Tech giants start by disassembling systems

Chapter 108 Barriers to Low-Altitude Communication

Su Chen sat in his office at the Longhua headquarters, with a technical evaluation report compiled by Wu Zheng spread out on the table.

The report cover only had five words printed on it: "H-Link Preliminary Research Project".

A full week has passed since DJI released FlightCore, and the drone industry is buzzing about it. But Su Chen's attention isn't entirely on DJI right now, because while reviewing H-Link's technical roadmap, he's encountered a wall even more difficult to navigate than DJI's.

Low-altitude data communication link standard.

In the industry, it is commonly referred to as LDCL.

This is a mandatory communication standard for commercial drones officially issued by the Ministry of Industry and Information Technology and the Civil Aviation Administration of China at the end of 2019. According to the regulations, all drones performing commercial flight missions in China must have a data link between their ground station and the aircraft that is compatible with the LDCL protocol; otherwise, they will not pass airworthiness review, let alone obtain a commercial flight permit.

All the core patents of the LDCL standard are held by a company called "Hangxindatong Technology".

This company sounds impressive, but it's actually just a university-run company of the Northern University of Aeronautics and Astronautics. Back then, several professors from the university and their research groups developed a prototype of the LDCL protocol. The university then funded the establishment of Hangxindatong, which was specifically responsible for the commercial promotion and patent operation of the standard.

Theoretically speaking, this should have been a good thing.

The official recognition of China's domestically developed low-altitude communication standard means that the entire drone industry finally has a unified communication standard, eliminating the need for each industry to develop its own proprietary protocols. For Su Chen, if the licensing fee for the LDCL standard is reasonable, Hongyuan can integrate this protocol into the Feiniao platform and then develop H-Link based on it.

But the problem lies precisely in the word "reasonable".

Wu Zheng devoted three full pages to describing Hangxindatong's authorization conditions in his report, and Su Chen frowned more and more as he read it.

LDCL protocol stack licensing for a single product line: The basic licensing fee starts at 3000 million RMB, and an additional 12% of the ex-factory price of the communication module will be charged as a patent licensing fee for each subsequent device.

To obtain source code-level modification rights to the protocol stack—that is, the underlying access capabilities necessary for Su Chen to develop H-Link—the cost would double, starting at 6000 million, plus a 15% license fee per device.

"Are these people crazy?"

Su Chen slammed the report on the table, his brow furrowed in disbelief.

12%到15%的许可费是什幺概念？飞鸟模组的三个版本售价分别是499、699和999元，通信模块在整机BOM中的成本占比大约在18%左右。也就是说，光是LDCL的专利费就要吃掉通信模块成本的将近七成！

This isn't doing business, this is robbery!

Su Chen took a deep breath, pushed the chair back, and got up to walk to the window.

The skyline of Longhua Industrial Zone was hazy and gray, with several test drones circling above Hongyuan's test flight field in the distance. The communication links used by those drones were all proprietary protocols developed by Hongyuan, and they had no problems at all during test flights and internal testing.

However, once it is to enter the commercial market, it must pass the LDCL hurdle.

This is the source of Hangxinda's confidence to ask for exorbitant prices—you may not use my products, but you can forget about selling them.

Su Chen turned around, picked up his phone, and dialed Wu Zheng's number.

"Old Wu, I've seen the report. Which company in the entire industry has accepted Hangxindatong's licensing fee?"

On the other end of the phone, Wu Zheng's voice carried a hint of helplessness: "President Su, I've done a thorough investigation. More than six months have passed since the LDCL standard was announced, and Hangxindatong has issued basic production licenses to only 16 companies. But none of these 16 companies have actually integrated the LDCL protocol stack into their mass-produced products."

Not a single one?

"Not a single one." Wu Zheng's tone was firm. "The reason is simple: the fees are outrageous. After obtaining the licenses, those 16 companies did the math and found that with LDCL's patent fees, there was no profit margin at all. So they all shelved it; not a single one actually did any integration development."

Su Chen closed his eyes, his temples throbbing.

This was remarkably similar to a piece of information stored in the system's database in his mind—in his previous life, there was an organization that held key standard patents, but due to greed and arrogance, it delayed the implementation of a technology that should have benefited the entire industry for several years.

History always repeats itself in different areas.

"What about DJI? What solution does DJI use?" Su Chen pressed.

"DJI's FlightCore currently uses their own OcuSync protocol, which, strictly speaking, isn't fully compatible with LDCL. However, DJI is a large company with strong connections, so it's currently in a gray area of ​​'flying while being reviewed.' But in the long run, DJI will eventually have to resolve the LDCL compliance issue."

