Sat - May 7, 2005
The Advertising Agencies Still Don't Get It
The Sniper's
Hide
In the Hutong
2240 hours
In the Hutong
2240 hours
Trying really hard to look like they're working
on this deductible junket, 379 advertising execs at a conference in Bermuda told each other how
worried they are about the way the advertising business
works.
There was a lot of talk about how to fix the advertising business, but apparently nobody had the cojones to come right out and ask the big question (is advertising doomed?), much less give the right answer (yes) and begin talking about what would take its place.
Hint 1: Stop having these stupid conferences. If you take 379 attendees, multiply by around $6k apiece ($1,700 to attend, 5 nights hotel at an average of $320 a night, airfare, food, entertainment, etc.) and figure $1500 a day in lost work time. Call it an even $4 million that it cost the industry, or commissions on $23 million in billings.
Hint 2: The industry is in love with creativity. Get over it. It's about results, guys, now winning awards for the cleverest or best-looking ads
There was a lot of talk about how to fix the advertising business, but apparently nobody had the cojones to come right out and ask the big question (is advertising doomed?), much less give the right answer (yes) and begin talking about what would take its place.
Hint 1: Stop having these stupid conferences. If you take 379 attendees, multiply by around $6k apiece ($1,700 to attend, 5 nights hotel at an average of $320 a night, airfare, food, entertainment, etc.) and figure $1500 a day in lost work time. Call it an even $4 million that it cost the industry, or commissions on $23 million in billings.
Hint 2: The industry is in love with creativity. Get over it. It's about results, guys, now winning awards for the cleverest or best-looking ads
Posted at 10:56 PM
Attention Journalists: Please Don't Ask Any Questions, Just Write Down What Executives Tell You
The Bunker in the
Hutong
2141 hrs
2141 hrs
The San Francisco
Chronicle, once again earning its sobriquet of
"Pravda-by-the-Bay," published an article on tomorrow's Hua Yuan Science
and Technology Conference in Santa Clara. As a part of that interview, it
published two quotes that a little healthy journalistic skepticism might have
questioned, and turned into a better
story.
First, the reporter, Vern Kopytoff, couldn't even bother to get the name of the organization right (he spelled it "Hua Yan." Hello? Fact check? As an aside, he also missed the point that Hua Yuan is a modern-day equivalent of a Chinese self-help association that taps U.S. companies with lots of money and big China aspirations for support. Dig a bit there, boy. There's an interesting story here...Is this organization legit and above board, or is there something Masonic happening here?
Second, Mr. Kopytoff dutifully took down every word when Fang Deng, the VP for Strategy of Juniper Networks, regurgitated the standard party-line that:
U.S. firms expanding Into China can't expect immediate success. Rather, it could take a U.S. firm years to turn a profit after learning the Chinese way of doing business.
With respect, wrong on two counts.
Companies don't have to spend years to build a business in China. If they hire smart people and get professional advice they can accomplish a lot it a little time. It's the ones that assume they need to lose money and be stupid for 3-5 years that never seem to get their business in China off the ground. Your average well researched, well-thought out business plan that incorporates the kind of savvy a company SHOULD have before investing a nickel in China should be cash-flow positive within 18 months.
That does NOT mean that there is some special Chinese way of doing business. Now, the locals will try to convince you of that - they've been singing that tune for over a century, and to a culture-shocked executive from San Jose or Dayton, that sounds reasonable. It's also the first step toward disarming you and then taking you for all you've got.
Any U.S. executive (and I count Mr. Deng as one, despite his surname) who tries to convince you otherwise either a) buys into that because he's trying to justify his company's own crappy performance in China, or b) is being disingenuous and saying that in the hopes that his competitors are listening and won't try to come into China. Given Juniper's more than satisfactory performance in China, I would vote for him spreading disinformation.
I don't blame Mr. Kopytoff for that oversight. I blame the Chronicle for sending a reporter who clearly does not have enough knowledge about China to write a decent story. Which of cours assumes the Chronicle even has a reporter who understands that there are differences between Stockton St. and Jianguomenwai Avenue.
It gets worse.
Then we have Charles Zhang, CEO of Sohu.com, who proceeds to dis U.S. Internet firms in China, suggesting they're not doing quite well. One would think that the reporter would hear a voice in his head saying "hmm, but this is a guy talking about his competition. Of COURSE he's going to say that."
No evidence of healthy, journalistic skepticism.
No wonder more people are turning to blogs for information and ignoring traditional media.
First, the reporter, Vern Kopytoff, couldn't even bother to get the name of the organization right (he spelled it "Hua Yan." Hello? Fact check? As an aside, he also missed the point that Hua Yuan is a modern-day equivalent of a Chinese self-help association that taps U.S. companies with lots of money and big China aspirations for support. Dig a bit there, boy. There's an interesting story here...Is this organization legit and above board, or is there something Masonic happening here?
Second, Mr. Kopytoff dutifully took down every word when Fang Deng, the VP for Strategy of Juniper Networks, regurgitated the standard party-line that:
U.S. firms expanding Into China can't expect immediate success. Rather, it could take a U.S. firm years to turn a profit after learning the Chinese way of doing business.
With respect, wrong on two counts.
Companies don't have to spend years to build a business in China. If they hire smart people and get professional advice they can accomplish a lot it a little time. It's the ones that assume they need to lose money and be stupid for 3-5 years that never seem to get their business in China off the ground. Your average well researched, well-thought out business plan that incorporates the kind of savvy a company SHOULD have before investing a nickel in China should be cash-flow positive within 18 months.
That does NOT mean that there is some special Chinese way of doing business. Now, the locals will try to convince you of that - they've been singing that tune for over a century, and to a culture-shocked executive from San Jose or Dayton, that sounds reasonable. It's also the first step toward disarming you and then taking you for all you've got.
Any U.S. executive (and I count Mr. Deng as one, despite his surname) who tries to convince you otherwise either a) buys into that because he's trying to justify his company's own crappy performance in China, or b) is being disingenuous and saying that in the hopes that his competitors are listening and won't try to come into China. Given Juniper's more than satisfactory performance in China, I would vote for him spreading disinformation.
I don't blame Mr. Kopytoff for that oversight. I blame the Chronicle for sending a reporter who clearly does not have enough knowledge about China to write a decent story. Which of cours assumes the Chronicle even has a reporter who understands that there are differences between Stockton St. and Jianguomenwai Avenue.
It gets worse.
Then we have Charles Zhang, CEO of Sohu.com, who proceeds to dis U.S. Internet firms in China, suggesting they're not doing quite well. One would think that the reporter would hear a voice in his head saying "hmm, but this is a guy talking about his competition. Of COURSE he's going to say that."
No evidence of healthy, journalistic skepticism.
No wonder more people are turning to blogs for information and ignoring traditional media.
Posted at 10:10 PM
Mon - April 11, 2005
Ads in Videogames - Making Pirates Pay
The Silicon Hutong
Suite
Intercontinental Hotel
Singapore
2325 Hours
Intercontinental Hotel
Singapore
2325 Hours
Massive, an advertising company that focuses on
ad and product placement in videogames, is now off the ground in New York with high hopes and
some skepticism from the folks at Electronic
Arts
If I were to really get into gamer mode on this, I would say "put advertising in my games? Give me games for free."
But if I were to get into business mode, I would say that this might finally, somehow, hold the key to getting paid for all of those pirated copies out there.
If only they could figure out some way to do realtime measurement.
If I were to really get into gamer mode on this, I would say "put advertising in my games? Give me games for free."
But if I were to get into business mode, I would say that this might finally, somehow, hold the key to getting paid for all of those pirated copies out there.
If only they could figure out some way to do realtime measurement.
Posted at 11:57 PM
Microsoft Shifting to a Service-driven Model?
The Silicon Hutong
Suite
Intercontinental Hotel
Singapore
2250 hrs
Intercontinental Hotel
Singapore
2250 hrs
In an article in the Seattle Times, Brier Dudley
interviewed Martin Taylor, leader of Microsoft's 18-man A-Team that spends their
days publicly spreading Redmond's own brand of disinfo and counter-disinfo
against The Penguin and his legions of Linux fans.
Taylor's a very well-spoken guy and makes some remarks that you will either find convincing, bogus, or slightly credible depending on where you stand on Linux.
But it's what he said at the end of the article that was interesting. Now remember, this is a guy who sits at Steve "Monkeyboy" Ballmer's right hand.
"My belief is that open-source software is going to help drive the acquisition cost of software down toward zero" he [Taylor] said, a shift that will require software companies to move "over to a maintenance and support model."
You can see this a couple of ways. First, you can see it as a trial balloon being floated by Microsoft about a movement toward a service model. Personally, given what Taylor does for a living, I'm much more inclined to file this under more disinfo. Microsoft still sees Linux as a bugfart in a typhoon, and there is no way it is going to readily hand over it's massive margins willingly - certainly not on the desktop.
I think what we CAN expect is for Microsoft to start limiting all but highly limited tech support for paid software to those who buy maintenance agreements - say, after 90 days. Hmm. Nice new income stream. And I'm sure that much of that service would be handled not from Redmond, Washington or Lexington, Kentucky, but from Bangalore and Manila.
I can hear the Wipro guys drooling already.
Taylor's a very well-spoken guy and makes some remarks that you will either find convincing, bogus, or slightly credible depending on where you stand on Linux.
But it's what he said at the end of the article that was interesting. Now remember, this is a guy who sits at Steve "Monkeyboy" Ballmer's right hand.
"My belief is that open-source software is going to help drive the acquisition cost of software down toward zero" he [Taylor] said, a shift that will require software companies to move "over to a maintenance and support model."
You can see this a couple of ways. First, you can see it as a trial balloon being floated by Microsoft about a movement toward a service model. Personally, given what Taylor does for a living, I'm much more inclined to file this under more disinfo. Microsoft still sees Linux as a bugfart in a typhoon, and there is no way it is going to readily hand over it's massive margins willingly - certainly not on the desktop.
I think what we CAN expect is for Microsoft to start limiting all but highly limited tech support for paid software to those who buy maintenance agreements - say, after 90 days. Hmm. Nice new income stream. And I'm sure that much of that service would be handled not from Redmond, Washington or Lexington, Kentucky, but from Bangalore and Manila.
I can hear the Wipro guys drooling already.
Posted at 11:24 PM
Tue - March 29, 2005
BCG - Wharton Report: A Worthy Read
Perched 9 Floors Above the
Hutong
1320 hrs
1320 hrs
I have hardly in the past to nail the folks at
Wharton when I felt they were wrong about issues in China, so in all fairness I
need to compliment them when they get something right.
The recent report by the Boston Consulting Group and Knowledge@Wharton on Overcoming Challenges in China Operations has come up with some very poignant conclusions that are worth reviewing in detail. While it pussyfoots around some critical issues in the name of political correctness (they stopped just short of saying that most Chinese managers aren't ready to take the top local job in MNCs, as an example) and there are some notable omissions, they come up with a set of of "uniquely China" observations about MNCs who have succeeded in China.
It's hard to argue with things like:
1. Giving China high visibility at headquarters;
2. Personal CEO involvement and regular visits by the CEO to China;
3. Clear, bold targets;
4. Give China a high priority regardless of what it would be assigned under normal internal systems;
5. Create China-specific products;
6. Bring the entire value chain to China, including R&D;
7. Nurture managers for the long term;
8. Emphasize government relations and public relations;
9. The China operation is given a genuine "value-added" role in the organization; and
10. Make China a global or regional center for key responsibilities.
Clearly, these alone won't make an MNC successful in China, but they're a good start.
The recent report by the Boston Consulting Group and Knowledge@Wharton on Overcoming Challenges in China Operations has come up with some very poignant conclusions that are worth reviewing in detail. While it pussyfoots around some critical issues in the name of political correctness (they stopped just short of saying that most Chinese managers aren't ready to take the top local job in MNCs, as an example) and there are some notable omissions, they come up with a set of of "uniquely China" observations about MNCs who have succeeded in China.
It's hard to argue with things like:
1. Giving China high visibility at headquarters;
2. Personal CEO involvement and regular visits by the CEO to China;
3. Clear, bold targets;
4. Give China a high priority regardless of what it would be assigned under normal internal systems;
5. Create China-specific products;
6. Bring the entire value chain to China, including R&D;
7. Nurture managers for the long term;
8. Emphasize government relations and public relations;
9. The China operation is given a genuine "value-added" role in the organization; and
10. Make China a global or regional center for key responsibilities.
Clearly, these alone won't make an MNC successful in China, but they're a good start.
Posted at 01:51 PM
Why Isn't China Teaching Integrity, Part I
9 Floors Above the
Hutong
China World Tower 2
1233 hrs
China World Tower 2
1233 hrs
I wish to hell more companies in China would
publicly eject dishonest employees. More stories like this one running here might have an
impact.
"I lied to my previous employer and falsified company documents while making lots of money for them and myself. Then I wrote a book about it. What's wrong with that?"
"Uh, you're a self-confessed dishonest guy who has no integrity and has committed acts that under the laws of the land could be considered criminal. Hit the road."
Damn, I wish there was more of that here...
Attention all employers in China! If they cannot define "integrity" when you interview them, DON'T HIRE THEM.
If they behave with a lack of integrity, FIRE them.
Build it into company policies. Use YOUR definition of proper behavior and clear it with local counsel. Then enforce it.
"I lied to my previous employer and falsified company documents while making lots of money for them and myself. Then I wrote a book about it. What's wrong with that?"
"Uh, you're a self-confessed dishonest guy who has no integrity and has committed acts that under the laws of the land could be considered criminal. Hit the road."
Damn, I wish there was more of that here...
Attention all employers in China! If they cannot define "integrity" when you interview them, DON'T HIRE THEM.
If they behave with a lack of integrity, FIRE them.
Build it into company policies. Use YOUR definition of proper behavior and clear it with local counsel. Then enforce it.
Posted at 12:50 PM
Signs
Somewhere on the Third Ring
Road
Beijing
0725 hrs
Beijing
0725 hrs
Looking to be another long day. Possibly some
interesting news later. I'm a half-hour early for my first appointment of the
day, and the skies are clear if hazy above Beijing. There is promise in the
air.
Great iPod shuffle billboard along 3rd Ring near the Zhaolong hotel. ¥990 is a bit more expensive than the $99 the thing goes for in the states, but it's brilliant. In a country where there price is a mostly subjective thing, simply smacking a price on a billboard is a bold statement. Go Apple.
Huge double-decker bus ads for 7-Eleven, stores which are just starting to pop up in China. Why does China need more convenience retail? It doesn't. It needs more cost-effective convenience retail, and 7-Eleven's inventory and supply-chain management technology are what is going to revolutionize small retail here. It will become increasingly difficult in China to run a retail operation with an abacus and a cash box.
Great iPod shuffle billboard along 3rd Ring near the Zhaolong hotel. ¥990 is a bit more expensive than the $99 the thing goes for in the states, but it's brilliant. In a country where there price is a mostly subjective thing, simply smacking a price on a billboard is a bold statement. Go Apple.
Huge double-decker bus ads for 7-Eleven, stores which are just starting to pop up in China. Why does China need more convenience retail? It doesn't. It needs more cost-effective convenience retail, and 7-Eleven's inventory and supply-chain management technology are what is going to revolutionize small retail here. It will become increasingly difficult in China to run a retail operation with an abacus and a cash box.
Posted at 07:34 AM
Bluetooth's China GIveaway - There's Gotta Be More To It
In The
Hutong
2324 hrs
2324 hrs
Check this out on Chinatechnews.com.
Posted at 12:14 AM
Mon - March 28, 2005
In China, Be Human
Somewhere on the Airport
Expressway
Beijing
2149 hrs
Beijing
2149 hrs
Heading home after an exceptionally long day
(global CEO in town) passing a 1/4 ton truck half filled with leaves and five
guys with dirty orange coveralls crapped out on top of the pile humming along at
120 kilometers an hour, I am reminded once again that for all of the advancement
in this country, human life remains an exceptionally cheap
commodity.
To an economist that's not surprising: in a country with 1.3 billion people, human life is plentiful, and thus inexpensive. The marginal value of each individual is to the state and its economy is, depending on which expert you ask, not only tiny, but indeed perhaps negative. China has too many people, we are told. Take this logic an extra step, and the question then becomes "so, how do we shave a few hundred million off of the total."
A repugnant thought to anyone raised in a tradition that teaches that the value of an individual life is equal to the value of the entire world.
Okay. So say it's "culture." Say that China is different from the West. Accept it. Deal with it.
