Home » Posts tagged 'China' (Page 9)
Tag Archives: China
Hanvon – E-Ink strategic e-reader alliance for price/volume leadership supplementing Hanvon’s premium strategy mostly based on an alliance with Microsoft and Intel
Following the strategic alliance between Marvell, Pixel Qi and OLPC on extremely low-cost consumer devices specially built for the cloud there are other cloud related alliances aimed at mass produced clients with sun readability. One of them is the Hanvon – E-Ink alliance which is the most visible and product-wise the most developed one. Such a strategy is also quite well supplementing Hanvon’s premium strategy which is mostly based on the Microsoft platform. Its cooperation on the new convertible classmate PC design with Intel is also going sharply against the Marvell, Pixel Qi and OLPC effort. Hanvon’s approach is also well aligned with component technology makers (such as Epson Seiko) tightly cooperating with E-Ink to sharply increase the quality and refresh rate of electrophoretic display (EPD) technology in 2011. See the latest update: E Ink and Epson achieve world-leading ePaper resolution [May 23, 2011]
Worth to read along with this: Gartner: media tablets are the new segment next to mobile PCs and desktops, as well as web- and app-capable mobile phones [April 16, 2011]
Regarding E Ink Holdings’ market position see the Undermining E-Ink and single-purpose E-readers [Aug 23, 2010 – Jan 10, 2011] report. What follows here is mostly summarizing Hanvon’s (Hanwang’s) position and future plans/opportunities.
Hanvon turns to e-book reader solutions combining hardware and software [Dec 28]:
As China-based e-book reader maker Hanvon Technology has recently achieved sales over one million units, the company plans to expand its business model from only selling hardware to providing solutions that combine hardware and software, according to an executive of Hanvon.
Hanvon is optimistic about the sales of e-book readers in 2011 and believes the company will have better shipment growth than the market average. However, the company declined to give a forecast.
Sources from upstream component makers also pointed out that despite consumer purchases of e-book readers in China are in fact increasing, 40% of the e-book reader sales in China are still contributed by government or enterprises, as they are giving the devices away as gifts. Since the contribution from these procurement orders are difficult to estimate, therefore Hanvon was unable to give a forecast for its performance.
As for tablet PCs, since Hanvon currently still cannot find an advantage in the market, the company will maintain its focus on e-book readers.
E Ink Holdings (EIH) – formerly Prime View International (PVI) – is the global leader of the electrophoretic display (EPD) market, while Hanvon is the leading vendor of e-book readers in China. … The E Ink chairman believes the e-book market will have high growth for the next 10 years, while his Hanvon counterpart thinks there should be more China e-book reader brands. …
Q: Can you talk about the current development and cooperation between EIH and Hanvon.
Scott Liu: EIH has improved the whiteness, contrast ratio and color performance of the new color EPD. Hanvon is handling the overall product design, and they will focus on special markets such as educational institutions, private companies and government offices for the color e-book reader.
…
Liu Yingjian: EIH and Hanvon have been working together for many years. I would like to pay my respect to EIH, which decided to explore the potential of e-paper, including the acquisition of E Ink in order to have a tight control of the supply chain, when most people in the market were skeptical about such a sector.
…
Our expectations for e-book readers are firstly demand from paperless offices and then the educational market. Paperless demand is huge, as vendors do not have to worry about content, and it fits the current popular trend of low-carbon life-style. In the educational market, bookbags are too heavy for students, and there will be huge demand.
Q: Will Hanvon and EIH have further cooperation in the educational market in the future?
…
Liu Yingjian: We have had several meetings regarding the educational market, and we’ve concluded that there are several lines that we cannot trespass.
…
Hence we have several proposals for promotions in the educational market, First, we will focus on the regions with better economic development as consumers in these regions have the means to purchase e-book readers. Second, we will focus on non-textbook reading materials as wealthy families may purchase the products for their children. Third, we will run trials at junior high schools, universities or some other grades. I believe the educational market will be substantial in 10 years.
Regional trials have been a success, with Shanghai being the most active region. Shanghai is the richest area in China with the highest GDP, and the municipal government has made a five-year plan to popularize the use of e-book readers for educational purposes, and a lot of preparation work needs to be done.
Q: Is there a concrete plan regarding cooperation between EIH and Hanvon for the educational market?
Liu Yingjian: The color e-book reader using EIH’s EPD will be tried out by a class of 500 students in Shanghai in the semester starting in September 2011. But trial use of e-book readers in classroom has already started in Yangzhou. We are now able to meet the two basic requirements for the educational market: color display and handwriting input.
Q: There are companies like Foxconn in Taiwan that have introduced e-book readers for students using TFT LCD panels or Mirasol displays from Qualcomm. What’s EIH’s opinion about the competitiveness of other technologies? What is Hanvon’s evaluation of other technologies?
Scott Liu: In fact, other technologies are not mature yet, while EIH has already introduced its color EPD, which is ready for mass production. But as far as I know, makers using other technologies usually will introduce products when the technologies are still at the lab-development phase, and it will be impossible for them to reach mass production in just a few months.
…
Q: What does EIH think about Qualcomm’s investment in Taiwan in the future, and the fact that Qualcomm will soon start mass production?
Scott Liu: Based on my understanding of Qualcomm’s technology, there are some difficulties for mass production. Even if Qualcomm starts mass production, it will still not able to compete with EPD due to high cost, especially with the high investment amount for setting up a new 4.5G plant, and the depreciation cost could kill a newly developed business.
On the contrary, EIH is mass producing its EPDs on fully depreciated production lines. It has recently added a 5G line and possibly will add a 6G line in the future. EIH has absolute advantage in terms of production capacity. I think there may be a market for Qualcomm’s display products, but judging from its volume production cost, Qualcomm will probably focus on high-end applications.
Liu Yingjian: It is a challenge to produce reflective display products, but it have been proven successful in black and white displays. However, color displays based on reflective technology remain a big challenge for production. But a lot of people commented that the performance of our color EPD displays exhibited (at FPD International) was of high standard.
The products we have launched are better than colored newspapers, but are still worse than magazines and TVs. The color performance of color e-paper is not as rich as TFT-LCD, but what’s more important is that color e-paper does not have side effects on our eyes.
…
Q: Any other expectations for color e-book readers?
Scott Liu: The basic application for color e-paper is still the e-book reader, and we don’t think that we should sacrifice the quality of black-and-white while doing color. The present color EPD is the first version, which means it is a product that meets the basic EIH standard, and the company will continue to improve the product.
The present color EPD uses color filters. We are making maximum use of the high-reflectivity characteristic of color filters, but this is only the short-term solution. For the long-term solution, we still hope to develop a particle-based electrophoresis technology to dislay colors without color filters. The development will take a longer time, and I expect some achievements in the next few years.
….
Source: Digitimes Research, December 2010
Part I. The e-reader market
E-paper maker announces income spike [Aug 11]
Sales of global e-readers are expected to double to 20 million units next year as retail price has fallen to less than US$200 plus contract service
Global sales of 20-25 million e-book readers projected for 2011, says E Ink chairman [Oct 28]
Global e-book reader sales in 2010 are expected to reach 10 million units at least, and the forecast for 2011 is upward adjusted from 18 million units originally, to 20-25 million units, according to chairman Scott Liu for Taiwan-based E Ink Holdings.
e-Reader Market Will Reach 54M Units in 2015 by Displaybank’s e-Reader Industry Trend and Market Forecacast [Nov 16]
Tapping educational e-book reader market needs 2-3 years, says E Ink chairman [Aug 18]
Liu indicated that the Shanghai government aims to replace printed textbooks with e-books in five years, while the Korea government also plans to do the same by 2014.
…
EIH currently is the supplier of e-book readers in a trial program for adopting e-books at school in Jiangsu, China, Liu added.