Su Chen remained silent for a few seconds, then let out a cold laugh.

"Even DJI ignores them, and these academics think they have the world in their hands?"

"That's roughly the gist of it." Wu Zheng paused. "The management of Hangxindatong is basically composed of professors and administrative staff from Beihang University's School of Electronic Science and Technology, with no industry experience whatsoever. They think that since they hold the national standard, all companies will eventually have to come to them for help. So they're not in a hurry at all, and they're unwilling to lower their prices."

"Not in a hurry?" Su Chen's voice turned cold. "More than six months after the standards were issued, not a single one of the 16 authorized companies has produced a product. Don't they realize there's a problem?"

"From what I understand, the internal explanation at Hangxindatong is that 'the market still needs a nurturing period.' They believe that as policies tighten, companies will eventually come to them to pay upfront."

Su Chen almost burst out laughing at those words.

Market cultivation period?

They haven't even sown the seeds, yet they expect crops to grow? How do these people's brains work?

They hold the national standard patents, and what they should have done first was to build the ecosystem—lower the licensing threshold, attract chip manufacturers and module manufacturers to integrate LDCL into their products, and make this standard truly circulate in the market. Only after LDCL-based devices have become widespread can they gradually collect patent fees; that's a long-term, sustainable approach.

But Hangxindatong is something else. As soon as the standards were set, it wanted to treat all companies as ATMs, trying to eat the whole cake as soon as it opened its mouth.

And what happened? The cake didn't bake, and they ended up spilling flour all over the floor.

"These guys are terrible teammates," Su Chen muttered under his breath.

He was genuinely angry.

It's not just that Hangxindatong is blocking Hongyuan's path, but also that this behavior is harming the development of the entire domestic drone communication industry. They finally managed to develop a domestic communication standard, only to have it turned into an industry joke by a group of academic managers who only know how to write papers but not how to do marketing.

Foreign drone manufacturers are probably secretly delighted by this situation—they can't even use China's own standards, so they can just continue using their own protocols.

"Old Wu, where is Hangxindatong's headquarters?" Su Chen suddenly asked.

"Chengdu. Their registered address and office are both in Chengdu High-tech Zone, right next to the Chengdu Research Institute of Electronic Engineering of Beihang University."

"Make arrangements for me. I'll fly to Chengdu tomorrow and talk to them in person."

There was a two-second silence on the other end of the phone.

"Mr. Su, are you sure you want to go in person? Our business team contacted them before, and their attitude was very... how should I put it, very condescending."

"That's precisely why we need to go in person." Su Chen's tone hardened. "I don't believe these people are completely unreasonable. If we can reach a reasonable price, it'll be good for both sides. If we can't—"

He didn't say the second half of his sentence, but Wu Zheng sensed the sharpness in his unspoken meaning.

"Okay, I'll arrange it right away," Wu Zheng replied readily.

After hanging up the phone, Su Chen paced back and forth in his office a few times, then sat back down in his chair, opened his laptop, and began to access all the stored information on low-altitude communication technology in the system's database.

The virtual disassembly laboratory slowly unfolded in his mind.

In that space comprised of data streams, a complete communication protocol architecture diagram floated in mid-air. It was a technology roadmap that Su Chen had derived earlier after having the system analyze DJI OcuSync and Qualcomm's drone communication solutions.

Two key technologies were marked by the system as "high-priority breakthrough directions"—

Adaptive channel management technology enables drones to automatically switch to the optimal communication frequency band in complex electromagnetic environments, ensuring the stability of the data link.

Air-to-ground collaborative networking technology enables a distributed communication network between multiple drones and ground stations, significantly improving communication coverage and anti-interference capabilities.

If these two technologies are mastered, Hongyuan will be fully capable of building its own low-altitude communication protocol—a protocol whose performance far surpasses that of LDCL.

Of course, this is on the premise that Hongyuan's products still need to be compatible with the LDCL standard in the market, since that is a mandatory national standard requirement. But compatibility is one thing, but which protocol is actually used in actual use is another matter entirely.

Just like when you buy a mobile phone, the system may have several communication protocols installed, but you will always use the one with the best signal and the fastest speed on a daily basis.

Su Chen stared at the labels of the two technologies for a long time, and a cold glint gradually appeared in his eyes.

If Hangxindatong doesn't know what's good for them, then he won't be polite.

……

The following morning, June 3, 2020.

Su Chen took Zhou Ming from Shenzhen to Chengdu Shuangliu Airport, and then drove straight to the High-tech Zone.