You start making compromises with your humanity like that, and sure as hell, you will find yourself justifying injustice all day long in China.
The challenge is to sustain and constructively channel that just outrage without allowing it to consume you, to neither apologize for this place nor to hurl yourself bodily against the system in protest, but to find a way to create change a little bit a day.
I smile a lot. I salute the guards back when they salute me. I tip. I say thank you. It's not much, but dammit, if more people would do it, I guarantee you this would be a lot nicer place to live and work.
To an economist that's not surprising: in a country with 1.3 billion people, human life is plentiful, and thus inexpensive. The marginal value of each individual is to the state and its economy is, depending on which expert you ask, not only tiny, but indeed perhaps negative. China has too many people, we are told. Take this logic an extra step, and the question then becomes "so, how do we shave a few hundred million off of the total."
A repugnant thought to anyone raised in a tradition that teaches that the value of an individual life is equal to the value of the entire world.
Okay. So say it's "culture." Say that China is different from the West. Accept it. Deal with it.
You start making compromises with your humanity like that, and sure as hell, you will find yourself justifying injustice all day long in China.
The challenge is to sustain and constructively channel that just outrage without allowing it to consume you, to neither apologize for this place nor to hurl yourself bodily against the system in protest, but to find a way to create change a little bit a day.
I smile a lot. I salute the guards back when they salute me. I tip. I say thank you. It's not much, but dammit, if more people would do it, I guarantee you this would be a lot nicer place to live and work.
Posted at 10:05 PM
Sun - March 20, 2005
Site of the Week - Microsuck
Headquarters
Silicon
Hutong
Beijing
Those of you not terribly enamored with Bill
Gates and the Legion of Hate, check out the Microsoft
Eradication Society, a great site focused on resources to help you
expunge Macrohard from your life.
Posted at 09:25 PM
Video Game Wars: How Long Before the Chinese Catch Up
Headquarters
Silicon
Hutong
Beijing
So the United States Air Force wants to take a big step toward retiring the $2
million pilots flying $100 million jets, replacing them with smart kids sitting
in air conditioned trailers outside of Las Vegas flying $4 million recon drones.
The pilot of the future is the video
gamer of today. Technology changing air
combat.
Now, how long before the PLA figures out they can stop buying Su-27s and Su-30s from the Russians at $34
million a pop, then deal with spares, then deal with the headaches they're
having integrating them into the force, and start buying projectable power on
the cheap?
Posted at 09:11 PM
Spooky Moment
Hangover Recovery
Unit
Silicon Hutong
Clinic
Beijing
Watching
The Devil's
Own on HBO Asia. There's
this one spooky moment when the Irish terrorist arrives in New York, and his
U.S. sympathizer is driving him over the Brooklyn Bridge. He looks at the World
Trade Center towers and says "and there it is."
Hair rises on back of
neck.
Posted at 08:50 PM
Irish Ball
Hangover Recovery
Unit
Silicon Hutong
Clinic
Beijing
Irish Ball in Beijing last night, Sunny and I
there courtesy of Cyril and the gang at I.T.
United. Still getting over it, but a good time had by all. Cyril is
one of those guys who is plugged into a whole lot of fascinating people, and we
shared the table with some deeply fascinating people. And anyway, any table with
senior executives from Airbus, BMW,
Panalpina, and the Beijing city
government can't help but be really
interesting.
One of the wonderful
things about living in Beijing - ball season. Ran into a bunch of people I
haven't seen in a while, including Greg from Sun. Sun is up for taking a chunk
of the open source war over here, and Greg is leading the charge with regional
governments in Northeast Asia. That's a tough battle, given that the Asianux folks have a long lead and have
something of a home court advantage.
Posted at 08:41 PM
Thu - March 17, 2005
Bluetooth: Not Dead Yet, but Not Looking Good
Command
Center
Silicon Hutong
Plaza
Beijing
Among the avalanche of information pouring out of
CTIA 2005 comes this piece in Engadget that suggests Bluetooth is
blossoming.
Respects to Ross
Rubin, who I think is a very switched-on and entertaining writer, this comes
across as a badly disguised piece of sponsored PR dreck from the heart of the
Bluetooth SIG. The entry is long on declaration ("CTIA made a convincing case
that this is Bluetooth's moment to shine") and very short on supporting
evidence. Wow - half a dozen high-end phones have Bluetooth, there are some
Bluetooth enabled GPS devices, a couple of peripherals, and an MIT-designed
Bluetooth stuffed animal.
WIth respect,
this is the sort of uptake and support that befits a new technology, not one
that's been around for several years. Ross makes the point in the article that
Bluetooth is hardly ubiquitous, and he's right. It may not be a novelty, but if
it isn't ubiquitous now, it never will be. There are a lot of little reasons for
this, but to me, there are really only three that
matter:
1.
Muddled
Positioning: The industry is still
operating under the misconception that Bluetooth would act as what Ross calls an
"Internet Gateway" for personal area networks. I'm sorry - isn't that what WiFi
does? My understanding of Bluetooth was that it would replace the serial cable,
IRdA, and other hookups between devices, accessories, and peripherals, NOT
create an Internet hookup. If the industry hasn't figured out the positioning of
the Bluetooth relative to the other technologies out there, how are users to
understand how to use it?
2.
Unclear
Value: Following on from the positioning
problem, neither the Bluetooth SIG nor the industry has made sufficiently clear
the advantages of using Bluetooth to your average. What IS a personal area
network, and how does making it wireless make my life better. By failing to
communicate the basic, simple advantages of eliminating half of the cords in
ones laptop bag or on ones desktop, the SIG and manufacturers have insured that
mainstream users cannot but fail to get it, and visionaries - who understand the
value of the technology - think that because it's not being pushed, maybe the
technology doesn't live up to its promise.
3.
Impending
Obsolescence: The standards groups around
what has been called Ultra Wideband (UWB) and is now being called Wireless USB
are just coalescing, and we are certainly some ways away from real product. But
the positioning - starting with the new name - has begun in earnest, and the
advantages are clear - eliminate your USB wires. Period. Awesome. Fast. Cool.
I'm there. And thanks very much, Bluetooth, but I'm
waiting.
Nowhere are these failures
more a pity than in Asia, where consumers have proven willing to experiment with
these kinds of technologies and implement them into their lifestyles, and where
the mobile phone plays a role far greater than anywhere else in the
world.
Ericsson did a great thing
creating Bluetooth, and it has given a lot of us a chance to tinker and play
with he idea of unplugging cables. Unfortunately, it's really clear that
Bluetooth has fallen into Gordon Moore's chasm and will eventually land in the
Graveyard of Technologies with Unrealized Potential.
Posted at 12:42 PM
Wed - March 16, 2005
CEO Dead Pool - Which CEO is the next to get the boot?
Silicon Hutong
Plaza
Beijing
Adelphia, AIG, Boeing, Disney, Enron,
Hewlett-Packard, Riggs Bank, Sony, Tyco, WorldCom - the list of companies
shedding their CEOs continues to
grow.
Who's
next?
Send your entries to
siliconhutong@mac.com.
Posted at 03:54 PM
Wed - March 9, 2005
Nokia: Dis N-Gage
In the Hutong after a Long
Day
The capacity for institutional self-deception
powered by hubris grows in direct proportion to your greatest accomplishments.
It is for that reason, perhaps, that
just under a year and a half after the introduction of the Finnish Taco Game
Phone, better known as the N-Gage, Nokia is still telling itself the thing can be
saved. Despite lousy sales, a lack of titles, and just plain stupid
features, NokNok still thinks its a good idea. The Espooians are about to spend
a chunk of their shareholders' money redesigning the ugly beast (2 years too
late).
Which means they'll probably
get a whole bunch of guys who spend their lives commuting from one end of Espoo
to another to sit inside a glass room and brainstorm what it should look like,
what it should do, etc.
I hope Nokia
has learned a few lessons. Lessons like, well, getting feedback from the rest of
the world - end users, hardcore gamers, game designers, retailers, and a whole
lot of people who would love to provide Nokia with
feedback.
Finally, I hope Nokia has
started to learn that it cannot possibly hope to do everything, from design, to
components, to manufacturing, to marketing, to software, to services and hope to
succeed. Not even Apple does all of that anymore.
But I have a funny feeling that as
long as the company's current leadership stays in place, Nokia will still try to
do it all.
Posted at 09:10 PM
Tue - March 8, 2005
Boeing Boss Allegedly Gets Caught with Pants Down. Party in
Toulouse!
In the
Hutong
Beneath the Departure Path
for PEK Rwy 18R
Harry Stonecipher's abrupt departure from Boeing -
and its salacious cause - will certainly garner much
mirth around the world, but nowhere more so than Airbus headquarters in
Toulouse.
The French and Germans must
be laughing their heads off. The Germans are laughing because they have learned
the hard way the cost of relieving a competent commander in the middle of a
fight, regardless of his
peccadilloes.
And of course, the French
are laughing because if one of them had done what Stonecipher is accused of
doing, they'd expect a promotion or a raise.
Stonecipher won't be missed by
the Boeing rank and file, but you know what? It's nice if the troops
like you, but I would worry about a leader eager to curry favor with the
troops.
I just hope they
replace him, and soon. Airbus has had a ridiculously good romp, and it's been by
default - Boeing achieved almost nothing of note in the 14-year long dry spell
twixt the 777 and the 787 , while Airbus has done what Boeing used to
be quite good at - mixing experience, leading technology, and deep customer
relations to create great products.
It's high time Boeing had a leader who
can brilliantly synthesize all of that great raw material into the aerospace
powerhouse the company should be. Clearly, ol' Harry (whose previous claim to
fame as CEO was to sell McDonnell-Douglas to Boeing) was not the guy.
Over the next 20 years, China is
collectively sitting atop orders for 2,300 or so aircraft, equivalent to about six
years production of either Boeing or Airbus. By fundamentally rejecting Russian
designs, the government and the airlines are essentially saying they want more
technologically robust aircraft. While both Airbus and Boeing will both get
orders, somebody will own the larger chunk of the purchases. The only way Boeing
will do that is by being perceived as the stronger player. And right now, from
Beijing, Boeing not only looks weak, it looks lame.
Posted at 03:47 PM
Sun - March 6, 2005
China, India, and Technology
In the Hutong
The India vs. China thing has become something of
a fetish among global executives, business analysts, government officials, and
think tankers, and now The Economist.
As a strategic issue, the India/China
issue is totally irrelevant. Any senior executive anywhere in the world who is
still
saying "hmm, should we go with China or India" is out of touch and a danger to
his company and its shareholders.
India
is given far too much credit for its IT industry, which is a good thing for the
country, no doubt, but is not the answer to the country's ills. It makes up a
mere 4% of GDP, and is going to find its long term upside as a mass employer
sorely limited as the country runs out of trained graduates. Worse, as we are
discovering worldwide, the IT revolution has two distinct phases. In the first,
a company creates an industry, first in assembling machines, then designing
them, then providing services, then writing software, then designing the whole
deal.
In the second, traditional
industries in agriculture, manufacturing, and services begin to absorb
increasingly sophisticated doses of IT, radically transforming the industry and
raising its productivity and profitability. This is where the big payoff comes -
when the entire industry is fundamentally
changed.
With its English-speaking
masses, its technical universities, and a global community of Indian engineers,
the company will certainly do well with the
first.
But India's challenge is
education beyond this elite, because that is where the nation struggles, and its
lack of inward foreign direct investment. Without the inward FDI, traditional
industries find making the major investments to transform and modernize their
businesses a major, often insurmountable challenge. And without a large pool of
labor with an elementary and secondary education, where is the workforce
trainable to operate in those modern transformed enterprises? Literacy runs at
57% (vs. China's 91%), and an appalling 45% of adult women are functionally illiterate
in India.
So India is set to hit a
wall in this second phase unless it begins redressing some fundamental problems.
Building hardware, writing software, and even creating services will only absorb
part of the population and make a few sectors globally competitive. China, on
the other hand, is already starting to transform its
industries.
That can all change in a
heartbeat. All India needs to do is begin taking a chainsaw to the license raj, and it will suddenly look like a
great bet - even if companies have to provide their own workers with basic
instruction. I expect it will happen, but not
soon.
BTW - check out Silicon Hutong's
India soulmate - The Sepia Mutiny.
Posted at 01:29 AM
Sun - February 27, 2005
Review: The Man Who Stayed Behind
Deep, Deep in the Hutong
Just finished
The Man Who Stayed
Behind
by Sidney Rittemberg and Amanda Bennett. The book is an account of
Rittenberg's 35 years in China, first as a U.S. Army translator in World War II,
then as a U.N. Relief official, and finally, from 1947, as the only American
citizen to serve as a member of the Chinese Communist Party. After the
communists took China in 1949, Rittenberg chose to remain in China, rising in 16
years from a translator at Radio Beijing to - briefly, during the Cultural
Revolution - head of China's Broadcast Administration. He was imprisoned twice,
once for over six years, once for nearly ten.
The one question I asked myself when I
finished was "why the hell didn't I read this
sooner?"
Honest
Insights
As personal histories go,
this one is exceptionally easy to read and enjoyable, due I am sure in no small
part to Bennett's contribution, but also because Rittenberg's story itself is so
engrossing and painfully, blisteringly honest. The very idea of an American at
the heart of China's revolutionary maelstrom is remarkable. The insights and
context he is able to put on those events easily rivals in importance the better
known works of Harrison Salisbury et al.
But that is almost the least of the
book's merits. In the spirit of the self-criticisms he and all party members had
to endure, Rittenberg does a brilliant job at avoiding hindsight, instead taking
us on a journey as much mental, emotional, and spiritual as it was geographic,
ideologic, and historical. The insight into the mind of a man who could first
buy into the promise of Marxist-Leninist-Maoist thought, then subjugate his ego
and his conscience to the cause of revolution by itself makes the book worth
reading.
We come away from the book
understanding, as Rittenberg did, that the Chinese revolution deserves neither
to be idealized or demonized. Great horrors were committed in the name of the
revolution, to be sure, but China has indeed come a long way since 1949, and we
see through his eyes - and are able to juxtapose - the suffering in the
neo-feudal chaos that was Republican China before 1949, and the murderous
excesses committed since.
Rittenberg
could probably get away with passing final judgment on China, but he does not,
and the book is better for it. He strives instead to put us behind his eyes
through the whole experience, good and ill, and let us judge for ourselves.
It is customary for a reviewer to look
for flaws in a book, but to do so in this case would be picking nits. The book
does not pretend to be more than it is - an honest memoir of somebody who was
there and saw it all. Rittenberg makes no excuses for himself and his behavior -
and he comes out in most respects looking no better or worse than those around
him.
The book is no substitute for a
more academic history of the period, and there is nor shortage of either
histories or biographies to provide a broader canvas, more context, or greater
analysis. And frankly, the more background the reader has in modern Chinese
history the greater the value of this
read.
Key Takeaways
I walked away understanding two
things: first, there is no excuse, even for those of us who profess to care
about China and its people, to either apologize for or vilify the country or the
party. Only a balanced perspective on either will give us perspectives on how to
help China evolve as a nation. If Rittenberg can avoid those tracks, so should
we.
Second, China's modern history has
in its background a constant tug-of-war between internationalism and xenophobia.
In most cases, those conflicts are represented by people who are more one or the
other: the foreign-hating Empress Dowager vs. her nephew, the Kuangxu Emperor;
Yuan Shikai vs. Sun Yat-sen; Mao Zedong vs. Zhou Enlai, and even Li Peng vs. Zhu
Rongji. But as The Man Who Stayed
Behind points out, that's an over simplified
understanding of the battle. Rittenberg subtly reminds every non-Chinese who
lives in or deals with the People's Republic that China and its people have a
schizophrenic love/hate relationship with things and people foreign, and that
they seem fated to eternally swing between the two extremes.
If such insights put long-range goals
and long-term investments in China in a starker light, That's probably a very,
very good thing.
A
must-read.
Posted at 09:22 PM
Nokia's Grand Strategy: China. Silicon Hutong's Verdict: Ollila's
Waterloo
In the Silicon Hutong Command Post,
Shunyi
Jorma Olilla, prancing around China in a fit of
self congratulation that Nokia has managed to be in business in China for 20
years (and please explain why anyone NOT on Nokia's payroll should care?), is
promising his shareholders two
things:
1. No more price cuts this
year; and
2. Sales growth in China is
the key to the company's
future.
There's a ton of coverage on
this, a good example being Alan McEwen's piece in the Scotsman, one of the
few article I've seen that is not either a) a dutiful reproduction of Nokia's
press release, or b) a re-print of the Reuters wire
story.