Although some countries are stepping up efforts promoting e-reading in schools, it may take years before e-books can really start replacing printed textbooks, as the process involves so many different sectors ranging from content, hardware, platform development to government policies, market observers said.
Global e-book reader shipments to be 2-3 times higher in 2H10, says E Ink chairman [Aug 11]
Price-cut competition for e-book readers among global vendors including Amazon, Barnes & Noble, Sony and Hanvon is expected to stimulate demand in the second half of 2010, with total shipments expected to be 2-3 times those in the first half, according to Scott Liu, chairman of Taiwan-based EPD (electrophoretic display) maker E Ink Holding.
…
Liu indicated that with the prices for e-book readers dropping significantly, players who only produce e-reading devices with no content support are coming under threats of being forced out of the market by the first-tier players such as Amazon and Barnes & Noble who will continue to dominate the market.
…
E Ink added that clients are now able to run pricing campaigns because their EPD orders have already reached the agreed amounts, allowing them to have discounted prices, Liu said, adding that his company is happy to offer the discounts to help stimulate growth of the e-reading market.
…
Amazon’s latest 6-inch Kindle without 3G connection only costs US$139, reaching the pricing sweet spot, and it is expected to generate significant growth for the vendor, he said.
Liu said that vendors will soon be able to provide sub-US$100 e-book readers judging from the market growth, and E Ink will help clients further lower the production costs.
Global e-book reader shipments fall short of forecast in 2Q10, says Digitimes Research [July 28]
A total of 1.35 million e-book readers were shipped to the global market in the second quarter of 2010, 33.2% fewer than the originally projected 2.02 million units, chiefly because shipments of new models were delayed to the third quarter, according to Digitimes Research.
Two other factors also prevented shipments from reaching the target. Telecom carrier China Mobile Communications’ subsidized sales of e-book readers were weaker-than-expected in the China market, and volume shipments of SiPix’s e-paper solutions were delayed.
Digitimes Insight: China e-book reader market smaller than expected in 2010 [July 14]
Digitimes Research has downward adjusted its 2010 projected total e-book reader shipments in the China market from 1.5 million units originally to 900,000-1 million units, as China Mobile Communications’ subsidized sales of its e-reading device have so far been much below expectations.
China Mobile Communications originally planned to procure one million e-book readers for subsidized sales in the China market in 2010, but the company actually only purchased 30,000-40,000 units in the first half of 2010, Digitimes Research noted.
Worldwide e-book reader shipments to reach 28 million by 2013, says Digitimes Research [March 24]
Global e-book reader shipments will increase from 700,000 units in 2008 to 28 million units in 2013, representing a CAGR (compound annual growth rate) of 386%, according to a recently published report from Digitimes Research.
The special report on e-book readers also indicated that the total market value for e-book reader shipments would surpass US$3 billion in 2013, up from only US$244 million in 2008.
…
China, where the government is promoting e-reading as one of its major policies, is expected to become the second-largest single market for e-book readers in 2010.
Demise of the printed word? [Sept 6]
The desire to read books digitally on Apple iPads, Amazon Kindles or devices made in China such as Founder or Hanvon, is perhaps greater in China, where gadgets are adored, than any other market except the United States.
…
Many of the world’s publishers believe what happens in China could alter the axis of the global publishing industry and condemn what we now know as the paper book to history.
The move to digital transforms the business model of publishing and who gets what slice of the cake.
Publishers fear they could become marginalized or cut out of the process altogether as the new operators in the market – those providing the platforms – want to become content providers themselves and sign their own deals with authors.
…
One concern publishers have in China is piracy. Already on many street corners, forged copies of many titles of paper books are sold for a fraction of their normal retail price.
What scares publishers is that ripping off digital books is potentially easier and they don’t have to be sold on street stalls but could be sold in any part of the world in an instant.
A high-tech leap may put China front and center [Sept 6]
Lack of modern bookstores may make e-reading a public preference
John Makinson, chairman and chief executive of Penguin, a major international publisher, believes China could lead the world in the way people buy books.
…
“One of the key features of the Chinese market is that the physical book retailing infrastructure is not quite as well developed as in other markets,” he said. “There is an opportunity for digital publishing because the book retailing market is not as efficient as in some other markets. There are few book shops and there are problems in getting early delivery of books,” he said.
…
“To some extent, it could sort of leapfrog traditional publishing here, just as mobile telephony in some markets has leapfrogged fixed line phone networks,” he said. “You have a relatively conservative publishing and retail culture here while at the same time you have a very large community of book lovers engaged in online activity.”
…
He said according to industry figures e-books now make up around 10 percent of the total market in the United States and that portion was growing at 300 percent a year. “We have no idea when it might start flattening out. I think it is heading for at least 20 to 30 per cent of the overall market,” he said.
More people are reading on screens, not on paper [May 7]
The value of the digital publishing industry surpassed that of the traditional publishing industry last year for the first time in China, according to a blue book on the cultural industry released on Thursday.
The scale of the digital publishing industry hit an unprecedented high of 75 billion yuan ($11 billion) last year, up by 40 percent year on year, the blue book said.
“Online books, cell phone books and digital books have become popular among Chinese readers,” Zhang Xiaoming, deputy director of the Cultural Research Center under the Chinese Academy of Social Sciences, said at a press conference.
The country’s cultural industry totaled about 800 billion yuan in 2009, according to an annual report on the industry’s development released by Social Sciences Academic Press on Thursday.
The report says most of China’s publishing houses have started producing of digital books.
About 75 percent of newspapers have launched online papers and 55 percent of them are providing SMS (short message service) news, the report says.
About 2.8 percent of Chinese adults have stopped reading anything on paper and have become loyal readers of digitally published products, the report said.
…
The number of cell phone users in China reached 780 million at the end of March, of which 155 million are mobile readers, according to figures from China’s Ministry of Industry and Information Technology.
China Mobile, the world’s biggest cell phone carrier in terms of subscribers, runs e-book stores and provides wireless access to online publications, such as e-books, comics and magazines.
The subscription fee for its online e-book store is up to five yuan per month, 40 percent of which will be shared with copyright owners, according to China Mobile.
…
“In recent years, the scale of the traditional publishing industry has remained at around 50 to 60 billion yuan a year, and it relies heavily on textbook publishing,” Gao Shusheng, an official with the publicity department of the Communist Party of China Central Committee, said in an earlier interview.
“Many publishing houses are facing a crisis and digital publishing might help them break the ice,” he said.
Yan Xiaohong, deputy director of General Administration of Press and Publication, also said mobile reading has shown strong vitality and huge market potential in China.
“I spent 15 yuan on mobile reading last year, and I’m planning to buy an electric book this month,” said Yang Jie, a 27-year-old Beijinger. Reading an electric book on the bus is “fashionable,” and three to five yuan for reading an electric book online is affordable, she said.
China Mobile platform puts digital publications at fingertips [May 6]
China Mobile on Wednesday launched an online platform that enables its subscribers to read and download digital publications through cell phones and e-book readers, as part of its effort to profit from the country’s emerging mobile reading market.
The world’s biggest cellphone carrier in terms of subscribers kicked off an e-book store similar to Apple’s iBook store, which gives users wireless access to a series of online publications such as e-books, comics and magazines.
“Reading habits have fundamentally changed,” said Gao Nianshu, general manager of China Mobile’s data department. He said the company hopes the new platform will attract over 200 million users in the near future.
…
Gao said China Mobile’s new e-book platform, which currently covers about 40 percent of the best selling books in the country, has attracted over 15 million users during four months of testing in eight areas.
…
But … although about 45 percent of Chinese mobile Internet users read books at least once a day by mobile phone, few of them are willing to pay for online content.
…
It was reported earlier this week that China Mobile plans to team up with Foxconn Electronics of Taiwan province to produce its own e-book readers.
