Wireless China

Matei Mihalca writes in his Business Standard column:

China has over 300 million mobile users. This user base is providing a foundation for China to enter a variety of segments of the mobile communications industry.

A cluster is emerging, driven by massive end-demand. Taiwan developed a cluster in the 1980s and 1990s based on PC-related demand, but much of the value resided elsewhere (in Intel chips and Microsoft software). A similar process is underway in China in wireless, but this time there is an opportunity to capture more of the value.

China’s mobile subscribers fall into several categories: a majority use GSM, the European standard; some use CDMA, Qualcomm’s technology; and a few PHS, a standard originated in Japan.

China Mobile is the largest carrier and it uses GSM; ranked second, China Unicom uses both GSM and CDMA. Fixed-line operators China Telecom and China Netcom entered the mobility field late, a bit like Reliance in India, via PHS, which is a wireless local loop (WLL) technology.

The role PHS has played in China is not unlike that WiFi may play in developed Western markets. PHS’s success has been shrouded with uncertainty, but it’s hard to argue with 30 million users at the end of 2003, and perhaps double that figure by the end of this year.

China’s equipment makers fall into similar categories, each one stronger in one particular technology. The largest, Huawei, has been a supplier of GSM systems, primarily to China Mobile. The second largest, ZTE, has been more active in CDMA, supplying Unicom.

Gradually, a virtuous cycle is appearing: China’s mobile users create demand which domestic equipment makers meet; in turn, the equipment makers need parts, which they source locally.

As more companies in this cluster go public (China Netcom and ZTE are also planning IPOs), the sector becomes more attractive overall. That’s because fund managers and analysts will be able to deploy their industry knowledge across a broader spectrum of companies. They’ll also be able to corroborate data across the value chain.

In turn, this will help companies in the cluster secure access to capital. At the same time, the cluster will expand beyond China. The Chinese wireless industry is a unique model the country will increasingly export to other parts of the world.

India needs a similar cluster philosophy for software products.

HP's 4-User PCs

Slashdot writes about HP's efforts in Africa: "HP are supplying their low-cost multi-user 441 desktops to African schools. Running Mandrake Linux, and sporting four screens (1xTNT2 AGP, 3xTNT2 PCI), keyboards and mice (1 PS2 set, 3 USB sets) they provide relatively cheap computer access for up to four users (of particular interest to schools in low economic zones). However, according to this article on New Zealand's Xtra news page they've only manufactured enough to outfit schools in South Africa. HP has commented that they're talking to several organisations and are hoping to bring the PC to market in other regions but have stated they will only be marketed to developing countries."

ARM's Monopoly

News.com writes about "a company that controls more than 80 percent of its segment of the cell phone market and has 40 percent of the digital camera market":

Now that Sony Ericsson has adopted ARM chips for its phones, more than 80 percent of the wireless handsets on the market run on processors based on ARM designs, said Mike Inglis, the company's executive vice president of marketing.

Chips based on the ARM designs have been incorporated into high-definition televisions by four of the five largest digital TV manufacturers. They're being used by several network equipment makers, camera makers and others, and Apple Computer has put them in its iPod.

"Seven hundred-and-eighty million ARM processors were shipped on the planet last year," Inglis said. In Japan, someone came up with a toilet with an integrated ARM-powered MP3 player, while someone else has designed a fireman's glove with a built-in ARM-based walkie-talkie.

A new ARM processor design, code-named Tiger, is expected to come out in silicon in 2006. It should raise handset speeds to 1GHz--well past the speeds available today.

ARM doesn't make the chips--it licenses the designs to Texas Instruments, Intel and other companies, which pay ARM licensing fees and royalties. Despite getting whacked by the chip industry downturn, ARM's revenue and profits are climbing again.

Recently, the company has begun to expand, Intel-like, and colonize components that connect to its processors. It has designed a signal processor that will help compress or decompress data such as video files: The first customer announcement will be made in a few weeks. In addition, ARM-designed graphics chips are set to appear in phones in about a year.

Intranet Design

Jakob Nielsen believes companies can save $5 million a year and achieve 1,000 percent ROI simply by making their intranets more effective. Excerpts from an interview in CIO Insight:

The search on individual Web sites or inside intranets is, typically, still bad. And it's bad in all the different aspects of search. It's usually not unified search—no one search can search everything. This is a particular intranet problem. Things are divided up into different knowledge bases, so you've got to know where to search, and if you need to know where to go to search, then that defeats the entire idea.