There are a couple of problems
with both parts of that
strategy.
No More Price Cuts?
Check Mr. Ollila's Medications,
Please
Jorma admits that price
reductions in the industry are going to continue driven by increased
competition. He maintains that Nokia will not reduce prices
and yet will grow 25% faster than the
rest of the industry because Nokia will be
focusing on high-end phones.
That's
fine, but how does that explain how Nokia will grow faster than the rest of the
industry and grow market share without matching price cuts at the low-end and
mid-range, where the majority of sales take place?
Answer: it doesn't. Nokia will still
be in a price war at the low end, because at that level consumers are focused on
price, and if Nokia won't match falling prices, it won't sell. Their only hope
at the low end is market share domination that will allow them to squeeze
competitors through superior economies of scale. Want to maintain market share?
Cut your price.
Pressure at the
mid-range won't be quite as intense, but let's understand something: there is
little evidence to suggest that consumers are going to stop looking for the best
combination of price and relevant features. While there is some brand premium in
this segment, it won't hold up if prices drop precipitously in this
region.
China is the Future? Be
Afraid...
Nowhere in the world is
pricing pressure more intense than in China. Local manufacturers - and there are
close to 20 of them now, not counting those doing exclusively contract assembly
- continue to drive prices down. And they're not doing it for fun - they're
doing it because they have to.
Which
brings us to the core of Nokia's strategy to drive growth in China - break out
of the major cities and into the lower-tier cities and rural areas. These are
regions where the competition is strongest, where the price pressure is the
highest, and where Nokia and its global pedigree mean the least. Taking market
share in these regions is going to be about cutting
price.
The news gets worse. Prices in
the mid- and upper range are dropping rapidly as well, and China's carriers are
starting to pressure Nokia for special treatment, like coming up with exclusive models with distinct software and
hardware. Interesting as this sounds, this will increase Nokia's costs, and you
can bet the operators will be cutting the same deals with everyone, neutralizing
the marginal value of the deal and squeezing profits even further in the
critical mid-range.
China's dirty
little secret is how bloody small the high-end is. So don't count on the high
end.
Expect 3G to be the savior for
margins? Think again. Most experts see the potential of a
$50 retail price on a color W-CDMA phone within
12-18 months, driven in no small part by Chinese manufacturers, and possibly
even a sub-$30 GSM phone in China.
So
Nokia doesn't want to cut prices, but it's primary growth in its most important
market is going to require extreme pricing
competition.
Hello...?
This
kind of unconscionable denial is why Nokia's troubles are just beginning, and
will not end until the company wakes up, discards Ollila, and navigates itself
onto a course that is more in keeping with the current realities of the
industry, rather than those of ten years ago.
Posted at 02:33 PM
Thu - February 17, 2005
The U.S. Patent System is Broken. One Wonders about China
The War
Room
Silicon Hutong
Plaza
In an outstanding article in IEEE Spectrum in
December, Adam Jaffe, Dean of Arts and Sciences at
Brandeis University, and Josh Lerner, a professor at Harvard Business
School, explained in pithy, easy-to-understand terms why something is horribly
wrong with the U.S.
Patent System. So sick is this system, it appears, that we are on the
verge of enabling the tort bar to all but strangle a hell of a lot of day to day
business in America, and an even larger chunk of
innovation.
Having just finished the
article, I am navigating with great haste to Amazon to order their book
Innovation and Its Discontents: How Our Broken Patent
System is Endangering Innovation and Progress, and What To Do About It.
What is bothering me so
much is NOT that the world's largest and most respected system of intellectual
property protection is broken - stuff breaks all the time, and the Master of the
Universe has given us the wherewithal to fix things like this.
What is deeply disturbing when you
read this is: if this is how messed up the best system in the world is, how much
worse is the system here in China? I mean, every abuse of the system taking
place in the U.S., where small companies are being bullied by giant firms with
lots of lawyers and some patents, could happen here - and worse. Not only is
there no decent system of enforcing patent judgements, there is no independent
judiciary to try cases of patent abuse and to protect small
innovators.
People look around China
and they see big companies like Lenovo and they think "look, China has a robust
tech sector."
Ugly truth #45: until
China has a system that enforces intellectual property rights and an independent
judiciary to ensure that those rights are used in an effort to sustain a system
that encourages innovation, China's tech sector will continue to be about
knock-offs, copycats, and other such derivative effort that simply seeks to
steal somebody else's idea and sell it for less money.
There are, and will always be,
exceptions to this, but they will be notable in that they buck - not represent -
the broader national trend.
Posted at 02:37 PM
Tue - February 15, 2005
In A Land Full of People, Not Enough People
Snow Desk in the Hutong
One thing we're hearing more and more of in the
Hutong is how China is still not turning out enough people with the right kinds
of skills to support high-tech industries. Most recent example of this was in
today's Wall Street Journal, in a big page one article about how Baguio, in
northern Luzon in the Philippines, is somehow a better place to assemble and
test semiconductors than China.
Of
course, Intel would probably beg to differ, given that they are well along the
way in building their second assemble and test facility in
China.
I'd have to agree that the
toughest damned thing to find in China today is good local managerial talent.
Oh, sure, you can find folks from Taiwan, Hong Kong, and a host of returnees.
But for a whole lot of reasons these guys aren't the best solution to the
management problem.
This issue also
plagues China on the outsourcing and offshoring front. The country is finding it
increasingly difficult to compete with other Asian nations when the need is for
quality - not quantity - human resources. And if China is going to capitalize on
its huge population, the nation needs to be able to field a growing skilled
workforce, rather than try to keep winning investment and business on the basis
of cheap labor.
Posted at 02:01 PM
Nokia in Trouble: One Less Enemy? Guess again...
In the Hutong under half a foot of
snow
So Nokia seems to toss up a white flag in its holy wars,
agreeing to license Microsoft e-mail and music software for use in some of its
phones. Viewed alone, one would see this as a smart move for Nokia. One of the
core "challenges" facing the Espooians is that in attempting to own the industry
standard at each link in an ever-lengthening value chain, they are in severe
danger of both spreading their resources too thin, and of winding up with a
bunch of expensively-wrought technologies that, when compared to the
competition, are third-rate at best.
I
empathize with Nokia, even though I lambaste them, because I understand what it
must be like to go from being the dominant handset, base station, software, and
technology supplier to an industry to finding one's entire business model turned
on its ear.
The Boys in the
Glass House seem to understand that the old vertical model of the
mobile telecommunications industry (manufacturer to carrier to subscriber) has
gone away, perhaps forever. Their response, however, is to try do do everything.
And they can't - not if they are going to remain a credible supplier to carriers
who are desperately trying to reinvent their businesses, and not if they are
going to satisfy the needs of an increasingly demanding group of
users.
What Nokia needs to do if it
hopes to retain its market share leadership, its profits, and indeed to continue
to exist is to make some hard choices. It needs to cede significant chunks of
the value chain and focus on a few that it can do really well and quite
profitably.
This is especially the
case in China. One of the reasons the government and industry are paying
attention to mobile telecoms now is that they see the horizontalization of the industry as a huge
opportunity for not-so-large Chinese enterprises to begin building global
businesses in the niches that are opening up as the model
matures.
Which brings us back to
today's news - how smart of them to agree to use some Microsoft technology
rather than keep trying to reinvent the wheel. One almost sees
hope.
Unfortunately, Mary McDowell, head of Nokia's enterprise
division, chimes in and says "It doesn't mean swords have been turned into
plowshares," meaning that the war with Microsoft will continue on most other
fronts.
No, folks, unfortunately for
Nokia fans and shareholders everywhere, the Finnish Navel-Gazers are no closer
to recognizing the mistakes in their approach to the business now than they were
a year ago.
Short Nokia.
Posted at 12:42 PM
Mon - February 14, 2005
Games in for a Rough Ride in China
In The Hutong,
Supercomputing
The Chinese government's recently issued list of
50 banned video and computer games is going to
grow, and I wouldn't rule out the possibility of more aggressive moves against
this genre of entertainment.
The
problem with games goes beyond this current banning, which primarily content and
anti-piracy focused. (I mean, come on - anybody who has played Command &
Conquer: Generals can understand why the content nannies in the Beijing
government might have a tiny problem with
it.)
The real problem is that there is
a growing sentiment in the market among parents, teachers, policymakers, and
journalists that games are little more than an addictive, anti-social form of
time wastage, like gambling without the cash, and that they have no redeeming
social value. This sort of perception makes it difficult to build any kind of
opposition to these sorts of administrative action, and they make the lives of
game manufacturers uncomfortable.
The
industry can either say "hey - parents, teachers, and policymakers: bite my game
controller," and deal with the results of that kind of approach, or they can
take a more proactive approach to improve the image of gaming among those
groups.
Guaranteed, if the industry
DOESN'T do anything, these problems will grow. Soon.
You read it here first.
Posted at 02:36 PM
Catch The Village Grouch's New Blog
Bunkerbound in the
Hutong
Valentine's Day
Check out Steve Schwankert's new Village Grouch blog.
Steve is the nearest thing we have to
John Dvorak in Asia, and his well deserved reputation for brilliantly
articulating what is on the minds of techies and users is
legend.
Welcome to the Blog Party,
Grouch.
Posted at 12:23 PM
Fri - February 11, 2005
Salespeople In Short Supply in China
In the
Hutong
Watching the Sun
Set
This article on Xinhuanet
notes that salespersons are the most wanted professionals in China.
Extending that logic, clearly companies are recognizing the value of an
effective sales force.
No brainer of
the week:
CRM and sales-force
automation (SFA) companies take note: they're this )( close to getting it in the
boardrooms of China, Inc. I would guess 2005 would be a good time to redouble
efforts in the Middle Kingdom. Hmm?
Posted at 05:45 PM
Intellectual Property Circus
In the Hutong.
Chinese New Year. Day 3.
Late Afternoon
The part of me that genuinely believes that Linux
will actually amount to something like a mainstream operating system joined
Penguins the world over celebrating the judicial ass-kicking that SCO took from U.S.
Federal Judge Dale Kimball yesterday for not coughing up any evidence to support
its IPR violation claims so far in its legal action against
IBM.
What increasingly concerns me,
however, is what the Chinese may make of this. Here we are trying to make the
case to the Chinese to protect our intellectual property, even taking it to the
WTO, and at the same time showing them how IPR can be used by a frustrated,
pissant company to stifle the growth and development of an important
technology.
If I were a Chinese
judicial or technology official watching this from afar, I would say "these
sorts of legal piff-paffs are fine for a developed economy, but we cannot afford
to have every opportunist and his brother tying down the development of our most
critical sectors because they think their rights have been violated."
And even though that's obviously a
single-factor view of the issue, it has its points for China.
Posted at 05:34 PM
You'll be happy to know...
In The Hutong, Prior to Sunset on
Friday
While I am professionally constrained from making
any form of comment about the departure of Carly Fiorina from H-P, I will say
that I had a good laugh at this Dow
Jones piece quoting Kevin Rollins suggesting that there was "probably"
an opportunity for Dell in the H-P turmoil.
In other words, we can't really see
one, but now that you mention it, we'll do all we can to sow fear, uncertainty,
and doubt in the marketplace, and thanks for your
help.
Not that it will make any
difference here. As far as consumers are concerned in China, Dell is in headlong
retreat, regardless of their worldwide market share numbers. And consumer
sentiment tends to be pretty catching in these parts.
Posted at 05:20 PM
Sat
- January 22, 2005
Digital Times 18 January 05
The PowerPoint Chamber, Swissotel
Beijing
Article in Korea's
Digital
Times from the 18th of January. Talking about
mobile comms in China. If anybody has a link to this, I'd prefer to run the link
rather than a photocopy of the
article.
Though I love the
mugshot.
Posted at 02:02 PM
Street Fighting in the Hutong
In the Bunker
Been out of it for a while. The book is starting
to take up lots of time. Some good news coming next week on a related
front.
Posted at 09:12 AM
A Dragon Not Ready to Fly
Wharton, Leader of Large Lemmings?
Wharton's Take on IBM-Lenovo Deal: Out of Touch
The Air China IPO: A Little Perspective, Please
China's Tech Firms and Africa
UPS Success Depends on Ending Customs/China Post Axis
NOK NOK. Anybody home? More Empty Offices in the Glass House in
Espoo
Memo to Tom Ridge: Thanks, really, but fix the bloody visa approval
problem. Now.
A Subsidy by Any Other Name
Richard Edelman tells PR people "blog on, dudes."
Third Ring Road from the Silicon Hutong Suite, China World Tower 2
More Capital: Just What China's Securities Markets Don't Need
Television Powershift from Hollywood to Redmond? Somebody PLEASE wake up
Bill before he hurts himself...
Business Week Prognosticates, Dvorak Preens.
FedEx: How Green is my China?
The Coming China AgTech Boom
Wow. WSJ agrees with Silicon Hutong about Big Oil
China Radio International Gets Greedy; Branson says "Sod Off"
Big Oil Can say "No" to China
Would you buy a used stock from this man?
The Monster Screams for Coder Meat
Nokia's Advertising
Sony's Makeover
Wolves Howl the Song of Doom for Nokia
Busting the China Tobacco Monopolies: Open Market or Open Season
Jiang, Taiwan, and the World
Beyond Intellectual Property: The Counterfeit Dilemna
China and the Pentagon's New Map
Shrimp Joins Steel as a Sino-U.S. Irritant
Protectile Dysfunction
Site of the Week - Microsuck
Headquarters
Silicon Hutong
Beijing
Silicon Hutong
Beijing
Those of you not terribly enamored with Bill
Gates and the Legion of Hate, check out the Microsoft
Eradication Society, a great site focused on resources to help you
expunge Macrohard from your life.
Posted at 09:25 PM
Video Game Wars: How Long Before the Chinese Catch Up
Headquarters
Silicon Hutong
Beijing
Silicon Hutong
Beijing
So the United States Air Force wants to take a big step toward retiring the $2
million pilots flying $100 million jets, replacing them with smart kids sitting
in air conditioned trailers outside of Las Vegas flying $4 million recon drones.
The pilot of the future is the video gamer of today. Technology changing air combat.
Now, how long before the PLA figures out they can stop buying Su-27s and Su-30s from the Russians at $34 million a pop, then deal with spares, then deal with the headaches they're having integrating them into the force, and start buying projectable power on the cheap?
The pilot of the future is the video gamer of today. Technology changing air combat.
Now, how long before the PLA figures out they can stop buying Su-27s and Su-30s from the Russians at $34 million a pop, then deal with spares, then deal with the headaches they're having integrating them into the force, and start buying projectable power on the cheap?
Posted at 09:11 PM
Spooky Moment
Hangover Recovery
Unit
Silicon Hutong Clinic
Beijing
Silicon Hutong Clinic
Beijing
Watching
The Devil's
Own on HBO Asia. There's
this one spooky moment when the Irish terrorist arrives in New York, and his
U.S. sympathizer is driving him over the Brooklyn Bridge. He looks at the World
Trade Center towers and says "and there it is."
Hair rises on back of neck.
Hair rises on back of neck.
Posted at 08:50 PM
Irish Ball
Hangover Recovery
Unit
Silicon Hutong Clinic
Beijing
Silicon Hutong Clinic
Beijing
Irish Ball in Beijing last night, Sunny and I
there courtesy of Cyril and the gang at I.T.
United. Still getting over it, but a good time had by all. Cyril is
one of those guys who is plugged into a whole lot of fascinating people, and we
shared the table with some deeply fascinating people. And anyway, any table with
senior executives from Airbus, BMW,
Panalpina, and the Beijing city
government can't help but be really
interesting.
One of the wonderful things about living in Beijing - ball season. Ran into a bunch of people I haven't seen in a while, including Greg from Sun. Sun is up for taking a chunk of the open source war over here, and Greg is leading the charge with regional governments in Northeast Asia. That's a tough battle, given that the Asianux folks have a long lead and have something of a home court advantage.
One of the wonderful things about living in Beijing - ball season. Ran into a bunch of people I haven't seen in a while, including Greg from Sun. Sun is up for taking a chunk of the open source war over here, and Greg is leading the charge with regional governments in Northeast Asia. That's a tough battle, given that the Asianux folks have a long lead and have something of a home court advantage.
Posted at 08:41 PM
Thu - March 17, 2005
Bluetooth: Not Dead Yet, but Not Looking Good
Command
Center
Silicon Hutong Plaza
Beijing
Silicon Hutong Plaza
Beijing
Among the avalanche of information pouring out of
CTIA 2005 comes this piece in Engadget that suggests Bluetooth is
blossoming.