Part II. New technologies for 2011
Color Comes to E Ink Screens [Nov 7]
However, the new color E Ink display, while an important technological breakthrough, is not as sharp and colorful as LCD. Unlike an LCD screen, the colors are muted, as if one were looking at a faded color photograph. In addition, E Ink cannot handle full-motion video. At best, it can show simple animations.
These are reasons Amazon, Sony and the other major e-reader makers are not yet embracing it. Amazon says it will offer color E Ink when it is ready; the company sees color as useful in cookbooks and children’s books, and it offers these books in color through its Kindle application for LCD devices. Sony is also taking a wait-and-see approach.
How E Ink’s Triton Color Displays Work, In E-Readers and Beyond [Nov 9]
E Ink developed the Triton screen in conjunction with a group of partners, including Epson, Texas Instruments, Marvell, and the semiconductor companies Maxim and Freescale, all of whom worked on the electronic components of the [previous black and white only] Pearl screen. In particular, Epson played a key role, providing the color filters’ controller chip.
Underneath, it’s still the same white, black and grayscale electrophoretic pigments; it’s only when filtered through the RGB overlay that the image appears in color. To reach for an historical analogy, it’s not totally dissimilar from film’s Technicolor process, which shot in black-and-white film strips through color filters, then reverse-processed.
Because the underlying technology is identical, Triton’s contrast, energy usage, viewing angle are all essentially the same as the Pearl. The image update or refresh rate for monochrome is the same (240 ms), but color animation can take up to about one full second.
Unlike a LCD display, though, pictures on the Triton don’t need to update the entire screen: a moving figure in the foreground might be refreshed while the background remains identical — just like traditional cel animation.
Epson and E Ink Announce State-of-the-Art Color EPD Controller [May 18]
Seiko Epson Corporation … and E Ink Corporation … announced a new jointly developed display controller IC. The S1D13524 is a high-performance EPD controller with a built-in color processor for E Ink’s VizplexTM-enabled electronic color paper displays.
…
Yingjian Liu, chairman of Hanvon Technology Co., Ltd, a leading eReader provider said, “Epson and E Ink’s color EPD controller is a revolutionary innovation in the eReader industry. Thanks to this breakthrough technology announcement, eReader lovers will now be able to enjoy reading colorful eNewspapers and eTextbooks. This new innovation will help expand the contents for eReaders, thereby helping to preserve the environment and changing the way in which people obtain information.” Hanvon is planning to launch its own colorful eReader at the end of the year.
The S1D13524 is the ideal choice for E Ink color EPD designs and design upgrades. Samples of the Epson S1D13524 will be available in June. Sample price is $24. Production quantities will be available in Dec 2010.
Epson to Provide Display Controller Platform that Sharply Improves e-Paper Product Performance [Oct 27]
– Platform to enable laser-quality images and high-speed refreshes –
Seiko Epson Corporation (“Epson”, TSE: 6724) today announced that it has developed a new display controller platform for electronic reading devices and other electronic paper products that provides laser-sharp image quality and rapid refreshes. The company will begin shipping the platform to e-paper-based product manufacturers in April 2011.
…
The display control platform will enable e-paper product manufacturers to speed up their time to market by allowing them to efficiently develop products with fast display refresh times and the ability to display images as sharp and clear as any produced by a laser printer. Notably, the platform will facilitate the development of products for business and education applications, which typically require higher image quality and faster displays.
Epson is the world’s no.1* supplier of controller ICs for e-paper displays, partnering with E Ink Holdings Inc. of Hsinchu, Taiwan, the world’s number 1 supplier of e-paper.
…
The display controller platform employs a newly developed e-paper display driving scheme that is unlike those used in current e-book readers. The new driving scheme capitalizes on high-speed image processing technology originally developed for Epson’s photo-quality printers to enable e-paper displays with resolutions of 300 dpi and higher to be refreshed at high speed, which is ideal for higher education, professional office and general business environments.
E-paper devices outfitted with the display controller platform and a high-resolution e-paper display will render intricate content, such as “kanji” characters, mathematical formulas and engineering drawings, as well as illustrations, photographs and other images that require smooth gradations, much more clearly than current e-paper displays. They will also be able to flip through the pages of an e-book much faster than existing e-readers. When combined with sensors, these devices will provide powerful handwriting recognition, a critical function for business applications. The sharp improvement in readability and usability are expected to fuel the popularity of e-paper products in Japan, China, and other regions where Chinese characters are used, as well as in business and education applications where huge amounts of data have to be processed.
E Ink Announces Next Generation Display Platform [July 1]
E Ink® Corporation, the leading developer and marketer of electronic paper display technology, today announced the Q2 release of its next generation display technology, Pearl. With Pearl, E Ink expands the capabilities of reflective displays, bringing electronic paper performance to the next level. With the whitest reflective displays in the industry, and a contrast ratio now approximately 50 percent greater than today’s products, text on Pearl “pops” from the page, enabling a reading experience most similar to reading text on printed paper.
…
The E Ink Pearl design builds on the current generation of Vizplex designs, which is used in millions of eReader devices today. Due to a unique and proven two pigment system that is extremely stable, the current E Ink products in the market today have demonstrated long life and high reliability, enabling a whole new class of consumer products.
Images and text become crisp on the screen as the contrast between the background and item of interest is increased. E Ink Pearl raises the bar for displays used in digital reading. This allows for eReaders to go from a contrast ratio typical of newspapers, to a higher contrast ratio typical of paperback books. The crisp text and detailed graphics also continue to remain pleasant to view when E Ink products are enjoyed outside. In addition, with 16 gray level depth, E Ink Pearl offers the sharpest rendering of images and allows product developers to display images with smooth tones and rich detail.
Part III. The Chinese market
E Ink to set up subsidiary in China to develop e-book hardware [Dec 16]
Small- to medium-size TFT-LCD panel and electrophoretic display (EPD) maker E Ink Holdings will invest US$6.61 million to set up a subsidiary in China to design and develop hardware for e-book readers for the local education market, according to the company.
… the company will not mass produce e-book readers. This investment in China is to provide an incentive to the textbook market to commence its transition to e-paper
China market: Hanvon to lower e-book reader prices by average of CNY500 a year, says report [Dec 7]
Hanvon Technology, the largest China-based vendor of e-book readers, has reached an initial economy-scale of over one million users in the China market and will keep reducing prices by an average of CNY500 (US$75) each year until it reaches production cost levels, according to a report by China-based Beijing News. … Hanvon will rely on sales of online content for profitability, the paper quoted Hanvon chairman Liu Ying-jian as saying. Hanvon will even offer free e-book readers, Liu indicated.
…
Hanvon has so far adopted EPD (electrophoretic display) panels supplied by Taiwan-based E Ink Holdings, and will cooperate with additional suppliers including Qualcomm MEMS Technologies and Fujitsu
Hanwang to maintain over 70% of China e-book reader market share in 2010 [Nov 24]
Hanwang Technology’s e-book reader shipments are expected to exceed one million units in 2010, an increase of 150% from about 400,000 units in 2009, and the vendor is expected to maintain an over 70% share of the e-book reader market in China for the year.
Hanwang is optimistic about the education market and expects significant growth in the future, noting that there are over 100 million elementary school students. Hanwang noted that flexible substrates will help to boost demand in the education market because they are more robust than glass substrates.
China market: Hanvon lowers e-book readers by 200-300 yuan on average [Nov 16]:
Hanvon Technology, currently the largest vendor of e-book readers in the China market, has lowered its retail prices by 200-300 yuan (US$30-45) on average, with the lowest price reaching 950 yuan, according to report by China-based Beijing Morning Post. The price war for e-book readers in the China market has kicked off and there are expected to be rounds of price-cut competition, the source cited China-based consulting company Analysys International as indicating.
…
In addition to Hanvon, fellow vendor MReader has cut the retail price for its S600 e-book reader to 999 yuan and another vendor Gorld has cut the price for its 500T to about 1,000 yuan.