Hangxindatong's office is located in an ordinary office building in a science and technology park. Su Chen looked up at the building sign and found that Hangxindatong only occupied half of the sixth floor.

The corridor was dimly lit, and the grout between the floor tiles was covered with years of accumulated grime.

Su Chen and Zhou Ming exchanged a glance, their expressions somewhat subtle.

Is this the company that holds a complete set of core patents for national-level communication standards?

Judging from this office environment, it's probably not even as nice as the cafeteria at Hongyuan Longhua headquarters.

Su Chen shook his head inwardly. It's not shameful to be poor, but the real frustrating thing is that instead of raising prices and scaring away all potential partners, they can improve their situation by setting reasonable prices to encourage the entire industry to adopt their own standards and by collecting patent fees on a large scale.

It's like you opened a restaurant, and the food is actually pretty good, but you set the price at two thousand per person right away, and as a result, the restaurant is deserted, with not a single customer. Then you think it's because the customers don't know what's good.

"Mr. Su!"

A middle-aged man wearing gold-rimmed glasses strode quickly from the end of the corridor, his face beaming with an excessively enthusiastic smile.

"Welcome, welcome! I've heard so much about you! I'm He Zhiqiang, General Manager of Hangxindatong. It's a great honor to meet Mr. Su in person today!"

Su Chen extended his hand expressionlessly and shook hands briefly with the other person.

"President He."

His tone was as bland as plain water.

He Zhiqiang was not affected by Su Chen's coldness at all; on the contrary, he smiled even more brightly.

Su Chen knew exactly what the other party was thinking. Hongyuan Intelligent was currently valued at over 300 million yuan, and its Feiniao platform had signed more than 300 clients in just one month after its launch, making it a hot star company in the drone industry.

In Hangxindatong's eyes, Hongyuan was a fat sheep.

More importantly, Hongyuan's business team had previously contacted Hangxindatong and offered an 800 million yuan licensing fee, but Hangxindatong rejected it without hesitation.

He Zhiqiang refused decisively at the time because he knew that Hongyuan was developing H-Link, and the underlying layer of H-Link had to be compatible with the LDCL standard. In other words, Hongyuan needed the LDCL license more than any other company.

So he's waiting.

Waiting for Su Chen to come in person.

Once Su Chen reaches the negotiating table, he'll be able to take a big bite.

Su Chen glanced at the smugness on He Zhiqiang's face, which he tried to hide but couldn't, and sneered inwardly.

Just as Wu Zheng had said, it was a commanding view.

"Mr. Su, we've made a reservation at the restaurant downstairs, shall we—"

"No need," Su Chen waved his hand. "Let's get down to business."

He Zhiqiang paused for a moment, then smiled and nodded: "Alright, alright, Mr. Su is indeed decisive. Let's go to the conference room."

The group walked through a narrow corridor and entered a small conference room.

Several bottles of mineral water and an unopened package of tea were on the table.

After Su Chen sat down, his gaze calmly swept over He Zhiqiang across from him and the two middle-aged men beside him who were clearly from technical backgrounds.

"Mr. He, my purpose in coming here today is very clear," Su Chen said bluntly. "Hongyuan needs access authorization for the LDCL standard's underlying protocol stack for the development of our H-Link communication system. Our business team previously discussed the terms with you, but we couldn't reach an agreement. So I've come in person, hoping to find a solution acceptable to both parties."

He Zhiqiang slowly took a sip of his tea, then looked at Su Chen with a smile.

"Mr. Su's personal visit demonstrates your high regard for LDCL. To be honest, we at Hangxindatong have also been paying close attention to Hongyuan, especially your Feiniao platform, which is performing exceptionally well."

"Thank you." Su Chen wasn't interested in pleasantries. "Let's get straight to the price."

"Okay." He Zhiqiang put down his teacup, crossed his hands on the table, and looked calm.

He first sighed slowly, "Mr. Su should also know that we spent nearly six years developing the LDCL protocol stack, investing a lot of research resources and manpower. To put it bluntly, this is the culmination of the hard work of several generations of communication teams at Beihang University..."

Su Chen did not interrupt him, but his brows furrowed slightly.

complain.

As expected, it started with complaining.

He'd seen this trick too many times. First, exaggerate your own efforts to the highest level, then throw out an exorbitant price, making the other party feel that "it's expensive because it's worth it."

Whether it's worth it or not is determined by the market, not by your opinion.

"So?" Su Chen interrupted directly, "What is your offer?"