Respects to Ross Rubin, who I think is a very switched-on and entertaining writer, this comes across as a badly disguised piece of sponsored PR dreck from the heart of the Bluetooth SIG. The entry is long on declaration ("CTIA made a convincing case that this is Bluetooth's moment to shine") and very short on supporting evidence. Wow - half a dozen high-end phones have Bluetooth, there are some Bluetooth enabled GPS devices, a couple of peripherals, and an MIT-designed Bluetooth stuffed animal.
WIth respect, this is the sort of uptake and support that befits a new technology, not one that's been around for several years. Ross makes the point in the article that Bluetooth is hardly ubiquitous, and he's right. It may not be a novelty, but if it isn't ubiquitous now, it never will be. There are a lot of little reasons for this, but to me, there are really only three that matter:
1. Muddled Positioning: The industry is still operating under the misconception that Bluetooth would act as what Ross calls an "Internet Gateway" for personal area networks. I'm sorry - isn't that what WiFi does? My understanding of Bluetooth was that it would replace the serial cable, IRdA, and other hookups between devices, accessories, and peripherals, NOT create an Internet hookup. If the industry hasn't figured out the positioning of the Bluetooth relative to the other technologies out there, how are users to understand how to use it?
2. Unclear Value: Following on from the positioning problem, neither the Bluetooth SIG nor the industry has made sufficiently clear the advantages of using Bluetooth to your average. What IS a personal area network, and how does making it wireless make my life better. By failing to communicate the basic, simple advantages of eliminating half of the cords in ones laptop bag or on ones desktop, the SIG and manufacturers have insured that mainstream users cannot but fail to get it, and visionaries - who understand the value of the technology - think that because it's not being pushed, maybe the technology doesn't live up to its promise.
3. Impending Obsolescence: The standards groups around what has been called Ultra Wideband (UWB) and is now being called Wireless USB are just coalescing, and we are certainly some ways away from real product. But the positioning - starting with the new name - has begun in earnest, and the advantages are clear - eliminate your USB wires. Period. Awesome. Fast. Cool. I'm there. And thanks very much, Bluetooth, but I'm waiting.
Nowhere are these failures more a pity than in Asia, where consumers have proven willing to experiment with these kinds of technologies and implement them into their lifestyles, and where the mobile phone plays a role far greater than anywhere else in the world.
Ericsson did a great thing creating Bluetooth, and it has given a lot of us a chance to tinker and play with he idea of unplugging cables. Unfortunately, it's really clear that Bluetooth has fallen into Gordon Moore's chasm and will eventually land in the Graveyard of Technologies with Unrealized Potential.
Respects to Ross Rubin, who I think is a very switched-on and entertaining writer, this comes across as a badly disguised piece of sponsored PR dreck from the heart of the Bluetooth SIG. The entry is long on declaration ("CTIA made a convincing case that this is Bluetooth's moment to shine") and very short on supporting evidence. Wow - half a dozen high-end phones have Bluetooth, there are some Bluetooth enabled GPS devices, a couple of peripherals, and an MIT-designed Bluetooth stuffed animal.
WIth respect, this is the sort of uptake and support that befits a new technology, not one that's been around for several years. Ross makes the point in the article that Bluetooth is hardly ubiquitous, and he's right. It may not be a novelty, but if it isn't ubiquitous now, it never will be. There are a lot of little reasons for this, but to me, there are really only three that matter:
1. Muddled Positioning: The industry is still operating under the misconception that Bluetooth would act as what Ross calls an "Internet Gateway" for personal area networks. I'm sorry - isn't that what WiFi does? My understanding of Bluetooth was that it would replace the serial cable, IRdA, and other hookups between devices, accessories, and peripherals, NOT create an Internet hookup. If the industry hasn't figured out the positioning of the Bluetooth relative to the other technologies out there, how are users to understand how to use it?
2. Unclear Value: Following on from the positioning problem, neither the Bluetooth SIG nor the industry has made sufficiently clear the advantages of using Bluetooth to your average. What IS a personal area network, and how does making it wireless make my life better. By failing to communicate the basic, simple advantages of eliminating half of the cords in ones laptop bag or on ones desktop, the SIG and manufacturers have insured that mainstream users cannot but fail to get it, and visionaries - who understand the value of the technology - think that because it's not being pushed, maybe the technology doesn't live up to its promise.
3. Impending Obsolescence: The standards groups around what has been called Ultra Wideband (UWB) and is now being called Wireless USB are just coalescing, and we are certainly some ways away from real product. But the positioning - starting with the new name - has begun in earnest, and the advantages are clear - eliminate your USB wires. Period. Awesome. Fast. Cool. I'm there. And thanks very much, Bluetooth, but I'm waiting.
Nowhere are these failures more a pity than in Asia, where consumers have proven willing to experiment with these kinds of technologies and implement them into their lifestyles, and where the mobile phone plays a role far greater than anywhere else in the world.
Ericsson did a great thing creating Bluetooth, and it has given a lot of us a chance to tinker and play with he idea of unplugging cables. Unfortunately, it's really clear that Bluetooth has fallen into Gordon Moore's chasm and will eventually land in the Graveyard of Technologies with Unrealized Potential.
Posted at 12:42 PM
Wed - March 16, 2005
CEO Dead Pool - Which CEO is the next to get the boot?
Silicon Hutong
Plaza
Beijing
Beijing
Adelphia, AIG, Boeing, Disney, Enron,
Hewlett-Packard, Riggs Bank, Sony, Tyco, WorldCom - the list of companies
shedding their CEOs continues to
grow.
Who's next?
Send your entries to siliconhutong@mac.com.
Who's next?
Send your entries to siliconhutong@mac.com.
Posted at 03:54 PM
Wed - March 9, 2005
Nokia: Dis N-Gage
In the Hutong after a Long
Day
The capacity for institutional self-deception
powered by hubris grows in direct proportion to your greatest accomplishments.
It is for that reason, perhaps, that just under a year and a half after the introduction of the Finnish Taco Game Phone, better known as the N-Gage, Nokia is still telling itself the thing can be saved. Despite lousy sales, a lack of titles, and just plain stupid features, NokNok still thinks its a good idea. The Espooians are about to spend a chunk of their shareholders' money redesigning the ugly beast (2 years too late).
Which means they'll probably get a whole bunch of guys who spend their lives commuting from one end of Espoo to another to sit inside a glass room and brainstorm what it should look like, what it should do, etc.
I hope Nokia has learned a few lessons. Lessons like, well, getting feedback from the rest of the world - end users, hardcore gamers, game designers, retailers, and a whole lot of people who would love to provide Nokia with feedback.
Finally, I hope Nokia has started to learn that it cannot possibly hope to do everything, from design, to components, to manufacturing, to marketing, to software, to services and hope to succeed. Not even Apple does all of that anymore.
But I have a funny feeling that as long as the company's current leadership stays in place, Nokia will still try to do it all.
It is for that reason, perhaps, that just under a year and a half after the introduction of the Finnish Taco Game Phone, better known as the N-Gage, Nokia is still telling itself the thing can be saved. Despite lousy sales, a lack of titles, and just plain stupid features, NokNok still thinks its a good idea. The Espooians are about to spend a chunk of their shareholders' money redesigning the ugly beast (2 years too late).
Which means they'll probably get a whole bunch of guys who spend their lives commuting from one end of Espoo to another to sit inside a glass room and brainstorm what it should look like, what it should do, etc.
I hope Nokia has learned a few lessons. Lessons like, well, getting feedback from the rest of the world - end users, hardcore gamers, game designers, retailers, and a whole lot of people who would love to provide Nokia with feedback.
Finally, I hope Nokia has started to learn that it cannot possibly hope to do everything, from design, to components, to manufacturing, to marketing, to software, to services and hope to succeed. Not even Apple does all of that anymore.
But I have a funny feeling that as long as the company's current leadership stays in place, Nokia will still try to do it all.
Posted at 09:10 PM
Tue - March 8, 2005
Boeing Boss Allegedly Gets Caught with Pants Down. Party in Toulouse!
In the
Hutong
Beneath the Departure Path for PEK Rwy 18R
Beneath the Departure Path for PEK Rwy 18R
Harry Stonecipher's abrupt departure from Boeing -
and its salacious cause - will certainly garner much
mirth around the world, but nowhere more so than Airbus headquarters in
Toulouse.
The French and Germans must be laughing their heads off. The Germans are laughing because they have learned the hard way the cost of relieving a competent commander in the middle of a fight, regardless of his peccadilloes.
And of course, the French are laughing because if one of them had done what Stonecipher is accused of doing, they'd expect a promotion or a raise.
Stonecipher won't be missed by the Boeing rank and file, but you know what? It's nice if the troops like you, but I would worry about a leader eager to curry favor with the troops.
I just hope they replace him, and soon. Airbus has had a ridiculously good romp, and it's been by default - Boeing achieved almost nothing of note in the 14-year long dry spell twixt the 777 and the 787 , while Airbus has done what Boeing used to be quite good at - mixing experience, leading technology, and deep customer relations to create great products.
It's high time Boeing had a leader who can brilliantly synthesize all of that great raw material into the aerospace powerhouse the company should be. Clearly, ol' Harry (whose previous claim to fame as CEO was to sell McDonnell-Douglas to Boeing) was not the guy.
Over the next 20 years, China is collectively sitting atop orders for 2,300 or so aircraft, equivalent to about six years production of either Boeing or Airbus. By fundamentally rejecting Russian designs, the government and the airlines are essentially saying they want more technologically robust aircraft. While both Airbus and Boeing will both get orders, somebody will own the larger chunk of the purchases. The only way Boeing will do that is by being perceived as the stronger player. And right now, from Beijing, Boeing not only looks weak, it looks lame.
The French and Germans must be laughing their heads off. The Germans are laughing because they have learned the hard way the cost of relieving a competent commander in the middle of a fight, regardless of his peccadilloes.
And of course, the French are laughing because if one of them had done what Stonecipher is accused of doing, they'd expect a promotion or a raise.
Stonecipher won't be missed by the Boeing rank and file, but you know what? It's nice if the troops like you, but I would worry about a leader eager to curry favor with the troops.
I just hope they replace him, and soon. Airbus has had a ridiculously good romp, and it's been by default - Boeing achieved almost nothing of note in the 14-year long dry spell twixt the 777 and the 787 , while Airbus has done what Boeing used to be quite good at - mixing experience, leading technology, and deep customer relations to create great products.
It's high time Boeing had a leader who can brilliantly synthesize all of that great raw material into the aerospace powerhouse the company should be. Clearly, ol' Harry (whose previous claim to fame as CEO was to sell McDonnell-Douglas to Boeing) was not the guy.
Over the next 20 years, China is collectively sitting atop orders for 2,300 or so aircraft, equivalent to about six years production of either Boeing or Airbus. By fundamentally rejecting Russian designs, the government and the airlines are essentially saying they want more technologically robust aircraft. While both Airbus and Boeing will both get orders, somebody will own the larger chunk of the purchases. The only way Boeing will do that is by being perceived as the stronger player. And right now, from Beijing, Boeing not only looks weak, it looks lame.
Posted at 03:47 PM
Sun - March 6, 2005
China, India, and Technology
In the Hutong
The India vs. China thing has become something of
a fetish among global executives, business analysts, government officials, and
think tankers, and now The Economist.
As a strategic issue, the India/China
issue is totally irrelevant. Any senior executive anywhere in the world who is
still
saying "hmm, should we go with China or India" is out of touch and a danger to
his company and its shareholders.
India
is given far too much credit for its IT industry, which is a good thing for the
country, no doubt, but is not the answer to the country's ills. It makes up a
mere 4% of GDP, and is going to find its long term upside as a mass employer
sorely limited as the country runs out of trained graduates. Worse, as we are
discovering worldwide, the IT revolution has two distinct phases. In the first,
a company creates an industry, first in assembling machines, then designing
them, then providing services, then writing software, then designing the whole
deal.
In the second, traditional
industries in agriculture, manufacturing, and services begin to absorb
increasingly sophisticated doses of IT, radically transforming the industry and
raising its productivity and profitability. This is where the big payoff comes -
when the entire industry is fundamentally
changed.
With its English-speaking
masses, its technical universities, and a global community of Indian engineers,
the company will certainly do well with the
first.
But India's challenge is
education beyond this elite, because that is where the nation struggles, and its
lack of inward foreign direct investment. Without the inward FDI, traditional
industries find making the major investments to transform and modernize their
businesses a major, often insurmountable challenge. And without a large pool of
labor with an elementary and secondary education, where is the workforce
trainable to operate in those modern transformed enterprises? Literacy runs at
57% (vs. China's 91%), and an appalling 45% of adult women are functionally illiterate
in India.
So India is set to hit a
wall in this second phase unless it begins redressing some fundamental problems.
Building hardware, writing software, and even creating services will only absorb
part of the population and make a few sectors globally competitive. China, on
the other hand, is already starting to transform its
industries.
That can all change in a
heartbeat. All India needs to do is begin taking a chainsaw to the license raj, and it will suddenly look like a
great bet - even if companies have to provide their own workers with basic
instruction. I expect it will happen, but not
soon.
BTW - check out Silicon Hutong's
India soulmate - The Sepia Mutiny.
Posted at 01:29 AM
Sun - February 27, 2005
Review: The Man Who Stayed Behind
Deep, Deep in the Hutong
Just finished
The Man Who Stayed
Behind
by Sidney Rittemberg and Amanda Bennett. The book is an account of
Rittenberg's 35 years in China, first as a U.S. Army translator in World War II,
then as a U.N. Relief official, and finally, from 1947, as the only American
citizen to serve as a member of the Chinese Communist Party. After the
communists took China in 1949, Rittenberg chose to remain in China, rising in 16
years from a translator at Radio Beijing to - briefly, during the Cultural
Revolution - head of China's Broadcast Administration. He was imprisoned twice,
once for over six years, once for nearly ten.
The one question I asked myself when I
finished was "why the hell didn't I read this
sooner?"
Honest
Insights
As personal histories go,
this one is exceptionally easy to read and enjoyable, due I am sure in no small
part to Bennett's contribution, but also because Rittenberg's story itself is so
engrossing and painfully, blisteringly honest. The very idea of an American at
the heart of China's revolutionary maelstrom is remarkable. The insights and
context he is able to put on those events easily rivals in importance the better
known works of Harrison Salisbury et al.
But that is almost the least of the
book's merits. In the spirit of the self-criticisms he and all party members had
to endure, Rittenberg does a brilliant job at avoiding hindsight, instead taking
us on a journey as much mental, emotional, and spiritual as it was geographic,
ideologic, and historical. The insight into the mind of a man who could first
buy into the promise of Marxist-Leninist-Maoist thought, then subjugate his ego
and his conscience to the cause of revolution by itself makes the book worth
reading.
We come away from the book
understanding, as Rittenberg did, that the Chinese revolution deserves neither
to be idealized or demonized. Great horrors were committed in the name of the
revolution, to be sure, but China has indeed come a long way since 1949, and we
see through his eyes - and are able to juxtapose - the suffering in the
neo-feudal chaos that was Republican China before 1949, and the murderous
excesses committed since.
Rittenberg
could probably get away with passing final judgment on China, but he does not,
and the book is better for it. He strives instead to put us behind his eyes
through the whole experience, good and ill, and let us judge for ourselves.
It is customary for a reviewer to look
for flaws in a book, but to do so in this case would be picking nits. The book
does not pretend to be more than it is - an honest memoir of somebody who was
there and saw it all. Rittenberg makes no excuses for himself and his behavior -
and he comes out in most respects looking no better or worse than those around
him.
The book is no substitute for a
more academic history of the period, and there is nor shortage of either
histories or biographies to provide a broader canvas, more context, or greater
analysis. And frankly, the more background the reader has in modern Chinese
history the greater the value of this
read.
Key Takeaways
I walked away understanding two
things: first, there is no excuse, even for those of us who profess to care
about China and its people, to either apologize for or vilify the country or the
party. Only a balanced perspective on either will give us perspectives on how to
help China evolve as a nation. If Rittenberg can avoid those tracks, so should
we.
Second, China's modern history has
in its background a constant tug-of-war between internationalism and xenophobia.
In most cases, those conflicts are represented by people who are more one or the
other: the foreign-hating Empress Dowager vs. her nephew, the Kuangxu Emperor;
Yuan Shikai vs. Sun Yat-sen; Mao Zedong vs. Zhou Enlai, and even Li Peng vs. Zhu
Rongji. But as The Man Who Stayed
Behind points out, that's an over simplified
understanding of the battle. Rittenberg subtly reminds every non-Chinese who
lives in or deals with the People's Republic that China and its people have a
schizophrenic love/hate relationship with things and people foreign, and that
they seem fated to eternally swing between the two extremes.