Hanvon color e-book reader to hit the market in February 2011 [Nov 11]
Hanvon will start selling its new 9.7-inch color e-book reader featuring E Ink Holding’s latest color e-paper, Triton, in February 2011 with a selling price of 3,500 yuan (US$527.59) and is accepting pre-orders now.
…
Hanvon chairman Liu Ying-jian noted that thanks to E Ink’s cooperation, Hanvon was able to launch the world’s first color e-book reader with better-than-expected color performance. Hanvon will launch a Wi-Fi version with a selling price of 3,500 yuan, and latter a 3G version at a price of 200-300 yuan more.
In addition to competing with iPad, the 9.7-inch color e-book reader is also eyeing the commercial market as the product allows users to read and modify PowerPoint files, reducing the usage of actual paper and is easy to carry around, Liu added.
E Ink Announces Color ePaper [Nov 10]
“Color ePaper will enable richer content in eBooks, as well as enabling a broader array of other reading devices, for content such as magazines, newspapers, and educational materials,” according to Paul Semenza, Senior Vice President, DisplaySearch. “We foresee market demand for ePaper displays in these applications reaching $5 billion by 2016.”
…
For image-rich information applications showing charts, graphs, maps, photos, comics and advertising, color displays made with Triton Imaging Film enable ultra-low power and high mobility devices with a paper-like experience. In addition to 16 levels of grayscale, Triton is capable of displaying thousands of colors. And just like E Ink’s grayscale ePaper products, Triton’s crisp text and detailed color graphics are fully viewable in direct sunlight.
INTERVIEW: Aiming for No. 1 in e-reader sector [June 2]
Taipei Times: Hanvon Technology Co (漢王科技) enjoys a strong presence in the Chinese e-reader market and you aim to become the world’s top brand. How do you plan to do that and what is your timeline?
Liu Yingjian (劉迎建): We are currently the world’s No. 2 e-reader brand [after Amazon], and we will become No. 1 next year, or in 2012 at the latest. China has the biggest e-reader market. With our huge scale in shipments, we have advantages in lower costs and product functionality with our proprietary Mandarin-character recognition software.
Our goal was to ship 500,000 e-readers in China last year, but we sold only 266,000 units, as our upstream suppliers weren’t able to supply the volumes we requested. In the first quarter, we shipped 180,000 e-readers, and the total volume for the year will definitely surpass 1 million.
…
TT: The iPad is now taking the world by storm and Acer Inc (宏碁) last week announced that it would join hands with China’s Founder Group (北大方正集團) to move into China’s PC and e-reader market. How do you view the competition?
Liu: I regard [Apple co-founder] Steve Jobs as a hero and Apple itself is an outstanding company. Tablet PCs have been in the market for so long, but just didn’t take off. The launch of the iPad revived consumers’ interest. Apple’s business model, applications, stylish gadgets and the enjoyment these devices bring to consumers are amazing.
But this doesn’t mean that Apple products will also receive overwhelming response in China. The cultural essence is the part Western firms fail to offer. Hanvon has created computerized Mandarin-character handwriting recognition solutions, which allow the elderly and kids to enjoy technology by just scribbling on the panels.
[Liu developed the world’s first computerized Mandarin-character handwriting recognition technology in 1985, then founded Hanvon in 1998 and the company became the first Chinese IT firm to license technology to Microsoft Corp the same year.]
The market in China is huge and there won’t be only one player. We have over 40 e-reader brands and the competition helps us stay competitive. What Acer lacks in digital content is complemented by Founder’s resources.
TT: The market is now split into two segments: e-readers and tablet devices. Some say tablets will cannibalize the e-reader segment. What is your take on this, especially since Hanvon just debuted its first tablet — the TouchPad — late last month?
Liu: These two products share a similarity: They are both tablet devices, but use different panels. The major difference is that an e-reader is more for stationary use, such as flipping through newspapers and magazines, and uses less battery power. Tablets consume more power, but have color screens with more PC-like features. In the future, e-paper displays will be in color, while TFT panels used in tablets will consume less battery power. Both could merge into a single device over the next three years.
…
TT: How would you define your relationship with Taiwanese manufacturers?
Liu: We realized that when it comes product design, Taiwanese manufacturers are the cream of the crop. Hanvon isn’t strong in manufacturing and if we want to churn out products that have world-class quality, then we need to work with world-class companies. I started to pay aggressive visits to Taiwanese manufacturers in the second half of last year, looking for suitable partners. There are a slew of sleek products that we will introduce later this year and they are designed by Taiwanese firms. Also, we are currently talking to Book11.com for e-content and plan to bring in our e-reader and TouchPad to Taiwan in the second half.
China Hanvon Technology, the world’s second-largest e-reader manufacturers as well as the world’s leading technology supplier of handwriting recognition, optical character recognition and biometrics identification sets up an overseas marketing platform in Taiwan today to expand overseas markets. Hanvon also announces that all its four major product lines Ebook readers (including the latest six-inch touch-screen Ebook N620 with handwriting recognition and WiFi launched simultaneously in mainland China), Tablet PCs, Graphic Tablets and Face Recognitions Products will be available in Taiwan. Hanvon Technology will also cooperate with the digital publishers in Taiwan on the establishment a cross-strait publishing cooperation platform to support the distribution of Taiwan’s Traditional Chinese publication in mainland China and further expand the market of Chinese publication. Attaching importance to Taiwan market, Hanvon Technology today invites dozens of partners in Taiwan such as technology companies, distributors and digital publishers to attend the news conference. Hanvon Technology hopes the establishment of overseas marketing platform in Taiwan is an opportunity to Chinese digital publishers across the strait to collaborate on spreading Chinese culture and starting a new era of Chinese reading!
Hanvon to launch Taiwan subsidiary [Sept 8]
… it will have a workforce of 70 to 80 carrying out research and development, as well as sales, said Chen Shaoqiang (陳少強), president of Hanvon’s resources management division.
The commencement of local operations will also include the debut of its online bookstore, which will allow owners of Hanvon e-readers to download books onto their devices
…
To meet shipment goals, Hanvon has outsourced production to Hon Hai Precision Industry Co (鴻海精密), Pegatron Corp (和碩), Inventec Corp (英業達) and Clevo Co (藍天電腦).
Part IV. Hanvon’s Microsoft and Intel cooperation
[FPD 2010] Hanvon’s Triton Powered Color e-Reader “WISEreader” hands-on [Nov 12]
Available in Pre-order in China, Hanvon’s latest e-Reader is according to the company the world first Color e-book reader. Name “WISEreader” this new e-Reader comes with a 9.68” Screen from E INK Triton technology, display 4096 colors, comes with Hanvon Digital Touch screen technology, runs on Windows CE 6.0 a Freescale CPU, has 2GB of RAM and support MicroSD Cards up to 32GB.
Other spec includes a 2350mAh Li-Ion Battery, Wi-Fi B/G as well as several WAN Options including TD, EVDO and WCDMA.
Finally the WISEreader support TXT Files as well as HTML, HTXT, PDF, CEB, DOC, XLS, PPT, EPUB, HEB, HEC, JPG, BMP, TIF, GIF, MP3, WAV and WMA.
