEO of the Israeli company also moved to Shenzhen to work, which made the communication path between the two sides shorter and more direct, which greatly improved the efficiency of cooperation.

Efang has always put technological innovation at the top of the company's business activities, and invests 3% of its sales revenue into research and development every year. In 2009, the company did not hesitate to spend huge sums of money to set up a MID (tablet computer) R&D center, creating the "first MID team" in the industry. At the beginning of 2010, it acquired the Israeli Pegasus company, which greatly increased its R&D strength.

Take the research and development of Yifang 7-inch tablet PC as an example, firstly, the marketing department conducts detailed market research in the first time through three branches in Japan, the United States and Beijing, grasps the market frontier intelligence, and completes the product definition through the marketing department. Then it is handed over to the Israeli R&D Center for core technology research and technological innovation, and the Shenzhen R&D Center for resource integration and product development, so as to launch new products faster than competitors.

In 2010, when Chairman Wang Bin and Executive Director Hua Shi inspected the US market, they found that the tablet PCs sold in the market were all first-tier brands such as Apple and Samsung, and the market lacked second-tier brands with high cost performance. There are blank spots in the market, and low-cost tablet PCs are exactly the market that Yifang can break through.

As a result, with the support of its technical strength, Yifang created its own brand of tablet PCs, Nextbook, which is priced at less than $200, and quickly opened its doors in the US market with cost-effective products.

On August 28, 2010, in Los Angeles, California, USA, the Nextbook brand of Yifang tablet computer was officially established. On November 5, the first product, Next 2, was launched, and 13,000 units were sold that day. Nextbook has sold 1 million units in North America for more than two years, and has achieved the top five market share in the US market where there are many world-renowned brands. In 2013, Yifang Digital became a long-term supplier of Walmart and entered 4,000 Walmart stores in the United States.

“The Nextbool brand closely follows the design of the market. Solid materials and excellent quality are the advantages of Yifang products.” Wang Bin said.

According to Executive Director Hua Shi, there are three main reasons for the success of the Yifang tablet brand: First, Yifang has a strong R&D team, which ensures that the products have good industrial design and good hardware performance. Second, vertical integration capabilities. Third, strong production and manufacturing capabilities. The chairman of the company, Wang Bin, personally invited senior factory management experts from Taiwan to come to Yifang to help increase production capacity. Last year, Yifang tablet shipments reached 5 million units, and this year it can increase to 6 million units.