If such insights put long-range goals
and long-term investments in China in a starker light, That's probably a very,
very good thing.
A
must-read.
Posted at 09:22 PM
Nokia's Grand Strategy: China. Silicon Hutong's Verdict: Ollila's
Waterloo
In the Silicon Hutong Command Post,
Shunyi
Jorma Olilla, prancing around China in a fit of
self congratulation that Nokia has managed to be in business in China for 20
years (and please explain why anyone NOT on Nokia's payroll should care?), is
promising his shareholders two
things:
1. No more price cuts this
year; and
2. Sales growth in China is
the key to the company's
future.
There's a ton of coverage on
this, a good example being Alan McEwen's piece in the Scotsman, one of the
few article I've seen that is not either a) a dutiful reproduction of Nokia's
press release, or b) a re-print of the Reuters wire
story.
There are a couple of problems
with both parts of that
strategy.
No More Price Cuts?
Check Mr. Ollila's Medications,
Please
Jorma admits that price
reductions in the industry are going to continue driven by increased
competition. He maintains that Nokia will not reduce prices
and yet will grow 25% faster than the
rest of the industry because Nokia will be
focusing on high-end phones.
That's
fine, but how does that explain how Nokia will grow faster than the rest of the
industry and grow market share without matching price cuts at the low-end and
mid-range, where the majority of sales take place?
Answer: it doesn't. Nokia will still
be in a price war at the low end, because at that level consumers are focused on
price, and if Nokia won't match falling prices, it won't sell. Their only hope
at the low end is market share domination that will allow them to squeeze
competitors through superior economies of scale. Want to maintain market share?
Cut your price.
Pressure at the
mid-range won't be quite as intense, but let's understand something: there is
little evidence to suggest that consumers are going to stop looking for the best
combination of price and relevant features. While there is some brand premium in
this segment, it won't hold up if prices drop precipitously in this
region.
China is the Future? Be
Afraid...
Nowhere in the world is
pricing pressure more intense than in China. Local manufacturers - and there are
close to 20 of them now, not counting those doing exclusively contract assembly
- continue to drive prices down. And they're not doing it for fun - they're
doing it because they have to.
Which
brings us to the core of Nokia's strategy to drive growth in China - break out
of the major cities and into the lower-tier cities and rural areas. These are
regions where the competition is strongest, where the price pressure is the
highest, and where Nokia and its global pedigree mean the least. Taking market
share in these regions is going to be about cutting
price.
The news gets worse. Prices in
the mid- and upper range are dropping rapidly as well, and China's carriers are
starting to pressure Nokia for special treatment, like coming up with exclusive models with distinct software and
hardware. Interesting as this sounds, this will increase Nokia's costs, and you
can bet the operators will be cutting the same deals with everyone, neutralizing
the marginal value of the deal and squeezing profits even further in the
critical mid-range.
China's dirty
little secret is how bloody small the high-end is. So don't count on the high
end.
Expect 3G to be the savior for
margins? Think again. Most experts see the potential of a
$50 retail price on a color W-CDMA phone within
12-18 months, driven in no small part by Chinese manufacturers, and possibly
even a sub-$30 GSM phone in China.
So
Nokia doesn't want to cut prices, but it's primary growth in its most important
market is going to require extreme pricing
competition.
Hello...?
This
kind of unconscionable denial is why Nokia's troubles are just beginning, and
will not end until the company wakes up, discards Ollila, and navigates itself
onto a course that is more in keeping with the current realities of the
industry, rather than those of ten years ago.
Posted at 02:33 PM
Thu - February 17, 2005
The U.S. Patent System is Broken. One Wonders about China
The War
Room
Silicon Hutong
Plaza
In an outstanding article in IEEE Spectrum in
December, Adam Jaffe, Dean of Arts and Sciences at
Brandeis University, and Josh Lerner, a professor at Harvard Business
School, explained in pithy, easy-to-understand terms why something is horribly
wrong with the U.S.
Patent System. So sick is this system, it appears, that we are on the
verge of enabling the tort bar to all but strangle a hell of a lot of day to day
business in America, and an even larger chunk of
innovation.
Having just finished the
article, I am navigating with great haste to Amazon to order their book
Innovation and Its Discontents: How Our Broken Patent
System is Endangering Innovation and Progress, and What To Do About It.
What is bothering me so
much is NOT that the world's largest and most respected system of intellectual
property protection is broken - stuff breaks all the time, and the Master of the
Universe has given us the wherewithal to fix things like this.
What is deeply disturbing when you
read this is: if this is how messed up the best system in the world is, how much
worse is the system here in China? I mean, every abuse of the system taking
place in the U.S., where small companies are being bullied by giant firms with
lots of lawyers and some patents, could happen here - and worse. Not only is
there no decent system of enforcing patent judgements, there is no independent
judiciary to try cases of patent abuse and to protect small
innovators.
People look around China
and they see big companies like Lenovo and they think "look, China has a robust
tech sector."
Ugly truth #45: until
China has a system that enforces intellectual property rights and an independent
judiciary to ensure that those rights are used in an effort to sustain a system
that encourages innovation, China's tech sector will continue to be about
knock-offs, copycats, and other such derivative effort that simply seeks to
steal somebody else's idea and sell it for less money.
There are, and will always be,
exceptions to this, but they will be notable in that they buck - not represent -
the broader national trend.
Posted at 02:37 PM
Tue - February 15, 2005
In A Land Full of People, Not Enough People
Snow Desk in the Hutong
One thing we're hearing more and more of in the
Hutong is how China is still not turning out enough people with the right kinds
of skills to support high-tech industries. Most recent example of this was in
today's Wall Street Journal, in a big page one article about how Baguio, in
northern Luzon in the Philippines, is somehow a better place to assemble and
test semiconductors than China.
Of
course, Intel would probably beg to differ, given that they are well along the
way in building their second assemble and test facility in
China.
I'd have to agree that the
toughest damned thing to find in China today is good local managerial talent.
Oh, sure, you can find folks from Taiwan, Hong Kong, and a host of returnees.
But for a whole lot of reasons these guys aren't the best solution to the
management problem.
This issue also
plagues China on the outsourcing and offshoring front. The country is finding it
increasingly difficult to compete with other Asian nations when the need is for
quality - not quantity - human resources. And if China is going to capitalize on
its huge population, the nation needs to be able to field a growing skilled
workforce, rather than try to keep winning investment and business on the basis
of cheap labor.
Posted at 02:01 PM
Nokia in Trouble: One Less Enemy? Guess again...
In the Hutong under half a foot of
snow
So Nokia seems to toss up a white flag in its holy wars,
agreeing to license Microsoft e-mail and music software for use in some of its
phones. Viewed alone, one would see this as a smart move for Nokia. One of the
core "challenges" facing the Espooians is that in attempting to own the industry
standard at each link in an ever-lengthening value chain, they are in severe
danger of both spreading their resources too thin, and of winding up with a
bunch of expensively-wrought technologies that, when compared to the
competition, are third-rate at best.
I
empathize with Nokia, even though I lambaste them, because I understand what it
must be like to go from being the dominant handset, base station, software, and
technology supplier to an industry to finding one's entire business model turned
on its ear.
The Boys in the
Glass House seem to understand that the old vertical model of the
mobile telecommunications industry (manufacturer to carrier to subscriber) has
gone away, perhaps forever. Their response, however, is to try do do everything.
And they can't - not if they are going to remain a credible supplier to carriers
who are desperately trying to reinvent their businesses, and not if they are
going to satisfy the needs of an increasingly demanding group of
users.
What Nokia needs to do if it
hopes to retain its market share leadership, its profits, and indeed to continue
to exist is to make some hard choices. It needs to cede significant chunks of
the value chain and focus on a few that it can do really well and quite
profitably.
This is especially the
case in China. One of the reasons the government and industry are paying
attention to mobile telecoms now is that they see the horizontalization of the industry as a huge
opportunity for not-so-large Chinese enterprises to begin building global
businesses in the niches that are opening up as the model
matures.
Which brings us back to
today's news - how smart of them to agree to use some Microsoft technology
rather than keep trying to reinvent the wheel. One almost sees
hope.
Unfortunately, Mary McDowell, head of Nokia's enterprise
division, chimes in and says "It doesn't mean swords have been turned into
plowshares," meaning that the war with Microsoft will continue on most other
fronts.
No, folks, unfortunately for
Nokia fans and shareholders everywhere, the Finnish Navel-Gazers are no closer
to recognizing the mistakes in their approach to the business now than they were
a year ago.
Short Nokia.
Posted at 12:42 PM
Mon - February 14, 2005
Games in for a Rough Ride in China
In The Hutong,
Supercomputing
The Chinese government's recently issued list of
50 banned video and computer games is going to
grow, and I wouldn't rule out the possibility of more aggressive moves against
this genre of entertainment.
The
problem with games goes beyond this current banning, which primarily content and
anti-piracy focused. (I mean, come on - anybody who has played Command &
Conquer: Generals can understand why the content nannies in the Beijing
government might have a tiny problem with
it.)
The real problem is that there is
a growing sentiment in the market among parents, teachers, policymakers, and
journalists that games are little more than an addictive, anti-social form of
time wastage, like gambling without the cash, and that they have no redeeming
social value. This sort of perception makes it difficult to build any kind of
opposition to these sorts of administrative action, and they make the lives of
game manufacturers uncomfortable.
The
industry can either say "hey - parents, teachers, and policymakers: bite my game
controller," and deal with the results of that kind of approach, or they can
take a more proactive approach to improve the image of gaming among those
groups.
Guaranteed, if the industry
DOESN'T do anything, these problems will grow. Soon.
You read it here first.
Posted at 02:36 PM
Catch The Village Grouch's New Blog
Bunkerbound in the
Hutong
Valentine's Day
Check out Steve Schwankert's new Village Grouch blog.
Steve is the nearest thing we have to
John Dvorak in Asia, and his well deserved reputation for brilliantly
articulating what is on the minds of techies and users is
legend.
Welcome to the Blog Party,
Grouch.
Posted at 12:23 PM
Fri - February 11, 2005
Salespeople In Short Supply in China
In the
Hutong
Watching the Sun
Set
This article on Xinhuanet
notes that salespersons are the most wanted professionals in China.
Extending that logic, clearly companies are recognizing the value of an
effective sales force.
No brainer of
the week:
CRM and sales-force
automation (SFA) companies take note: they're this )( close to getting it in the
boardrooms of China, Inc. I would guess 2005 would be a good time to redouble
efforts in the Middle Kingdom. Hmm?
Posted at 05:45 PM
Intellectual Property Circus
In the Hutong.
Chinese New Year. Day 3.
Late Afternoon
The part of me that genuinely believes that Linux
will actually amount to something like a mainstream operating system joined
Penguins the world over celebrating the judicial ass-kicking that SCO took from U.S.
Federal Judge Dale Kimball yesterday for not coughing up any evidence to support
its IPR violation claims so far in its legal action against
IBM.
What increasingly concerns me,
however, is what the Chinese may make of this. Here we are trying to make the
case to the Chinese to protect our intellectual property, even taking it to the
WTO, and at the same time showing them how IPR can be used by a frustrated,
pissant company to stifle the growth and development of an important
technology.
If I were a Chinese
judicial or technology official watching this from afar, I would say "these
sorts of legal piff-paffs are fine for a developed economy, but we cannot afford
to have every opportunist and his brother tying down the development of our most
critical sectors because they think their rights have been violated."
And even though that's obviously a
single-factor view of the issue, it has its points for China.
Posted at 05:34 PM
You'll be happy to know...
In The Hutong, Prior to Sunset on
Friday
While I am professionally constrained from making
any form of comment about the departure of Carly Fiorina from H-P, I will say
that I had a good laugh at this Dow
Jones piece quoting Kevin Rollins suggesting that there was "probably"
an opportunity for Dell in the H-P turmoil.
In other words, we can't really see
one, but now that you mention it, we'll do all we can to sow fear, uncertainty,
and doubt in the marketplace, and thanks for your
help.
Not that it will make any
difference here. As far as consumers are concerned in China, Dell is in headlong
retreat, regardless of their worldwide market share numbers. And consumer
sentiment tends to be pretty catching in these parts.
Posted at 05:20 PM
Sat
- January 22, 2005
Digital Times 18 January 05
The PowerPoint Chamber, Swissotel
Beijing
Article in Korea's
Digital
Times from the 18th of January. Talking about
mobile comms in China. If anybody has a link to this, I'd prefer to run the link
rather than a photocopy of the
article.
Though I love the
mugshot.
Posted at 02:02 PM
Street Fighting in the Hutong
In the Bunker
Been out of it for a while. The book is starting
to take up lots of time. Some good news coming next week on a related
front.
Posted at 09:12 AM
A Dragon Not Ready to Fly
Wharton, Leader of Large Lemmings?
Wharton's Take on IBM-Lenovo Deal: Out of Touch
The Air China IPO: A Little Perspective, Please
China's Tech Firms and Africa
UPS Success Depends on Ending Customs/China Post Axis
NOK NOK. Anybody home? More Empty Offices in the Glass House in
Espoo
Memo to Tom Ridge: Thanks, really, but fix the bloody visa approval
problem. Now.
A Subsidy by Any Other Name
Richard Edelman tells PR people "blog on, dudes."
Third Ring Road from the Silicon Hutong Suite, China World Tower 2
More Capital: Just What China's Securities Markets Don't Need
Television Powershift from Hollywood to Redmond? Somebody PLEASE wake up
Bill before he hurts himself...
Business Week Prognosticates, Dvorak Preens.
FedEx: How Green is my China?
The Coming China AgTech Boom
Wow. WSJ agrees with Silicon Hutong about Big Oil
China Radio International Gets Greedy; Branson says "Sod Off"
Big Oil Can say "No" to China
Would you buy a used stock from this man?
The Monster Screams for Coder Meat
Nokia's Advertising
Sony's Makeover
Wolves Howl the Song of Doom for Nokia
Busting the China Tobacco Monopolies: Open Market or Open Season
Jiang, Taiwan, and the World
Beyond Intellectual Property: The Counterfeit Dilemna
China and the Pentagon's New Map
Shrimp Joins Steel as a Sino-U.S. Irritant
Protectile Dysfunction
China, India, and Technology
In the Hutong
The India vs. China thing has become something of
a fetish among global executives, business analysts, government officials, and
think tankers, and now The Economist.
As a strategic issue, the India/China issue is totally irrelevant. Any senior executive anywhere in the world who is still saying "hmm, should we go with China or India" is out of touch and a danger to his company and its shareholders.
India is given far too much credit for its IT industry, which is a good thing for the country, no doubt, but is not the answer to the country's ills. It makes up a mere 4% of GDP, and is going to find its long term upside as a mass employer sorely limited as the country runs out of trained graduates. Worse, as we are discovering worldwide, the IT revolution has two distinct phases. In the first, a company creates an industry, first in assembling machines, then designing them, then providing services, then writing software, then designing the whole deal.
In the second, traditional industries in agriculture, manufacturing, and services begin to absorb increasingly sophisticated doses of IT, radically transforming the industry and raising its productivity and profitability. This is where the big payoff comes - when the entire industry is fundamentally changed.
With its English-speaking masses, its technical universities, and a global community of Indian engineers, the company will certainly do well with the first.
But India's challenge is education beyond this elite, because that is where the nation struggles, and its lack of inward foreign direct investment. Without the inward FDI, traditional industries find making the major investments to transform and modernize their businesses a major, often insurmountable challenge. And without a large pool of labor with an elementary and secondary education, where is the workforce trainable to operate in those modern transformed enterprises? Literacy runs at 57% (vs. China's 91%), and an appalling 45% of adult women are functionally illiterate in India.
So India is set to hit a wall in this second phase unless it begins redressing some fundamental problems. Building hardware, writing software, and even creating services will only absorb part of the population and make a few sectors globally competitive. China, on the other hand, is already starting to transform its industries.
That can all change in a heartbeat. All India needs to do is begin taking a chainsaw to the license raj, and it will suddenly look like a great bet - even if companies have to provide their own workers with basic instruction. I expect it will happen, but not soon.
BTW - check out Silicon Hutong's India soulmate - The Sepia Mutiny.
As a strategic issue, the India/China issue is totally irrelevant. Any senior executive anywhere in the world who is still saying "hmm, should we go with China or India" is out of touch and a danger to his company and its shareholders.