We had some quality time with this little marvel and honestly the screen is quite good and the overall reader was responsive. With a nice 9.68 screen capable to rotate on landscape mode, the WISEreader is a pretty descent device. Capable to support some basic little games, it make us which to be in China just right now to grab one.
http://www.hanvon.com/en/products/ebook/index.html
6 inches
|
5 inches
|
8 inches
|
| WinCE:· File Formats: – Text: TXT, HTXT, HTML, PDF, EPUB, DOC, XLS – Image: JPG, TIF, BMP, PNG, GIF – DRM: Adobe content management 4· Digital Audio Formats: WAV, WMA, MP3 |
WinCE 5.0:· Supported Digital Audio Standards: WAV, MP3· Reader: – TEXT: TXT, HTXT, HTML, PDF, EPUB, CHM, Mobi/FB2/(not available yet) – Image: JPG, TIF, BMP, PNG, GIF · Office: Microsoft® Word, EXCEL, PPT (not available yet) |
Linux:
· File Formats:
– Text: TXT, HTXT, HTML, PDF, EPUB
– Image: JPG, TIF, BMP, PNG, GIF,CHM
– DRM: Adobe content management 4
· Digital Audio Formats: WMA, MP3
Hanvon Ebook Readers [March]
… if you want handwriting recongnition incorporated into a reading device Hanvon has to be first choice. This is a key part of their work for over two decades, and something at which they do excel. …
Hanvon WiSEreader N618 at Microsoft booth on COMPUTEX Taipei 2010 [June 6]
Microsoft invites Hanvon to take participate in Microsoft booth in COMPUTEX Taipei (#L108). On 1st of June, Microsoft Corporate Vice President, OEM, Mr. Steven Guggenheimer introduces Hanvon to Microsoft media that Hanvon is a very important partner of Microsoft Window Embedded [because of Windows CE, see above], and that Hanvon comes from Beijing, which is a very magnificent media exposure for Hanvon brand.
Hanvon Invites Taiwan Peers to Jointly Enter Global E-book Reader Market [June 2]
Hanvon today unveiled an array of new products at the Computex Taipei 2010, including Touchpad B10 (tablet PC), WISEreader N618 (e-book reader), and Art Master Ⅲ(graphics tablet).
…
- TouchPad B10
Hanvon, Microsoft, and Intel jointly launched TouchPad B10 for business people. Also called the “iPad Killer” by the market, TouchPad has a trendy look and various practical features. With a weight around 990g and thickness of only 18mm, the stylish and light-weighted Touchpad is easy to carry. In addition, TouchPad supports VGA resolution of 1024×600 (16:9) and is equipped with a 2GB DDR2 memory and 250GB hard drive and therefore it makes video and audio files easy to read and write. With Windows7 pre-installed operating system, 2 USB ports, audio in/out, mini HDMI, TouchPad is a perfect trendy and handy product for consumers to use.
- WISEreader N618
WISEreader N618 is Hanvon’s first ebook reader equipped with built-in WiFi, which allows users to read ebooks via wireless web. It is a business type e-Book reader, equipped with a 6-inch E-Ink large screen and document editing/management software which supports multi-format files. Using Hanvon’s latest handwriting recognition technology and electromagnetic plate technology, WISEreader N618 is a more convenient tool compared to traditional notebooks for users as they can enjoy the dual touch screen features through gesture and handwriting recognition. WISEreader N618 is therefore a great companion for business and travel.
Hanvon B10 Win7 tablet goes on sale, gets video unboxing [Aug 25]
Hanvon Touchpad B10 tablet computer at CES China [July 12]
… new Touchpad B10 [linking to Hanvon’s product page] tablet computer. The 9.96 x 6.61 x 0.70 inch, 1.98 pound device is powered by a 1.3GHz ULV 743 Celeron processor and GMA X4500 display chip from Intel on a GS45 chipset with 2GB DDR2 memory and a 250GB hard disk drive.
Intel Shares Vision for the Future [April 13]
Also, Perlmutter disclosed that Intel is working with PC manufacturers Tongfang* and Hanvon* to introduce the new convertible classmate PC design that combines aesthetics with ruggedness, full PC functionality with enhanced e-reading capabilities and improved performance with energy efficiency. The flexible design of the new convertible classmate PC works and moves the way students do. The tablet touch screen form factor also adds additional functionality for students. Development of these new features was based on extensive ethnographic research with students and teachers.
Rugged Convertible Classmate PC Design Moves the Way Kids Do [April 26]
Intel Corporation today unveiled the most flexible and durable Intel-powered convertible classmate PC reference design yet.
PRESS KIT – The Intel-powered classmate PC: Photos
The new convertible classmate PC design converts instantly from a clamshell to a tablet mode with a touch screen, featuring a built-in camera that will swivel for 180 degrees while retaining its kids-friendly design. Features of the platform are designed for more mobility, flexibly and collaboration in students’ learning. The convertible design will coexist with the Intel-powered clamshell classmate PC for varying education needs in the world.
Pegatron lands orders for tablet PCs from China-based Hanvon [12 Nov]:
Hanvon has extended its own-brand business operation from e-book readers to tablet PCs and has launched a few business-use models including Touchpad B10 and B20 in the China market, the sources indicated.
Hanvon’s executives earlier came to Taiwan to seek ODM partners for its tablet PCs, with First International Computer, Clevo, Quanta Computer and Wistron regarded as candidates, the sources pointed out. Hanvon originally selected Clevo, but Clevo gave up the opportunity because Hanvon asked for too low prices, the sources indicated. Finally, Pegatron won by quoting the lowest, the sources noted.
China market: Hanvon to launch TouchPad B10 tablet PC in January [Dec 17]
China-based Hanvon Technology will begin to market its first Windows 7-based tablet PC, the TouchPad B10, in the China market in January 2011. Hanvon is currently outsourcing production of the TouchPad 10, which is powered by an Intel N455 processor, to Taiwan-based First International Computer (FIC).
FIC began shipping the TouchPad B10 in December and volume shipments will be maintained at 2,000-4,000 units a month initially. However, total monthly shipments are likely to reach 10,000-15,000 units when Hanvon launches Android-based products in the second quarter of 2011, according to industry sources.
More information:
Undermining E-Ink and single-purpose E-readers [Aug 23 – Nov 10]: a comprehensive report about the massive FUD generated by competitive forces a few months back. Has been successfully beaten back.
This Ink Is for Reading [July 1]: all you need to know about E-Ink Holdings (that times called Prime View International)
somewhat older information of the similar kind:
By the Book [Jan 8]
Taiwan firm spreads out e-paper magic [Jan 2]
Prime View and E-Book Readers: A New Page in Reading History [July 21, 2009]
Marvell beaten by Chinese chipmakers in sub 1,000 yuan handset procurement tender of China Mobile
Follow-up: First real chances for Marvell on the tablet and smartphone fronts [Aug 21 – Sept 25, 2011]
No international vendors win China Mobile procurement bid for 6 million TD-SCDMA CMMB handsets, says report [Nov 15, 2010]:
China Mobile will procure 12 models of inexpensive TD-SCDMA CMMB handsets, with an equal procurement volume of 500,000 units for each model, the report indicated. The seven local suppliers are ZTE with three models, Huawei Device, Lenovo and Coolpad each with two models as well as K-Touch, Hisense and New Postcom each with one model.
Vendors, including Nokia, Sony Ericsson, Motorola and Samsung Electronics, all failed in the competition because China Mobile asked for a unit procurement price of below 1,000 yuan (US$150) and they do not offer such inexpensive TD-SCDMA handset models, the report pointed out. Consequently, the seven China-based vendors eat the whole pie, with prices ranging from 350 yuan [US$52.7] to 650 [US$97.8] yuan.
Seven of the 12 models will use TD-SCDMA chips developed by China-based Leadcore Technology, a member of Datang Telecom Technology & Industry Group, and five models will be equipped with chips developed by China-based Spreadcom [Spreadtrum] Communications and T3G (originally China-based but has merged into ST-Ericsson).
Details on the model number, TD-SCDMA chipset vendor, and CMMB chip vendor for each handset are as follows (source Marbridge Daily):
Earlier reports about the tender announcement were:
– China Mobile to procure 6 million TD-SCMA handsets, says Chinese media [Oct 8, 2010]: “Of the total, 3.6 million will be of entry-level models and 2.4 million mid-range products. … the latest procurement effort is largely due to the fourth phase of the China Mobile’s TD-SCMA network construction. When completed, demand for TD-SCMA end-use products is expected to increase substantially.”