The other problem about search is the content, which is to say the individual pages, or units of information, are typically poorly described in terms of things like the headline and the summaries, which is all people have to choose from when they get the search-results listing. So if there was just one thing we could fix on the Web, and for intranets as well, I would say let's fix search; that's still the number one single thing that's causing people problems.

The second thing that's causing the most problems is information architecture, which continues to be driven more by how the information is produced than by how it's consumed. Intranets are usually divided up by which department does which things, as opposed to what tasks employees have, or which work activities people have.

UN-OS as the New OS?

Scoble points to Zane Thomas who is trying to create a new OS:

Existing monolithic operating systems have been made obsolete by advances in hardware capability and continually falling prices, together with advances in programming techniques and networks, both local and wide-area. Instead I advocate for an architecture that has no centralized operating system, hence the un-OS, or UNOS.

The attempt to banish monolithic operating systems is no mere intellectual exercise. There are real, good, reasons to suppose that monopolies such as that currently owned by Microsoft are hindering the evolution of technology. And I see no logic which suggests that replacing Microsoft’s monopoly with some other, such as Linux, or even a situation with a few large players, will make things more than marginally better.

Also, the UNOS provides a solid platform for – and depends intimately upon – a high-performance object-oriented software system. UNOS and UNOS applications consist solely of collections of interacting objects.

TECH TALK: Tech Trends: 6. e-Business

The Internet has become a key ally in doing business, or what Paul Saffo has called, “trading in a world of electrons.” The Internet is impacting many industries – not just the likes of books, music, recruitment and finance, but also more complex ones with deep back-ends like travel, real estate and telecom. The Economist wrote in a recent survey on e-Commerce: “E-commerce is already very big, and it is going to get much bigger. But the actual value of transactions currently concluded online is dwarfed by the extraordinary influence the internet is exerting over purchases carried out in the offline world. That influence is becoming an integral part of e-commerce… A company that neglects its website may be committing commercial suicide. A website is increasingly becoming the gateway to a company's brand, products and services—even if the firm does not sell online.” In India, too, we are seeing an increase in online commerce. The Indian Railways have been at the forefront of this through their online booking website. Jet Airways too has launched e-ticketing. The world of e-business is here in full force.

Back in the late 1990s when the Internet hype was at its peak, the belief was that the Internet would change everything. Every industry would be transformed. If something wasn’t on the Internet, it didn’t exist. Then, reality set in. While the impact of the Internet has not necessarily been earth-shattering, it hasn’t been something to scoff at either. There are many businesses which the Internet has made a difference too. By reducing transaction costs, it has helped consumers get lower prices and forced producers to become more efficient. By bridging geographical barriers, it has allowed companies to open up new markets. Search engines like Google have allowed small businesses to reach out to potential customers far more cost-effectively than other media. Electronic marketplaces like eBay have seen many build businesses around them.

The Economist wrote how the Internet is becoming a key part of the search-find-obtain process for consumers:

What is going on…is arbitrage between different sales channels, says Mohanbir Sawhney, professor of technology at the Kellogg School of Management in Chicago. For instance, someone might use the internet to research digital cameras, but visit a photographic shop for a hands-on demonstration. “I'll think about it,” they will tell the sales assistant. Back home, they will use a search engine to find the lowest price and buy online. In this way, consumers are “deconstructing the purchasing process”, says Professor Sawhney. They are unbundling product information from the transaction itself.

One of the biggest commercial advantages of the internet is a lowering of transaction costs, which usually translates directly into lower prices for the consumer. So, if the lowest prices can be found on the internet and people like the service they get, why would they buy anywhere else?

One reason may be convenience; another, concern about fraud, which poses the biggest threat to online trade. But as long as the internet continues to deliver price and product information quickly, cheaply and securely, e-commerce will continue to grow. Increasingly, companies will have to assume that customers will know exactly where to look for the best buy. This market has the potential to become as perfect as it gets.

As with any new infrastructure technology, it takes time for its full potential to be realised. The Internet is now reaching the stage where it is becoming a utility for many aspects of business, especially in the developed markets. Increasing broadband availability will only accelerate the trend. As the ecosystem around the Internet gets put in place, we are moving closer to the future where e-business and e-commerce become synonymous with business and the commerce, and the “e”-prefix simply disappears.

Tomorrow: The Next Wave

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