India is given far too much credit for its IT industry, which is a good thing for the country, no doubt, but is not the answer to the country's ills. It makes up a mere 4% of GDP, and is going to find its long term upside as a mass employer sorely limited as the country runs out of trained graduates. Worse, as we are discovering worldwide, the IT revolution has two distinct phases. In the first, a company creates an industry, first in assembling machines, then designing them, then providing services, then writing software, then designing the whole deal.
In the second, traditional industries in agriculture, manufacturing, and services begin to absorb increasingly sophisticated doses of IT, radically transforming the industry and raising its productivity and profitability. This is where the big payoff comes - when the entire industry is fundamentally changed.
With its English-speaking masses, its technical universities, and a global community of Indian engineers, the company will certainly do well with the first.
But India's challenge is education beyond this elite, because that is where the nation struggles, and its lack of inward foreign direct investment. Without the inward FDI, traditional industries find making the major investments to transform and modernize their businesses a major, often insurmountable challenge. And without a large pool of labor with an elementary and secondary education, where is the workforce trainable to operate in those modern transformed enterprises? Literacy runs at 57% (vs. China's 91%), and an appalling 45% of adult women are functionally illiterate in India.
So India is set to hit a wall in this second phase unless it begins redressing some fundamental problems. Building hardware, writing software, and even creating services will only absorb part of the population and make a few sectors globally competitive. China, on the other hand, is already starting to transform its industries.
That can all change in a heartbeat. All India needs to do is begin taking a chainsaw to the license raj, and it will suddenly look like a great bet - even if companies have to provide their own workers with basic instruction. I expect it will happen, but not soon.
BTW - check out Silicon Hutong's India soulmate - The Sepia Mutiny.
Posted at 01:29 AM
Sun - February 27, 2005
Review: The Man Who Stayed Behind
Deep, Deep in the Hutong
Just finished
The Man Who Stayed
Behind
by Sidney Rittemberg and Amanda Bennett. The book is an account of
Rittenberg's 35 years in China, first as a U.S. Army translator in World War II,
then as a U.N. Relief official, and finally, from 1947, as the only American
citizen to serve as a member of the Chinese Communist Party. After the
communists took China in 1949, Rittenberg chose to remain in China, rising in 16
years from a translator at Radio Beijing to - briefly, during the Cultural
Revolution - head of China's Broadcast Administration. He was imprisoned twice,
once for over six years, once for nearly ten.
The one question I asked myself when I
finished was "why the hell didn't I read this
sooner?"
Honest
Insights
As personal histories go,
this one is exceptionally easy to read and enjoyable, due I am sure in no small
part to Bennett's contribution, but also because Rittenberg's story itself is so
engrossing and painfully, blisteringly honest. The very idea of an American at
the heart of China's revolutionary maelstrom is remarkable. The insights and
context he is able to put on those events easily rivals in importance the better
known works of Harrison Salisbury et al.
But that is almost the least of the
book's merits. In the spirit of the self-criticisms he and all party members had
to endure, Rittenberg does a brilliant job at avoiding hindsight, instead taking
us on a journey as much mental, emotional, and spiritual as it was geographic,
ideologic, and historical. The insight into the mind of a man who could first
buy into the promise of Marxist-Leninist-Maoist thought, then subjugate his ego
and his conscience to the cause of revolution by itself makes the book worth
reading.
We come away from the book
understanding, as Rittenberg did, that the Chinese revolution deserves neither
to be idealized or demonized. Great horrors were committed in the name of the
revolution, to be sure, but China has indeed come a long way since 1949, and we
see through his eyes - and are able to juxtapose - the suffering in the
neo-feudal chaos that was Republican China before 1949, and the murderous
excesses committed since.
Rittenberg
could probably get away with passing final judgment on China, but he does not,
and the book is better for it. He strives instead to put us behind his eyes
through the whole experience, good and ill, and let us judge for ourselves.
It is customary for a reviewer to look
for flaws in a book, but to do so in this case would be picking nits. The book
does not pretend to be more than it is - an honest memoir of somebody who was
there and saw it all. Rittenberg makes no excuses for himself and his behavior -
and he comes out in most respects looking no better or worse than those around
him.
The book is no substitute for a
more academic history of the period, and there is nor shortage of either
histories or biographies to provide a broader canvas, more context, or greater
analysis. And frankly, the more background the reader has in modern Chinese
history the greater the value of this
read.
Key Takeaways
I walked away understanding two
things: first, there is no excuse, even for those of us who profess to care
about China and its people, to either apologize for or vilify the country or the
party. Only a balanced perspective on either will give us perspectives on how to
help China evolve as a nation. If Rittenberg can avoid those tracks, so should
we.
Second, China's modern history has
in its background a constant tug-of-war between internationalism and xenophobia.
In most cases, those conflicts are represented by people who are more one or the
other: the foreign-hating Empress Dowager vs. her nephew, the Kuangxu Emperor;
Yuan Shikai vs. Sun Yat-sen; Mao Zedong vs. Zhou Enlai, and even Li Peng vs. Zhu
Rongji. But as The Man Who Stayed
Behind points out, that's an over simplified
understanding of the battle. Rittenberg subtly reminds every non-Chinese who
lives in or deals with the People's Republic that China and its people have a
schizophrenic love/hate relationship with things and people foreign, and that
they seem fated to eternally swing between the two extremes.
If such insights put long-range goals
and long-term investments in China in a starker light, That's probably a very,
very good thing.
A
must-read.
Posted at 09:22 PM
Nokia's Grand Strategy: China. Silicon Hutong's Verdict: Ollila's
Waterloo
In the Silicon Hutong Command Post,
Shunyi
Jorma Olilla, prancing around China in a fit of
self congratulation that Nokia has managed to be in business in China for 20
years (and please explain why anyone NOT on Nokia's payroll should care?), is
promising his shareholders two
things:
1. No more price cuts this
year; and
2. Sales growth in China is
the key to the company's
future.
There's a ton of coverage on
this, a good example being Alan McEwen's piece in the Scotsman, one of the
few article I've seen that is not either a) a dutiful reproduction of Nokia's
press release, or b) a re-print of the Reuters wire
story.
There are a couple of problems
with both parts of that
strategy.
No More Price Cuts?
Check Mr. Ollila's Medications,
Please
Jorma admits that price
reductions in the industry are going to continue driven by increased
competition. He maintains that Nokia will not reduce prices
and yet will grow 25% faster than the
rest of the industry because Nokia will be
focusing on high-end phones.
That's
fine, but how does that explain how Nokia will grow faster than the rest of the
industry and grow market share without matching price cuts at the low-end and
mid-range, where the majority of sales take place?
Answer: it doesn't. Nokia will still
be in a price war at the low end, because at that level consumers are focused on
price, and if Nokia won't match falling prices, it won't sell. Their only hope
at the low end is market share domination that will allow them to squeeze
competitors through superior economies of scale. Want to maintain market share?
Cut your price.
Pressure at the
mid-range won't be quite as intense, but let's understand something: there is
little evidence to suggest that consumers are going to stop looking for the best
combination of price and relevant features. While there is some brand premium in
this segment, it won't hold up if prices drop precipitously in this
region.
China is the Future? Be
Afraid...
Nowhere in the world is
pricing pressure more intense than in China. Local manufacturers - and there are
close to 20 of them now, not counting those doing exclusively contract assembly
- continue to drive prices down. And they're not doing it for fun - they're
doing it because they have to.
Which
brings us to the core of Nokia's strategy to drive growth in China - break out
of the major cities and into the lower-tier cities and rural areas. These are
regions where the competition is strongest, where the price pressure is the
highest, and where Nokia and its global pedigree mean the least. Taking market
share in these regions is going to be about cutting
price.
The news gets worse. Prices in
the mid- and upper range are dropping rapidly as well, and China's carriers are
starting to pressure Nokia for special treatment, like coming up with exclusive models with distinct software and
hardware. Interesting as this sounds, this will increase Nokia's costs, and you
can bet the operators will be cutting the same deals with everyone, neutralizing
the marginal value of the deal and squeezing profits even further in the
critical mid-range.
China's dirty
little secret is how bloody small the high-end is. So don't count on the high
end.
Expect 3G to be the savior for
margins? Think again. Most experts see the potential of a
$50 retail price on a color W-CDMA phone within
12-18 months, driven in no small part by Chinese manufacturers, and possibly
even a sub-$30 GSM phone in China.
So
Nokia doesn't want to cut prices, but it's primary growth in its most important
market is going to require extreme pricing
competition.
Hello...?
This
kind of unconscionable denial is why Nokia's troubles are just beginning, and
will not end until the company wakes up, discards Ollila, and navigates itself
onto a course that is more in keeping with the current realities of the
industry, rather than those of ten years ago.
Posted at 02:33 PM
Thu - February 17, 2005
The U.S. Patent System is Broken. One Wonders about China
The War
Room
Silicon Hutong
Plaza
In an outstanding article in IEEE Spectrum in
December, Adam Jaffe, Dean of Arts and Sciences at
Brandeis University, and Josh Lerner, a professor at Harvard Business
School, explained in pithy, easy-to-understand terms why something is horribly
wrong with the U.S.
Patent System. So sick is this system, it appears, that we are on the
verge of enabling the tort bar to all but strangle a hell of a lot of day to day
business in America, and an even larger chunk of
innovation.
Having just finished the
article, I am navigating with great haste to Amazon to order their book
Innovation and Its Discontents: How Our Broken Patent
System is Endangering Innovation and Progress, and What To Do About It.
What is bothering me so
much is NOT that the world's largest and most respected system of intellectual
property protection is broken - stuff breaks all the time, and the Master of the
Universe has given us the wherewithal to fix things like this.
What is deeply disturbing when you
read this is: if this is how messed up the best system in the world is, how much
worse is the system here in China? I mean, every abuse of the system taking
place in the U.S., where small companies are being bullied by giant firms with
lots of lawyers and some patents, could happen here - and worse. Not only is
there no decent system of enforcing patent judgements, there is no independent
judiciary to try cases of patent abuse and to protect small
innovators.
People look around China
and they see big companies like Lenovo and they think "look, China has a robust
tech sector."
Ugly truth #45: until
China has a system that enforces intellectual property rights and an independent
judiciary to ensure that those rights are used in an effort to sustain a system
that encourages innovation, China's tech sector will continue to be about
knock-offs, copycats, and other such derivative effort that simply seeks to
steal somebody else's idea and sell it for less money.
There are, and will always be,
exceptions to this, but they will be notable in that they buck - not represent -
the broader national trend.
Posted at 02:37 PM
Tue - February 15, 2005
In A Land Full of People, Not Enough People
Snow Desk in the Hutong
One thing we're hearing more and more of in the
Hutong is how China is still not turning out enough people with the right kinds
of skills to support high-tech industries. Most recent example of this was in
today's Wall Street Journal, in a big page one article about how Baguio, in
northern Luzon in the Philippines, is somehow a better place to assemble and
test semiconductors than China.
Of
course, Intel would probably beg to differ, given that they are well along the
way in building their second assemble and test facility in
China.
I'd have to agree that the
toughest damned thing to find in China today is good local managerial talent.
Oh, sure, you can find folks from Taiwan, Hong Kong, and a host of returnees.
But for a whole lot of reasons these guys aren't the best solution to the
management problem.
This issue also
plagues China on the outsourcing and offshoring front. The country is finding it
increasingly difficult to compete with other Asian nations when the need is for
quality - not quantity - human resources. And if China is going to capitalize on
its huge population, the nation needs to be able to field a growing skilled
workforce, rather than try to keep winning investment and business on the basis
of cheap labor.
Posted at 02:01 PM
Nokia in Trouble: One Less Enemy? Guess again...
In the Hutong under half a foot of
snow
So Nokia seems to toss up a white flag in its holy wars,
agreeing to license Microsoft e-mail and music software for use in some of its
phones. Viewed alone, one would see this as a smart move for Nokia. One of the
core "challenges" facing the Espooians is that in attempting to own the industry
standard at each link in an ever-lengthening value chain, they are in severe
danger of both spreading their resources too thin, and of winding up with a
bunch of expensively-wrought technologies that, when compared to the
competition, are third-rate at best.
I
empathize with Nokia, even though I lambaste them, because I understand what it
must be like to go from being the dominant handset, base station, software, and
technology supplier to an industry to finding one's entire business model turned
on its ear.
The Boys in the
Glass House seem to understand that the old vertical model of the
mobile telecommunications industry (manufacturer to carrier to subscriber) has
gone away, perhaps forever. Their response, however, is to try do do everything.
And they can't - not if they are going to remain a credible supplier to carriers
who are desperately trying to reinvent their businesses, and not if they are
going to satisfy the needs of an increasingly demanding group of
users.
What Nokia needs to do if it
hopes to retain its market share leadership, its profits, and indeed to continue
to exist is to make some hard choices. It needs to cede significant chunks of
the value chain and focus on a few that it can do really well and quite
profitably.
This is especially the
case in China. One of the reasons the government and industry are paying
attention to mobile telecoms now is that they see the horizontalization of the industry as a huge
opportunity for not-so-large Chinese enterprises to begin building global
businesses in the niches that are opening up as the model
matures.
Which brings us back to
today's news - how smart of them to agree to use some Microsoft technology
rather than keep trying to reinvent the wheel. One almost sees
hope.
Unfortunately, Mary McDowell, head of Nokia's enterprise
division, chimes in and says "It doesn't mean swords have been turned into
plowshares," meaning that the war with Microsoft will continue on most other
fronts.
No, folks, unfortunately for
Nokia fans and shareholders everywhere, the Finnish Navel-Gazers are no closer
to recognizing the mistakes in their approach to the business now than they were
a year ago.
Short Nokia.
Posted at 12:42 PM
Mon - February 14, 2005
Games in for a Rough Ride in China
In The Hutong,
Supercomputing
The Chinese government's recently issued list of
50 banned video and computer games is going to
grow, and I wouldn't rule out the possibility of more aggressive moves against
this genre of entertainment.
The
problem with games goes beyond this current banning, which primarily content and
anti-piracy focused. (I mean, come on - anybody who has played Command &
Conquer: Generals can understand why the content nannies in the Beijing
government might have a tiny problem with
it.)
The real problem is that there is
a growing sentiment in the market among parents, teachers, policymakers, and
journalists that games are little more than an addictive, anti-social form of
time wastage, like gambling without the cash, and that they have no redeeming
social value. This sort of perception makes it difficult to build any kind of
opposition to these sorts of administrative action, and they make the lives of
game manufacturers uncomfortable.
The
industry can either say "hey - parents, teachers, and policymakers: bite my game
controller," and deal with the results of that kind of approach, or they can
take a more proactive approach to improve the image of gaming among those
groups.
Guaranteed, if the industry
DOESN'T do anything, these problems will grow. Soon.
You read it here first.
Posted at 02:36 PM
Catch The Village Grouch's New Blog
Bunkerbound in the
Hutong
Valentine's Day
Check out Steve Schwankert's new Village Grouch blog.
Steve is the nearest thing we have to
John Dvorak in Asia, and his well deserved reputation for brilliantly
articulating what is on the minds of techies and users is
legend.
Welcome to the Blog Party,
Grouch.
Posted at 12:23 PM
Fri - February 11, 2005
Salespeople In Short Supply in China
In the
Hutong
Watching the Sun
Set
This article on Xinhuanet
notes that salespersons are the most wanted professionals in China.
Extending that logic, clearly companies are recognizing the value of an
effective sales force.
No brainer of
the week:
CRM and sales-force
automation (SFA) companies take note: they're this )( close to getting it in the
boardrooms of China, Inc. I would guess 2005 would be a good time to redouble
efforts in the Middle Kingdom. Hmm?
Posted at 05:45 PM
Intellectual Property Circus
In the Hutong.
Chinese New Year. Day 3.
Late Afternoon
The part of me that genuinely believes that Linux
will actually amount to something like a mainstream operating system joined
Penguins the world over celebrating the judicial ass-kicking that SCO took from U.S.
Federal Judge Dale Kimball yesterday for not coughing up any evidence to support
its IPR violation claims so far in its legal action against
IBM.
What increasingly concerns me,
however, is what the Chinese may make of this. Here we are trying to make the
case to the Chinese to protect our intellectual property, even taking it to the
WTO, and at the same time showing them how IPR can be used by a frustrated,
pissant company to stifle the growth and development of an important
technology.
If I were a Chinese
judicial or technology official watching this from afar, I would say "these
sorts of legal piff-paffs are fine for a developed economy, but we cannot afford
to have every opportunist and his brother tying down the development of our most
critical sectors because they think their rights have been violated."