– China market: Inexpensive TD-SCDMA handsets to be available in 4Q10 [Oct 13, 2010]: “Pushed by China Mobile, TD-SCDMA handsets and smartphones at retail prices of about 500 yuan (US$75) and 1,000 yuan respectively will be available in the China market in the fourth quarter of 2010. … China Mobile is setting up its fourth-phase TD-SCDMA network of more than 100,000 base stations and expects the number of TD-SCDMA subscribers to increase from 13.42 million currently to 100 million in 2012.”
Please note the globally rock-bottom nature of 350 yuan [US$52.7] for entry-level models and of 650 [US$97.8] yuan mid-range products. No wonder that such a low-cost and high-performance system-on-a-chip (SoC) leader as Marvell Technology Group Ltd. had no chance to succeed through any of its handset manufacturing partners. Despite of its long stated aim to capitalize on huge volumes made possible by the sub 1,000 yuan TD-SCDMA handsets:
– Marvell Empowers Mass Market TD-SCDMA OPhones with PXA920 Chipset [Sept 8, 2009]:
The Marvell PXA920 [which later has obtained the additional name Pantheon 920] comes with a dedicated high performance ARM instruction set compliant Sheeva™ processor and an integrated release 7 (TD-SCDMA, TD-HSDPA, TD-HSUPA) TD-SCDMA baseband [processor] as well as a China Mobile proven EDGE modem.
“China Mobile Research Institute believes that the OPhone platform operating on the Marvell PXA920 will catalyze the hyper-growth of TD-SCDMA smartphones as it provides a powerful combination of value-added services on a feature rich, high performance and highly affordable platform. We believe that the PXA920 solution will help us realize China Mobile’s vision of sub-1000 RMB [sub $146] TD OPhones in the near future,” said Bill Huang general manager of China Mobile Research Institute. “Marvell has worked with us from the start of the PXA920 program [2 years ago] and we are excited by the rapid progress we have made towards realizing this milestone. China Mobile will work closely with Marvell and handset eco-system partners to deploy the PXA920 and we look forward to the rapid launch of next generation TD-SCDMA OPhones based on the Marvell PXA920.”
“It is an especially proud moment for me to work with China Mobile on the mass market launch of TD-SCDMA OPhones in China,” said Shanghai-born, Weili Dai, Marvell co-founder and vice president and general manager of the company’s Consumer and Computing Business Group. “Marvell’s mission is to make technology more useful and more affordable to more of the world’s consumers. The PXA920 realizes a shared vision of China Mobile and Marvell to make powerful and affordable smartphones accessible to everyone. With the first single chip solution for TD-SCDMA, Marvell is raising the technology bar for the entire industry.
– Marvell’s Vision and Long Term Commitment to China Positions Company for Next Phase of Growth [Sept 7, 2009]:
Marvell, with approximately $3 billion in revenues in fiscal year 2009, has nearly 700 employees in its Shanghai campus and is aggressively planning to expand its operations in China. The company has focused on building its presence in the China market for most of its 14 year history, initially developing strong relationships with enterprise customers like Huawei and ZTE.
…
Last week, Marvell celebrated the culmination of several years of investment in the China smartphone market with the introduction of the Marvell® PXA920, the first commercially available single-chip solution, enabling mass market availability of TD-SCDMA smartphones. Developed by Marvell’s research and development center in Shanghai, the PXA920 is a high performance, super integrated chipset that makes the new smartphones far more affordable than feature phones currently offered by China Mobile while providing enhanced performance versus current smartphones.
Update: That opportunity was realized only 2 years later. See:First real chances for Marvell on the tablet and smartphone fronts [Aug 21, 2011]
– Marvell Technology Group CEO Sehat Sutardja on Bloomberg [Sept, 2009]:
Our strategy is to focus:
- Focus on high-end smartphones
- Move smartphones to mainstream cell/feature-phone price range
- Work with China Mobile [world’s largest mobile company] for TD-SCDMA
– Marvell Drives $99 Smartphones to Market With New Pantheon Platform [Feb 12, 2010]
– Marvell Affirms Significant Progress in TD-SCDMA Mobile Phone Chipset at Mobile World Congress 2010 – Company Showcases Array of New Smartphones Developed for the China Market Powered by Marvell’s Low Cost, High Performance Processors [Feb 15, 2010]:
More than 90 percent of all OPhones (EDGE and TD-SCDMA) shipped since launch last September are built on Marvell’s power efficient, high performance silicon technology.
In addition to OPhones, Marvell recently announced new breakthrough developments in cellular silicon technology with the new Pantheon(TM) communication processors which enable development of sleeker, high performance smartphones with HD-quality, live instant video, voice, data and 3D graphics for gaming and other popular mobile applications for consumers.
“Marvell is proud to have been an early technology partner to China Mobile on the development of the OPhone smartphone and we are delighted to see the rapid and broad adoption of China’s TD-SCDMA standard,” said Ms. Weili Dai, Marvell’s Co-founder and Vice President and General Manager of Marvell Semiconductor’s Consumer and Computing Business Unit. “… The collaboration with China Mobile affirms our commitment to drive the smartphone for mass market adoption and to deliver the ‘always-on lifestyle’ to consumers around the world.”
“China Mobile’s vision of the sub-1000 RMB (sub $150) TD-SCDMA OPhones will become a reality because of our collaboration with leading companies like Marvell,” said Bill Huang general manager of China Mobile Research Institute. “Marvell and China Mobile are excited by the rapid progress we have made in the TD-SCDMA technical cooperation.”
As the world’s first solution with a built-in TD-SCDMA platform solution with a 55nm design, the Pantheon 920 is a high performance, highly integrated solution that helps make smartphones far more affordable than feature phones while providing enhanced performance compared to current smartphones.
The Pantheon 920 processor [exactly the same as the PXA 920 announced in Sept 2009]supports all leading open operating system (OS) software platforms and come with a dedicated high performance ARM instruction set compliant Marvell CPU processor, high performance HD video, 3D graphics accelerators, and industry’s leading TD-SCDMA modem with 2.8Mbps HSDPA and 2.2Mbps HSUPA.
Certainly it could be the case that the next round of China Mobile tender for sub 2,000 yuan (sub $300) handset procurements will be won by Marvell. The sub 1,000 yuan (sub $150) segment, however, has been lost for them.
Background on Chinese chipmakers now succeeding against Marvell and all other international operations
When looking into the background of local chipmakers, especially that of the biggest winner Leadcore technology, one thing becomes absolutely clear. The telecommunication chip supply is as much under state control as the whole telecommunication market. Moreover every strategy related decision, which of this procurement process is just one example, is under direct control of the Central Commitee of the Chinese Communist Party. As as consequence there is no wonder that no international chip maker has any chance to penetrate the mass handset market technologically viable for local chipmakers. It is quite probable that the Central Commitee wants to build an internationally competitive local chip industry via the huge volumes available on their home handset market. Some evidence:
– Leadcore Unveiled oPhone Solutions to Strengthen the High-end TD-SCDMA Handset [April 23, 2009]
On April 23, 2009, in the Leadcore Technology Annual Client Conference 2009, Mr. Sun Yu, the president of Leadcore Tech revealed the progress of TD-SCDMA terminals development. Mr. Sun Yu said that more than 60 handsets are based on the Leadcore solutions in the current 100 TD-SCDMA handsets. More than 70% TD-SCDMA terminals products in the market were derived from the Leadcore’s DTivy. The Pecker test terminal launched by the Leadcore technology occupied the vast majority share of TD-SCDMA test terminal market. He also revealed that China Mobile was taking its great effort to R&D the solutions of OMS-based TD-SCDMA handset, oPhone, which will be released by Leadcore on April 23, 2009.
