Tech giants start by disassembling systems

Chapter 94 Visit

In early November 2020.

The second-month sales figures for the Falcon S2 Pro were released at the end of January.

Twelve thousand units.

This represents a drop of more than half compared to the 38,000 units sold in the first month.

This figure sparked a debate at an internal meeting of Haotai Capital. Some believed it was due to the holiday factor—consumer electronics naturally fluctuate around New Year's Day. Others thought it was a normal pullback after the initial surge in the first month. But Xia Kanghao knew neither was the case.

He received the figure on the afternoon of February 2nd, and flew directly from Hong Kong to Shenzhen.

Lu Weimin picked him up at Shenzhen Bao'an Airport. The two didn't exchange pleasantries in the car. They went straight to Huaqiangbei.

This was Xia Kanghao's first visit to Huaqiangbei. For the past five years, his research on the drone industry had relied on employee reports and research institution subscriptions. He never personally visited end-users. In his twenty years at Haotai, he believed that end-user data was accurate.

3:30 PM. Huaqiangbei Zhenhua Drone Dream Factory.

This is one of the largest Sany World drone retail clusters in Shenzhen. It covers over 2,000 square meters and has more than 50 booths.

Lu Weimin led Xia Kanghao into one of the shops.

The shop owner was a man in his forties from southern China, surnamed Huang. He had been in the drone retail business for seven years. As soon as they entered the shop, Mr. Huang recognized Lu Weimin, and his expression became somewhat subtle. However, he still warmly invited the two of them to a small reception area in the back room.

"Mr. Huang, Mr. Xia and I are here today not to buy any goods," Lu Weimin said bluntly. "We want to hear the truth from you. How have the S2 Pro sales been these past two months?"

Boss Huang was silent for three seconds.

"Mr. Lu, would you like to hear polite words or the truth?"

"To be honest," Xia Kanghao added, "a little slip-up."

Boss Huang glanced at Lu Weimin. Lu Weimin nodded.

"The first month saw a surge in prices. The second month—their reputation collapsed."

He stood up, walked to the filing cabinet, and pulled out a folder.

"These are the user complaints I've received over the past two months. A total of twenty-four."

He placed the folder on the table.

"Complaints fall into three categories. The first category is inaccurate obstacle avoidance. There are eleven complaints. Users say that the Falcon S2 Pro frequently reports false obstacles when flying in the forest near Relai Peak, causing it to suddenly stop flying or veer off course. The F4 does not have this problem in the same scenario."

Xia Kanghao's finger twitched on the table.

"Category Two – Unable to Upgrade. Six points. F4 users, do you know there's a flight controller firmware update every quarter? Pushed via OTA. This year, the F4 received four updates. Each update either optimized obstacle avoidance or added new features. The S2 Pro – hasn't received a single update in two months since its release. Users asked customer service, and they said the flight controller's underlying system doesn't support continuous iteration."

He paused for a moment.

"Category 3 – Replacement. Seven cases. Buyers of the S2 Pro for less than two months requested a refund and exchange for an F4. The reason was always the same – 'I thought the cheaper one (1500 RMB) would be usable, but it's not in the same league as the F4.'"

The room was quiet. The faint sound of announcements from the exhibition hall outside drifted in.

Xia Kanghao didn't speak. He stared at the folder for a long time.

"Mr. Huang," he finally spoke, "when users upgrade to F4, are they willing to pay an extra 1,500?"

"Ken. Some even added their own extra shipping fees."

Why?

Boss Huang smiled. His smile wasn't a smirk, but rather the complex smile of someone on the front lines of the industry looking at capital.

"Mr. Xia, with drones—users aren't buying a machine. They're buying a product that will grow alongside them over the next two years. When they bought the F4, they knew it would get better every quarter. When they bought the S2 Pro, they realized it would only get this good. Paying an extra 1,500 yuan isn't for hardware—it's for the next two years."

That afternoon, Xia Kanghao and Lu Weimin visited five stores. The store owners' answers were all very similar. The core message was just two words.

Generational change. Reputation.

They're not buying a machine. They're buying the future.

The future cannot be bought with subsidies. It is—self-developed flight control. It is data feedback. It is the underlying capability that can be continuously iterated.

On the way back to the hotel that evening, Xia Kanghao looked out the window. The weather in Shenzhen in early February was already starting to warm up. The oak trees along the coastal boulevard had blossomed ahead of schedule.

Lu Weimin broke the silence.

"Mr. Xia, I suggest we postpone the launch of the next generation of the S2 Pro. We need to reconsider our product line strategy."

Xia Kanghao did not answer immediately.

He didn't say a word for a long time.

"Put it on hold for now. We need to reconsider everything."

"It means—"

"Either you truly commit to investing in developing your own flight control system. Three years. 100 million yuan investment. Or—completely abandon consumer-grade hardware and switch to a service platform. Focus only on operations, channels, and resource integration. Purchase the underlying flight control system services from other companies."

Lu Weimin remained silent. The second option meant that Skyhawk was no longer essentially a drone company.

"I'm returning to Hong Kong tonight. I'll give you a definite answer next Monday."

"good."

Three days later, on February 6th, Haotai Capital held an internal meeting.

Xia Kanghao announced two decisions.

First, development of the next generation of the S2 Pro has ceased. Existing inventory will be sold out.

Second, Tianying Technology has launched a strategic reassessment. The goal is to decide within three months whether to continue focusing on hardware or shift to an agricultural service platform.

After the meeting, Xu Lang's former colleague sent the message to him via encrypted means. Xu Lang forwarded it to Su Chen, adding a note:

"President Su, Xia Kanghao is hesitant. He never hesitated before."