And even though that's obviously a
single-factor view of the issue, it has its points for China.
Posted at 05:34 PM
You'll be happy to know...
In The Hutong, Prior to Sunset on
Friday
While I am professionally constrained from making
any form of comment about the departure of Carly Fiorina from H-P, I will say
that I had a good laugh at this Dow
Jones piece quoting Kevin Rollins suggesting that there was "probably"
an opportunity for Dell in the H-P turmoil.
In other words, we can't really see
one, but now that you mention it, we'll do all we can to sow fear, uncertainty,
and doubt in the marketplace, and thanks for your
help.
Not that it will make any
difference here. As far as consumers are concerned in China, Dell is in headlong
retreat, regardless of their worldwide market share numbers. And consumer
sentiment tends to be pretty catching in these parts.
Posted at 05:20 PM
Sat
- January 22, 2005
Digital Times 18 January 05
The PowerPoint Chamber, Swissotel
Beijing
Article in Korea's
Digital
Times from the 18th of January. Talking about
mobile comms in China. If anybody has a link to this, I'd prefer to run the link
rather than a photocopy of the
article.
Though I love the
mugshot.
Posted at 02:02 PM
Street Fighting in the Hutong
In the Bunker
Been out of it for a while. The book is starting
to take up lots of time. Some good news coming next week on a related
front.
Posted at 09:12 AM
A Dragon Not Ready to Fly
Wharton, Leader of Large Lemmings?
Wharton's Take on IBM-Lenovo Deal: Out of Touch
The Air China IPO: A Little Perspective, Please
China's Tech Firms and Africa
UPS Success Depends on Ending Customs/China Post Axis
NOK NOK. Anybody home? More Empty Offices in the Glass House in
Espoo
Memo to Tom Ridge: Thanks, really, but fix the bloody visa approval
problem. Now.
A Subsidy by Any Other Name
Richard Edelman tells PR people "blog on, dudes."
Third Ring Road from the Silicon Hutong Suite, China World Tower 2
More Capital: Just What China's Securities Markets Don't Need
Television Powershift from Hollywood to Redmond? Somebody PLEASE wake up
Bill before he hurts himself...
Business Week Prognosticates, Dvorak Preens.
FedEx: How Green is my China?
The Coming China AgTech Boom
Wow. WSJ agrees with Silicon Hutong about Big Oil
China Radio International Gets Greedy; Branson says "Sod Off"
Big Oil Can say "No" to China
Would you buy a used stock from this man?
The Monster Screams for Coder Meat
Nokia's Advertising
Sony's Makeover
Wolves Howl the Song of Doom for Nokia
Busting the China Tobacco Monopolies: Open Market or Open Season
Jiang, Taiwan, and the World
Beyond Intellectual Property: The Counterfeit Dilemna
China and the Pentagon's New Map
Shrimp Joins Steel as a Sino-U.S. Irritant
Protectile Dysfunction
Review: The Man Who Stayed Behind
Deep, Deep in the Hutong
Just finished
The Man Who Stayed
Behind
by Sidney Rittemberg and Amanda Bennett. The book is an account of
Rittenberg's 35 years in China, first as a U.S. Army translator in World War II,
then as a U.N. Relief official, and finally, from 1947, as the only American
citizen to serve as a member of the Chinese Communist Party. After the
communists took China in 1949, Rittenberg chose to remain in China, rising in 16
years from a translator at Radio Beijing to - briefly, during the Cultural
Revolution - head of China's Broadcast Administration. He was imprisoned twice,
once for over six years, once for nearly ten.
The one question I asked myself when I finished was "why the hell didn't I read this sooner?"
Honest Insights
As personal histories go, this one is exceptionally easy to read and enjoyable, due I am sure in no small part to Bennett's contribution, but also because Rittenberg's story itself is so engrossing and painfully, blisteringly honest. The very idea of an American at the heart of China's revolutionary maelstrom is remarkable. The insights and context he is able to put on those events easily rivals in importance the better known works of Harrison Salisbury et al.
But that is almost the least of the book's merits. In the spirit of the self-criticisms he and all party members had to endure, Rittenberg does a brilliant job at avoiding hindsight, instead taking us on a journey as much mental, emotional, and spiritual as it was geographic, ideologic, and historical. The insight into the mind of a man who could first buy into the promise of Marxist-Leninist-Maoist thought, then subjugate his ego and his conscience to the cause of revolution by itself makes the book worth reading.
We come away from the book understanding, as Rittenberg did, that the Chinese revolution deserves neither to be idealized or demonized. Great horrors were committed in the name of the revolution, to be sure, but China has indeed come a long way since 1949, and we see through his eyes - and are able to juxtapose - the suffering in the neo-feudal chaos that was Republican China before 1949, and the murderous excesses committed since.
Rittenberg could probably get away with passing final judgment on China, but he does not, and the book is better for it. He strives instead to put us behind his eyes through the whole experience, good and ill, and let us judge for ourselves.
It is customary for a reviewer to look for flaws in a book, but to do so in this case would be picking nits. The book does not pretend to be more than it is - an honest memoir of somebody who was there and saw it all. Rittenberg makes no excuses for himself and his behavior - and he comes out in most respects looking no better or worse than those around him.
The book is no substitute for a more academic history of the period, and there is nor shortage of either histories or biographies to provide a broader canvas, more context, or greater analysis. And frankly, the more background the reader has in modern Chinese history the greater the value of this read.
Key Takeaways
I walked away understanding two things: first, there is no excuse, even for those of us who profess to care about China and its people, to either apologize for or vilify the country or the party. Only a balanced perspective on either will give us perspectives on how to help China evolve as a nation. If Rittenberg can avoid those tracks, so should we.
Second, China's modern history has in its background a constant tug-of-war between internationalism and xenophobia. In most cases, those conflicts are represented by people who are more one or the other: the foreign-hating Empress Dowager vs. her nephew, the Kuangxu Emperor; Yuan Shikai vs. Sun Yat-sen; Mao Zedong vs. Zhou Enlai, and even Li Peng vs. Zhu Rongji. But as The Man Who Stayed Behind points out, that's an over simplified understanding of the battle. Rittenberg subtly reminds every non-Chinese who lives in or deals with the People's Republic that China and its people have a schizophrenic love/hate relationship with things and people foreign, and that they seem fated to eternally swing between the two extremes.
If such insights put long-range goals and long-term investments in China in a starker light, That's probably a very, very good thing.
A must-read.
The one question I asked myself when I finished was "why the hell didn't I read this sooner?"
Honest Insights
As personal histories go, this one is exceptionally easy to read and enjoyable, due I am sure in no small part to Bennett's contribution, but also because Rittenberg's story itself is so engrossing and painfully, blisteringly honest. The very idea of an American at the heart of China's revolutionary maelstrom is remarkable. The insights and context he is able to put on those events easily rivals in importance the better known works of Harrison Salisbury et al.
But that is almost the least of the book's merits. In the spirit of the self-criticisms he and all party members had to endure, Rittenberg does a brilliant job at avoiding hindsight, instead taking us on a journey as much mental, emotional, and spiritual as it was geographic, ideologic, and historical. The insight into the mind of a man who could first buy into the promise of Marxist-Leninist-Maoist thought, then subjugate his ego and his conscience to the cause of revolution by itself makes the book worth reading.
We come away from the book understanding, as Rittenberg did, that the Chinese revolution deserves neither to be idealized or demonized. Great horrors were committed in the name of the revolution, to be sure, but China has indeed come a long way since 1949, and we see through his eyes - and are able to juxtapose - the suffering in the neo-feudal chaos that was Republican China before 1949, and the murderous excesses committed since.
Rittenberg could probably get away with passing final judgment on China, but he does not, and the book is better for it. He strives instead to put us behind his eyes through the whole experience, good and ill, and let us judge for ourselves.
It is customary for a reviewer to look for flaws in a book, but to do so in this case would be picking nits. The book does not pretend to be more than it is - an honest memoir of somebody who was there and saw it all. Rittenberg makes no excuses for himself and his behavior - and he comes out in most respects looking no better or worse than those around him.
The book is no substitute for a more academic history of the period, and there is nor shortage of either histories or biographies to provide a broader canvas, more context, or greater analysis. And frankly, the more background the reader has in modern Chinese history the greater the value of this read.
Key Takeaways
I walked away understanding two things: first, there is no excuse, even for those of us who profess to care about China and its people, to either apologize for or vilify the country or the party. Only a balanced perspective on either will give us perspectives on how to help China evolve as a nation. If Rittenberg can avoid those tracks, so should we.
Second, China's modern history has in its background a constant tug-of-war between internationalism and xenophobia. In most cases, those conflicts are represented by people who are more one or the other: the foreign-hating Empress Dowager vs. her nephew, the Kuangxu Emperor; Yuan Shikai vs. Sun Yat-sen; Mao Zedong vs. Zhou Enlai, and even Li Peng vs. Zhu Rongji. But as The Man Who Stayed Behind points out, that's an over simplified understanding of the battle. Rittenberg subtly reminds every non-Chinese who lives in or deals with the People's Republic that China and its people have a schizophrenic love/hate relationship with things and people foreign, and that they seem fated to eternally swing between the two extremes.
If such insights put long-range goals and long-term investments in China in a starker light, That's probably a very, very good thing.
A must-read.
Posted at 09:22 PM
Nokia's Grand Strategy: China. Silicon Hutong's Verdict: Ollila's Waterloo
In the Silicon Hutong Command Post,
Shunyi
Jorma Olilla, prancing around China in a fit of
self congratulation that Nokia has managed to be in business in China for 20
years (and please explain why anyone NOT on Nokia's payroll should care?), is
promising his shareholders two
things:
1. No more price cuts this year; and
2. Sales growth in China is the key to the company's future.
There's a ton of coverage on this, a good example being Alan McEwen's piece in the Scotsman, one of the few article I've seen that is not either a) a dutiful reproduction of Nokia's press release, or b) a re-print of the Reuters wire story.
There are a couple of problems with both parts of that strategy.
No More Price Cuts? Check Mr. Ollila's Medications, Please
Jorma admits that price reductions in the industry are going to continue driven by increased competition. He maintains that Nokia will not reduce prices and yet will grow 25% faster than the rest of the industry because Nokia will be focusing on high-end phones.
That's fine, but how does that explain how Nokia will grow faster than the rest of the industry and grow market share without matching price cuts at the low-end and mid-range, where the majority of sales take place?
Answer: it doesn't. Nokia will still be in a price war at the low end, because at that level consumers are focused on price, and if Nokia won't match falling prices, it won't sell. Their only hope at the low end is market share domination that will allow them to squeeze competitors through superior economies of scale. Want to maintain market share? Cut your price.
Pressure at the mid-range won't be quite as intense, but let's understand something: there is little evidence to suggest that consumers are going to stop looking for the best combination of price and relevant features. While there is some brand premium in this segment, it won't hold up if prices drop precipitously in this region.
China is the Future? Be Afraid...
Nowhere in the world is pricing pressure more intense than in China. Local manufacturers - and there are close to 20 of them now, not counting those doing exclusively contract assembly - continue to drive prices down. And they're not doing it for fun - they're doing it because they have to.
Which brings us to the core of Nokia's strategy to drive growth in China - break out of the major cities and into the lower-tier cities and rural areas. These are regions where the competition is strongest, where the price pressure is the highest, and where Nokia and its global pedigree mean the least. Taking market share in these regions is going to be about cutting price.
The news gets worse. Prices in the mid- and upper range are dropping rapidly as well, and China's carriers are starting to pressure Nokia for special treatment, like coming up with exclusive models with distinct software and hardware. Interesting as this sounds, this will increase Nokia's costs, and you can bet the operators will be cutting the same deals with everyone, neutralizing the marginal value of the deal and squeezing profits even further in the critical mid-range.
China's dirty little secret is how bloody small the high-end is. So don't count on the high end.
Expect 3G to be the savior for margins? Think again. Most experts see the potential of a $50 retail price on a color W-CDMA phone within 12-18 months, driven in no small part by Chinese manufacturers, and possibly even a sub-$30 GSM phone in China.
So Nokia doesn't want to cut prices, but it's primary growth in its most important market is going to require extreme pricing competition.
Hello...?
This kind of unconscionable denial is why Nokia's troubles are just beginning, and will not end until the company wakes up, discards Ollila, and navigates itself onto a course that is more in keeping with the current realities of the industry, rather than those of ten years ago.
1. No more price cuts this year; and
2. Sales growth in China is the key to the company's future.
There's a ton of coverage on this, a good example being Alan McEwen's piece in the Scotsman, one of the few article I've seen that is not either a) a dutiful reproduction of Nokia's press release, or b) a re-print of the Reuters wire story.
There are a couple of problems with both parts of that strategy.
No More Price Cuts? Check Mr. Ollila's Medications, Please
Jorma admits that price reductions in the industry are going to continue driven by increased competition. He maintains that Nokia will not reduce prices and yet will grow 25% faster than the rest of the industry because Nokia will be focusing on high-end phones.
That's fine, but how does that explain how Nokia will grow faster than the rest of the industry and grow market share without matching price cuts at the low-end and mid-range, where the majority of sales take place?
Answer: it doesn't. Nokia will still be in a price war at the low end, because at that level consumers are focused on price, and if Nokia won't match falling prices, it won't sell. Their only hope at the low end is market share domination that will allow them to squeeze competitors through superior economies of scale. Want to maintain market share? Cut your price.
Pressure at the mid-range won't be quite as intense, but let's understand something: there is little evidence to suggest that consumers are going to stop looking for the best combination of price and relevant features. While there is some brand premium in this segment, it won't hold up if prices drop precipitously in this region.
China is the Future? Be Afraid...
Nowhere in the world is pricing pressure more intense than in China. Local manufacturers - and there are close to 20 of them now, not counting those doing exclusively contract assembly - continue to drive prices down. And they're not doing it for fun - they're doing it because they have to.
Which brings us to the core of Nokia's strategy to drive growth in China - break out of the major cities and into the lower-tier cities and rural areas. These are regions where the competition is strongest, where the price pressure is the highest, and where Nokia and its global pedigree mean the least. Taking market share in these regions is going to be about cutting price.
The news gets worse. Prices in the mid- and upper range are dropping rapidly as well, and China's carriers are starting to pressure Nokia for special treatment, like coming up with exclusive models with distinct software and hardware. Interesting as this sounds, this will increase Nokia's costs, and you can bet the operators will be cutting the same deals with everyone, neutralizing the marginal value of the deal and squeezing profits even further in the critical mid-range.
China's dirty little secret is how bloody small the high-end is. So don't count on the high end.
Expect 3G to be the savior for margins? Think again. Most experts see the potential of a $50 retail price on a color W-CDMA phone within 12-18 months, driven in no small part by Chinese manufacturers, and possibly even a sub-$30 GSM phone in China.
So Nokia doesn't want to cut prices, but it's primary growth in its most important market is going to require extreme pricing competition.
Hello...?
This kind of unconscionable denial is why Nokia's troubles are just beginning, and will not end until the company wakes up, discards Ollila, and navigates itself onto a course that is more in keeping with the current realities of the industry, rather than those of ten years ago.
Posted at 02:33 PM
Thu - February 17, 2005
The U.S. Patent System is Broken. One Wonders about China
The War
Room
Silicon Hutong Plaza
Silicon Hutong Plaza
In an outstanding article in IEEE Spectrum in
December, Adam Jaffe, Dean of Arts and Sciences at
Brandeis University, and Josh Lerner, a professor at Harvard Business
School, explained in pithy, easy-to-understand terms why something is horribly
wrong with the U.S.
Patent System. So sick is this system, it appears, that we are on the
verge of enabling the tort bar to all but strangle a hell of a lot of day to day
business in America, and an even larger chunk of
innovation.
Having just finished the article, I am navigating with great haste to Amazon to order their book Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What To Do About It.
What is bothering me so much is NOT that the world's largest and most respected system of intellectual property protection is broken - stuff breaks all the time, and the Master of the Universe has given us the wherewithal to fix things like this.
What is deeply disturbing when you read this is: if this is how messed up the best system in the world is, how much worse is the system here in China? I mean, every abuse of the system taking place in the U.S., where small companies are being bullied by giant firms with lots of lawyers and some patents, could happen here - and worse. Not only is there no decent system of enforcing patent judgements, there is no independent judiciary to try cases of patent abuse and to protect small innovators.
People look around China and they see big companies like Lenovo and they think "look, China has a robust tech sector."