– TD Forum Attended Leadcore Technology Client Conference to Witness the New Heights of Chip Manufacturers [April 22, 2010]
– Continuous innovation to lead the future – the core technology wonderful debut thirteenth China Beijing International High-Tech Expo [May 27, 2010], as translated from Chinese by Google:
展会期间联芯科技展位受到了中央领导以及参展观众的高度关注，取得良好反响。 Core Technology Alliance booth during the exhibition by the central leadership and the participating audience attention and achieved good response. 中共中央政治局委员、市委书记刘淇，中共中央政治局委员、国务委员刘延东，国务委员、公安部部长孟建柱，均来到联芯科技TD联盟展位驻足参观，了解公司最新技术与市场化成果。 CPC Central Committee, Liu Qi, Party Secretary of the CPC Central Committee, State Councilor Liu Yandong, State Councilor and Minister of Public Security Meng Jianzhu, are the core technology to the joint booth TD Union stopped to visit, understand the latest technology and market results.
– General Secretary of the Central Committee of the CPC, Chinese President and Chairman of Central Military Commission, Jintao Hu paid an inspection visit to Spreadtrum Communications (Shanghai) Co., Ltd [Jan 18, 2010]
– Hu calls for independent innovation [Jan 18, 2010]:
Hu Jintao (R front), general secretary of the Central Committee of the Communist Party of China, Chinese president and chairman of the Central Military Commission, shakes hands with young members of the research and development team as he inspects Spreadtrum Communications, Inc., in Shanghai, east China, on Jan. 16, 2010. Hu Jintao made an inspection tour in Shanghai on Jan. 14-17. [Xinhua]
… At the Spreadtrum Communication, Inc., a high-tech company founded by returned overseas students, Hu said independent innovation is the lifeline of a company. He told the company staff “I hope you could make further breakthroughs in core technologies, so as to boost China’s communication industry.”
– Spreadtrum Communications, Inc. Announces $44 Million of New Financing [May 5, 2009]:
“We very much appreciate and are excited to receive this nearly interest-free financing. This indicates the Chinese government’s strong support and high confidence in Spreadtrum to develop semiconductor products in 2nd and 3rd generation wireless communications in the Chinese market. We plan to use our borrowings under the loan to increase R&D investment in our GSM and TD-SCDMA projects and to expand our IC operations in China. With our strengthened financial position, we are more confident in our ability to overcome the difficulties caused by the current worldwide economic and financial crisis and do not expect to need to raise additional funds in the near future,” said Dr. Leo Li, president and chief executive officer of Spreadtrum Communications, Inc.
And these are just the visible indications that local chipmakers are getting huge government subsidies. And T3G, now a wholly owned subsidiary of ST Ericsson, has also been a very much preferred player because of its parent’s huge patent portfolio and international Ericsson influence in the strategic (for China’s local and foreign market efforts) LTE wins (see: IMT-Advanced (4G) for the next-generations of interactive mobile services, China is triumphant [Oct 24, 2010]). With that they can beat even the best international chip house, the Marvell Technology Group.
1. Leadcore Technology (part of the state-owned Datang Telecom Technology & Industry Group)
The current outcome is not the first time for the biggest winner Leadcore Tedchnology (with seven of the 12 models using its TD-SCDAM chip, i.e. 58% or 3.5M chips) as evidenced by one and a half years old news of Leadcore Technology Gets Big Order from China Mobile [May 21, 2009]:
Leadcore Technology Co., Ltd., together with its three partners, wins nearly a half of the CNY 600 million subsidy from China Mobile in the telecom carrier’s latest round of bidding for TD-SCDMA terminal procurement
…
Leadcore’s mobile phone chips are applied in five models of TD-SDMA mobile phones that are ordered by China Mobile this time.
The TD-SCDMA network operator has ordered 11 models of mobile phones, including the Leadcore chip-powered low-end TD-SCDMA devices launched by ZTE Corporation (SZSE: 000063 and SEHK: 0763) and LG, as well as the Leadcore chip-based flagship broadband TD-SCDMA products rolled out by LG, ZTE, and Yulong Computer Telecommunication Scientific (Shenzhen) Co., Ltd.
The other companies share the TD-SCDMA terminal order from China Mobile include T3G Technology Co., Ltd., Spreadtrum Communications, Inc. (Nasdaq: SPRD), Dopod Communication Corporation, Motorola, Samsung, Huawei Technologies, Hisense, and Guangzhou New Postcom Equipment.
Leadcore Technology’s lead on the technology market for TD-SCDMA terminals goes back to the very beginning as was reported by Datang Licensed TD Tech from Leadcore [Sept. 30, 2009]:
Sun Yuwang, president at Leadcore Technology, once said that more than 60 of the over 100 TD handsets that have gotten network access licenses in the country have been equipped with Leadcore chips, with an additional 14 new models afoot. Among the top four PC makers in the world, Lenovo, HP and Acer have all adopted Leadcore’s products.
Leadcore’s TD chip shipment outpaced 1 million pieces this past April, topping 2 million by the end of this August. Now the company is holding more than 60% of the domestic TD chip market.
Leadcore’s dominance has been further evidenced by TD Forum Attended Leadcore Technology Client Conference to Witness the New Heights of Chip Manufacturers [April 22, 2010]:
Dr. Jing Wang, Secretary-general of TD Forum attended the conference and witnessed great achievements gained by TD-SCDMA chip manufacturers since TD-SCDMA commercialization one year ago. With the further mature of TD-SCDMA market and gradually strengthened cooperation among related parts of TD-SCDMA industry, the problems occurred in the development of TD-SCDMA industry will be resolved effectively.
Leadcore is part of the state-owned Datang Telecom Technology & Industry Group which has the following structure:
with officially provided links as below:
Affiliations
Datang Telecom Technology & Industry Holdings Co.,Ltd.
- Datang Mobile Communications Equipment Co., Ltd.
- Leadcore Technology Co.,Ltd.
- Beijing Xinwei Telecom Technology Co.,Ltd.
- Datang Capital(Beijing) Co.,Ltd.
Datang Telecom Technology Co.,Ltd.
GoHigh Data Networks Technology Co.,Ltd.
Unit in charge
State-owned Assets Supervision and Administration Commission of the State Council
Among the affiliate links given above there is no link for Semiconductor Manufacturing International Corporation (SMIC) although on the stucture image it is listed as part of the Datang Telecom Technology & Industry Holdings Co.,Ltd.
- Update: Datang to raise stake in SMIC, says report [Nov 23]:
Datang Telecom Technology & Industry Holdings has agreed to acquire US$102 million worth of Semiconductor Manufacturing International Corporation (SMIC) shares to bring its stake in the foundry chipmaker to 20%, according to a Chinese-language sina.com report.
The report said SMIC will use the new funds mainly to expand advanced process capacity at its 12-inch fabs.
Datang, directly owned by China’s central government, is currently the majority shareholder of SMIC with a 16.6% stake.
Semiconductor Manufacturing International Corporation (SMIC) will pump at least US$2 billion into research and development annually in the future, aiming to develop “world-class” technologies and manufacturing within the next five years, according to Jiang Shang Zhou, chairman of the China-based foundry chipmaker.
…
SMIC is now undertaking a project to ramp up 45nm process capacity, which will cost it a total of about US$4 billion, Jiang noted. In addition, the company’s next move to a 32nm technology will initially require US$600 million, Jiang added.
Soon the Datang Telecom Technology & Industry Group will be even larger as per the news that China Potevio to merge with Datang [July 15, 2010]:
The government has decided to merge two State-owned telecom equipment makers – China Datang Corp and Potevio – by the end of this year, sources from Datang said on Wednesday.
The merged entity is expected to become the third-biggest telecom equipment maker in China after Huawei Technologies and ZTE Corp, the source said.
…
Datang is a large power generation company and one of the key promoters of the TD-SCDMA standard in the nation.
China Potevio is a leading IT equipment manufacturer and service provider. Its main businesses span the manufacture of telecommunications products, the application of telecom products, and the informatization of broadcasting and TV.