Ugly truth #45: until China has a system that enforces intellectual property rights and an independent judiciary to ensure that those rights are used in an effort to sustain a system that encourages innovation, China's tech sector will continue to be about knock-offs, copycats, and other such derivative effort that simply seeks to steal somebody else's idea and sell it for less money.
There are, and will always be, exceptions to this, but they will be notable in that they buck - not represent - the broader national trend.
Having just finished the article, I am navigating with great haste to Amazon to order their book Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What To Do About It.
What is bothering me so much is NOT that the world's largest and most respected system of intellectual property protection is broken - stuff breaks all the time, and the Master of the Universe has given us the wherewithal to fix things like this.
What is deeply disturbing when you read this is: if this is how messed up the best system in the world is, how much worse is the system here in China? I mean, every abuse of the system taking place in the U.S., where small companies are being bullied by giant firms with lots of lawyers and some patents, could happen here - and worse. Not only is there no decent system of enforcing patent judgements, there is no independent judiciary to try cases of patent abuse and to protect small innovators.
People look around China and they see big companies like Lenovo and they think "look, China has a robust tech sector."
Ugly truth #45: until China has a system that enforces intellectual property rights and an independent judiciary to ensure that those rights are used in an effort to sustain a system that encourages innovation, China's tech sector will continue to be about knock-offs, copycats, and other such derivative effort that simply seeks to steal somebody else's idea and sell it for less money.
There are, and will always be, exceptions to this, but they will be notable in that they buck - not represent - the broader national trend.
Posted at 02:37 PM
Tue - February 15, 2005
In A Land Full of People, Not Enough People
Snow Desk in the Hutong
One thing we're hearing more and more of in the
Hutong is how China is still not turning out enough people with the right kinds
of skills to support high-tech industries. Most recent example of this was in
today's Wall Street Journal, in a big page one article about how Baguio, in
northern Luzon in the Philippines, is somehow a better place to assemble and
test semiconductors than China.
Of course, Intel would probably beg to differ, given that they are well along the way in building their second assemble and test facility in China.
I'd have to agree that the toughest damned thing to find in China today is good local managerial talent. Oh, sure, you can find folks from Taiwan, Hong Kong, and a host of returnees. But for a whole lot of reasons these guys aren't the best solution to the management problem.
This issue also plagues China on the outsourcing and offshoring front. The country is finding it increasingly difficult to compete with other Asian nations when the need is for quality - not quantity - human resources. And if China is going to capitalize on its huge population, the nation needs to be able to field a growing skilled workforce, rather than try to keep winning investment and business on the basis of cheap labor.
Of course, Intel would probably beg to differ, given that they are well along the way in building their second assemble and test facility in China.
I'd have to agree that the toughest damned thing to find in China today is good local managerial talent. Oh, sure, you can find folks from Taiwan, Hong Kong, and a host of returnees. But for a whole lot of reasons these guys aren't the best solution to the management problem.
This issue also plagues China on the outsourcing and offshoring front. The country is finding it increasingly difficult to compete with other Asian nations when the need is for quality - not quantity - human resources. And if China is going to capitalize on its huge population, the nation needs to be able to field a growing skilled workforce, rather than try to keep winning investment and business on the basis of cheap labor.
Posted at 02:01 PM
Nokia in Trouble: One Less Enemy? Guess again...
In the Hutong under half a foot of
snow
So Nokia seems to toss up a white flag in its holy wars,
agreeing to license Microsoft e-mail and music software for use in some of its
phones. Viewed alone, one would see this as a smart move for Nokia. One of the
core "challenges" facing the Espooians is that in attempting to own the industry
standard at each link in an ever-lengthening value chain, they are in severe
danger of both spreading their resources too thin, and of winding up with a
bunch of expensively-wrought technologies that, when compared to the
competition, are third-rate at best.
I empathize with Nokia, even though I lambaste them, because I understand what it must be like to go from being the dominant handset, base station, software, and technology supplier to an industry to finding one's entire business model turned on its ear.
The Boys in the Glass House seem to understand that the old vertical model of the mobile telecommunications industry (manufacturer to carrier to subscriber) has gone away, perhaps forever. Their response, however, is to try do do everything. And they can't - not if they are going to remain a credible supplier to carriers who are desperately trying to reinvent their businesses, and not if they are going to satisfy the needs of an increasingly demanding group of users.
What Nokia needs to do if it hopes to retain its market share leadership, its profits, and indeed to continue to exist is to make some hard choices. It needs to cede significant chunks of the value chain and focus on a few that it can do really well and quite profitably.
This is especially the case in China. One of the reasons the government and industry are paying attention to mobile telecoms now is that they see the horizontalization of the industry as a huge opportunity for not-so-large Chinese enterprises to begin building global businesses in the niches that are opening up as the model matures.
Which brings us back to today's news - how smart of them to agree to use some Microsoft technology rather than keep trying to reinvent the wheel. One almost sees hope.
Unfortunately, Mary McDowell, head of Nokia's enterprise division, chimes in and says "It doesn't mean swords have been turned into plowshares," meaning that the war with Microsoft will continue on most other fronts.
No, folks, unfortunately for Nokia fans and shareholders everywhere, the Finnish Navel-Gazers are no closer to recognizing the mistakes in their approach to the business now than they were a year ago.
Short Nokia.
I empathize with Nokia, even though I lambaste them, because I understand what it must be like to go from being the dominant handset, base station, software, and technology supplier to an industry to finding one's entire business model turned on its ear.
The Boys in the Glass House seem to understand that the old vertical model of the mobile telecommunications industry (manufacturer to carrier to subscriber) has gone away, perhaps forever. Their response, however, is to try do do everything. And they can't - not if they are going to remain a credible supplier to carriers who are desperately trying to reinvent their businesses, and not if they are going to satisfy the needs of an increasingly demanding group of users.
What Nokia needs to do if it hopes to retain its market share leadership, its profits, and indeed to continue to exist is to make some hard choices. It needs to cede significant chunks of the value chain and focus on a few that it can do really well and quite profitably.
This is especially the case in China. One of the reasons the government and industry are paying attention to mobile telecoms now is that they see the horizontalization of the industry as a huge opportunity for not-so-large Chinese enterprises to begin building global businesses in the niches that are opening up as the model matures.
Which brings us back to today's news - how smart of them to agree to use some Microsoft technology rather than keep trying to reinvent the wheel. One almost sees hope.
Unfortunately, Mary McDowell, head of Nokia's enterprise division, chimes in and says "It doesn't mean swords have been turned into plowshares," meaning that the war with Microsoft will continue on most other fronts.
No, folks, unfortunately for Nokia fans and shareholders everywhere, the Finnish Navel-Gazers are no closer to recognizing the mistakes in their approach to the business now than they were a year ago.
Short Nokia.
Posted at 12:42 PM
Mon - February 14, 2005
Games in for a Rough Ride in China
In The Hutong,
Supercomputing
The Chinese government's recently issued list of
50 banned video and computer games is going to
grow, and I wouldn't rule out the possibility of more aggressive moves against
this genre of entertainment.
The problem with games goes beyond this current banning, which primarily content and anti-piracy focused. (I mean, come on - anybody who has played Command & Conquer: Generals can understand why the content nannies in the Beijing government might have a tiny problem with it.)
The real problem is that there is a growing sentiment in the market among parents, teachers, policymakers, and journalists that games are little more than an addictive, anti-social form of time wastage, like gambling without the cash, and that they have no redeeming social value. This sort of perception makes it difficult to build any kind of opposition to these sorts of administrative action, and they make the lives of game manufacturers uncomfortable.
The industry can either say "hey - parents, teachers, and policymakers: bite my game controller," and deal with the results of that kind of approach, or they can take a more proactive approach to improve the image of gaming among those groups.
Guaranteed, if the industry DOESN'T do anything, these problems will grow. Soon.
You read it here first.
The problem with games goes beyond this current banning, which primarily content and anti-piracy focused. (I mean, come on - anybody who has played Command & Conquer: Generals can understand why the content nannies in the Beijing government might have a tiny problem with it.)
The real problem is that there is a growing sentiment in the market among parents, teachers, policymakers, and journalists that games are little more than an addictive, anti-social form of time wastage, like gambling without the cash, and that they have no redeeming social value. This sort of perception makes it difficult to build any kind of opposition to these sorts of administrative action, and they make the lives of game manufacturers uncomfortable.
The industry can either say "hey - parents, teachers, and policymakers: bite my game controller," and deal with the results of that kind of approach, or they can take a more proactive approach to improve the image of gaming among those groups.
Guaranteed, if the industry DOESN'T do anything, these problems will grow. Soon.
You read it here first.
Posted at 02:36 PM
Catch The Village Grouch's New Blog
Bunkerbound in the
Hutong
Valentine's Day
Valentine's Day
Check out Steve Schwankert's new Village Grouch blog.
Steve is the nearest thing we have to John Dvorak in Asia, and his well deserved reputation for brilliantly articulating what is on the minds of techies and users is legend.
Welcome to the Blog Party, Grouch.
Steve is the nearest thing we have to John Dvorak in Asia, and his well deserved reputation for brilliantly articulating what is on the minds of techies and users is legend.
Welcome to the Blog Party, Grouch.
Posted at 12:23 PM
Fri - February 11, 2005
Salespeople In Short Supply in China
In the
Hutong
Watching the Sun Set
Watching the Sun Set
This article on Xinhuanet
notes that salespersons are the most wanted professionals in China.
Extending that logic, clearly companies are recognizing the value of an
effective sales force.
No brainer of the week:
CRM and sales-force automation (SFA) companies take note: they're this )( close to getting it in the boardrooms of China, Inc. I would guess 2005 would be a good time to redouble efforts in the Middle Kingdom. Hmm?
No brainer of the week:
CRM and sales-force automation (SFA) companies take note: they're this )( close to getting it in the boardrooms of China, Inc. I would guess 2005 would be a good time to redouble efforts in the Middle Kingdom. Hmm?
Posted at 05:45 PM
Intellectual Property Circus
In the Hutong.
Chinese New Year. Day 3.
Late Afternoon
Chinese New Year. Day 3.
Late Afternoon
The part of me that genuinely believes that Linux
will actually amount to something like a mainstream operating system joined
Penguins the world over celebrating the judicial ass-kicking that SCO took from U.S.
Federal Judge Dale Kimball yesterday for not coughing up any evidence to support
its IPR violation claims so far in its legal action against
IBM.
What increasingly concerns me, however, is what the Chinese may make of this. Here we are trying to make the case to the Chinese to protect our intellectual property, even taking it to the WTO, and at the same time showing them how IPR can be used by a frustrated, pissant company to stifle the growth and development of an important technology.
If I were a Chinese judicial or technology official watching this from afar, I would say "these sorts of legal piff-paffs are fine for a developed economy, but we cannot afford to have every opportunist and his brother tying down the development of our most critical sectors because they think their rights have been violated."
And even though that's obviously a single-factor view of the issue, it has its points for China.
What increasingly concerns me, however, is what the Chinese may make of this. Here we are trying to make the case to the Chinese to protect our intellectual property, even taking it to the WTO, and at the same time showing them how IPR can be used by a frustrated, pissant company to stifle the growth and development of an important technology.
If I were a Chinese judicial or technology official watching this from afar, I would say "these sorts of legal piff-paffs are fine for a developed economy, but we cannot afford to have every opportunist and his brother tying down the development of our most critical sectors because they think their rights have been violated."
And even though that's obviously a single-factor view of the issue, it has its points for China.
Posted at 05:34 PM
You'll be happy to know...
In The Hutong, Prior to Sunset on
Friday
While I am professionally constrained from making
any form of comment about the departure of Carly Fiorina from H-P, I will say
that I had a good laugh at this Dow
Jones piece quoting Kevin Rollins suggesting that there was "probably"
an opportunity for Dell in the H-P turmoil.
In other words, we can't really see one, but now that you mention it, we'll do all we can to sow fear, uncertainty, and doubt in the marketplace, and thanks for your help.
Not that it will make any difference here. As far as consumers are concerned in China, Dell is in headlong retreat, regardless of their worldwide market share numbers. And consumer sentiment tends to be pretty catching in these parts.
In other words, we can't really see one, but now that you mention it, we'll do all we can to sow fear, uncertainty, and doubt in the marketplace, and thanks for your help.
Not that it will make any difference here. As far as consumers are concerned in China, Dell is in headlong retreat, regardless of their worldwide market share numbers. And consumer sentiment tends to be pretty catching in these parts.
Posted at 05:20 PM
Sat
- January 22, 2005
Digital Times 18 January 05
The PowerPoint Chamber, Swissotel
Beijing
Article in Korea's
Digital
Times from the 18th of January. Talking about
mobile comms in China. If anybody has a link to this, I'd prefer to run the link
rather than a photocopy of the
article.
Though I love the
mugshot.
Posted at 02:02 PM
Street Fighting in the Hutong
In the Bunker
Been out of it for a while. The book is starting
to take up lots of time. Some good news coming next week on a related
front.
Posted at 09:12 AM
A Dragon Not Ready to Fly
Wharton, Leader of Large Lemmings?
Wharton's Take on IBM-Lenovo Deal: Out of Touch
The Air China IPO: A Little Perspective, Please
China's Tech Firms and Africa
UPS Success Depends on Ending Customs/China Post Axis
NOK NOK. Anybody home? More Empty Offices in the Glass House in
Espoo
Memo to Tom Ridge: Thanks, really, but fix the bloody visa approval
problem. Now.
A Subsidy by Any Other Name
Richard Edelman tells PR people "blog on, dudes."
Third Ring Road from the Silicon Hutong Suite, China World Tower 2
More Capital: Just What China's Securities Markets Don't Need
Television Powershift from Hollywood to Redmond? Somebody PLEASE wake up
Bill before he hurts himself...
Business Week Prognosticates, Dvorak Preens.
FedEx: How Green is my China?
The Coming China AgTech Boom
Wow. WSJ agrees with Silicon Hutong about Big Oil
China Radio International Gets Greedy; Branson says "Sod Off"
Big Oil Can say "No" to China
Would you buy a used stock from this man?
The Monster Screams for Coder Meat
Nokia's Advertising
Sony's Makeover
Wolves Howl the Song of Doom for Nokia
Busting the China Tobacco Monopolies: Open Market or Open Season
Jiang, Taiwan, and the World
Beyond Intellectual Property: The Counterfeit Dilemna
China and the Pentagon's New Map
Shrimp Joins Steel as a Sino-U.S. Irritant
Protectile Dysfunction
Digital Times 18 January 05
The PowerPoint Chamber, Swissotel
Beijing
Article in Korea's
Digital
Times from the 18th of January. Talking about
mobile comms in China. If anybody has a link to this, I'd prefer to run the link
rather than a photocopy of the
article.
Though I love the mugshot.
Though I love the mugshot.
Posted at 02:02 PM
Street Fighting in the Hutong
In the Bunker
Been out of it for a while. The book is starting
to take up lots of time. Some good news coming next week on a related
front.
Posted at 09:12 AM
Wharton, Leader of Large Lemmings?
Wharton's Take on IBM-Lenovo Deal: Out of Touch
The Air China IPO: A Little Perspective, Please
China's Tech Firms and Africa
UPS Success Depends on Ending Customs/China Post Axis
NOK NOK. Anybody home? More Empty Offices in the Glass House in Espoo
Memo to Tom Ridge: Thanks, really, but fix the bloody visa approval problem. Now.
A Subsidy by Any Other Name
Richard Edelman tells PR people "blog on, dudes."
Third Ring Road from the Silicon Hutong Suite, China World Tower 2
More Capital: Just What China's Securities Markets Don't Need
Television Powershift from Hollywood to Redmond? Somebody PLEASE wake up Bill before he hurts himself...
Business Week Prognosticates, Dvorak Preens.
FedEx: How Green is my China?
The Coming China AgTech Boom
Wow. WSJ agrees with Silicon Hutong about Big Oil
China Radio International Gets Greedy; Branson says "Sod Off"
Big Oil Can say "No" to China
Would you buy a used stock from this man?
The Monster Screams for Coder Meat
Nokia's Advertising
Sony's Makeover
Wolves Howl the Song of Doom for Nokia
Busting the China Tobacco Monopolies: Open Market or Open Season
Jiang, Taiwan, and the World
Beyond Intellectual Property: The Counterfeit Dilemna
China and the Pentagon's New Map
Shrimp Joins Steel as a Sino-U.S. Irritant
Protectile Dysfunction
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Published On: May 07, 2005 11:57 PM
Published On: May 07, 2005 11:57 PM