The group is also playing an active role in high-tech investments as per Datang Telecom planning PE fund [May 20, 2010]:
Telecom equipment maker Datang Telecom on Wednesday said it plans to set up a 5 billion yuan ($732.18 million) private equity (PE) fund for investments in the booming Internet of Things (IOT) industry.
Datang will partner with the Wuxi New District Venture Investment Group, the Chinese Academy of Sciences (CAS) and Wuxi Guolian Development (Group) Co to set up the PE fund with a corpus of 1 billion yuan in the first stage.
The company will invest 200 million yuan during the first stage of fundraising and hold a 40 percent equity stake in the fund management company being set up to manage the private equity fund.
IOT refers to networks of real-world objects linked to the Internet that interact through web services. The technology is based on the concept that all real-world objects can be identified and managed by computers if they are equipped with radio tags and linked to the Internet. Technologies such as radio frequency identification and sensors form the cornerstones of the network.
What is the current status of the group and Leadcore itself in relationship to China’s own TD-SCDMA and TD-LTE technologies? The Datang Telecom Group was awarded “2nd China Annual 3G Prize” [June 30, 2010] press release is giving all the details (emphasis is mine):
Since Ministry of Industry and Information Technology of PR China issued 3G licenses in January 2009, in TD-SCDMA industry DTG has occupied 30% of market share in system equipment, and 50% in chips and Solutions.
Currently, DTG possesses the most comprehensive TD-SCDMA solutions for all circumstances in the industry, and is competent to provide complete, end to end TD-SCDMA and TD-LTE business solutions. DTG has already provided network equipment supply and construction services to Guangdong, Shandong, Jiangsu and Zhejiang, and other key provinces. DTG actively cooperated with China Mobile to accomplish coverage of complex scenes, such as, intensive urban areas, large scaled stadiums, maglev trains and Cross-ocean Bridge, and provided premium green network with TD-SCDMA technology. All products provided by DTG are ready for smooth evolution towards TD-LTE. This award collectively represents high recognition and acceptance towards Datang Telecom Group for its contribution in promoting the development of Chinese telecommunication industry.
LeadCore Technology, winner of “TD-SCDMA terminal chip and the best solution provider”, is the core enterprise specialized in TD-SCDMA terminal industry in DTG. As a chip enterprise in the upstream position of industrial chain, Leadcore Technology always focuses on layout of industrial chain and value chain; Leadcore adheres to technology innovation and market-orientation; promotes industrialization of innovation achievements, persists in pursuing win-win situation from cooperation and also coordinates with the partners from industrial chain, so as to promote rapid and healthy development of TD-SCDMA industry.
2. Spreadtrum Communications, Inc (founded by Chinese expatriates in 2001, a public company since 2007 with principal executive offices and most operations in China but incorporated in Cayman Islands)
– Spreadtrum and Hisense Jointly Launched the World’s First Affordable TD-SCDMA Phone Supporting CMMB Digital TV [Jan 10, 2010]
Hisense N51 was jointly developed by Spreadtrum and Hisense in a highly collaborative technical partnership. Executive Vice President of Hisense Communication, Ms. Wenlin Yang, said: “Hisense and Spreadtrum share a long history of co-operation. Partnering with Spreadtrum, we successfully won the bid of ‘thousand-yuan 3G mobile phones’ project of China Mobile’s ‘TD-SCDMA Terminal Special Incentive Fund Project.’ Through our six-month joint efforts and Spreadtrum’s very competitive TD-SCDMA and CMMB solutions, the Hisense N51 was introduced. … “
President and CEO of Spreadtrum Communications, Inc., Dr. Leo Li, said: “… Spreadtrum provides highly integrated TD-SCDMA/HSDPA/GSM/GPRS/EDGE baseband chip SC8800H and RF chip QS3200, which effectively reduce the cost of development and manufacturing of Hisense Communication products. Therefore, Hisense Communication is able to introduce cost-effective handsets such as N51 by targeting the Chinese 3G market quickly to meet the needs of consumers. Spreadtrum CMMB mobile TV chip SC6600V provides Hisense N51 with vast application space. Particularly, Hisense N51 is currently the world’s only 1000 RMB level TD-SCDMA phone that supports CMMB.”
– Spreadtrum’s TD-SCDMA Chip Adopted in the World’s First 3G OPhone Lenovo O1 [Dec 14, 2009]:
Lenovo Mobile Communication Technology Co., Ltd. (hereinafter referred to as “Lenovo Mobile”) launched the world’s first TD-SCDMA standard-based OPhone smart phones – Lenovo O1, with immediate sales in all local markets in mainland China. The phone is based on Spreadtrum Communications, Inc. (hereinafter referred to as “Spreadtrum”, Nasdaq: SPRD) TD-SCDMA solution, and supports China Mobile OPhone OS smart phone operating system.
Spreadtrum and Lenovo Mobile, in a highly collaborative technical partnership, jointly developed Lenovo O1. This new handset runs on the China Mobile led developed Intelligent Terminal software platform – the OPhone platform. Lenovo 01 uses Spreadtrum’s TD-SCDMA/HSDPA / GSM / GPRS / EDGE baseband chip SC8800S and radio frequency (“RF”) chip QS3200.
– Spreadtrum and China Telecommunications Technology Labs Announce Strategic Partnership to Promote New Technologies and Services [May 15, 2009]
A unique industry chain capability has developed in China’s mobile phone industry, which now comprises of design, R&D, support, production, marketing, etc. This development will enhance the competitiveness of phones made in China for the local and overseas markets. With the strategic partnership of CTTL and Spreadtrum, our cooperation will create new technologies and services in wireless communications and multimedia terminals. For example, we expect to innovative services by utilizing our combined resources and new techniques in 2G and 3G networks to develop high-tech information security technologies for the mobile and multimedia markets. Our cooperation will simultaneously broaden and strengthen interactions in the industry chain.
… China Telecommunications Technology Labs (“CTTL”), founded in 1981, was named under the authorization of the Ministry of Information Industry (MII) and the State General Administration for Quality Supervision, Inspection and Quarantine (AQSIQ). Currently, CTTL is administrated by the China Academy of Telecommunications Research (CATR) and was formed through re-organization and merges of four divisions of CATR, i.e. the Research Institute of Telecommunications Transmission (RITT), the Telecommunications Metrology Center (TMC), the Research Institute for Industry Standard of Posts and Telecommunications (PTISR), the CTTL Anti-seismic Research Institute of Telecommunications Equipment, BaoDing (ARITE). It is a leading high-tech laboratory with the following missions: telecommunications technology development, telecommunications product standards and test methods research, telecommunications metrology standards and methods research, products inspection, verification and technical assessment and testing instruments metrology and evaluation of communications software.
– Spreadtrum Communications, Inc. Announces $44 Million of New Financing [May 5, 2009]:
“We very much appreciate and are excited to receive this nearly interest-free financing. This indicates the Chinese government’s strong support and high confidence in Spreadtrum to develop semiconductor products in 2nd and 3rd generation wireless communications in the Chinese market. We plan to use our borrowings under the loan to increase R&D investment in our GSM and TD-SCDMA projects and to expand our IC operations in China. With our strengthened financial position, we are more confident in our ability to overcome the difficulties caused by the current worldwide economic and financial crisis and do not expect to need to raise additional funds in the near future,” said Dr. Leo Li, president and chief executive officer of Spreadtrum Communications, Inc.
– Spreadtrum: TD-based Chip Shipment Totaled 100,000 [March 6, 2009]:
Spreadtrum Communications, Inc. clarified on March 3, 2009 that the shipment of its TD-SCDMA-based chips totaled nearly 100,000.
Earlier, the shipment of Spreadtrum’s TD-SCDMA-based chips was reported to reach 10,000 or so. The number is inaccurate, explained the Nasdaq-listed company, adding that mobile phones adopting its chips accounted for nearly one third of China’s procurement of 300,000 TD-SCDMA cellphones and terminals.
The Shanghai-based company incurred a net loss of USD 31.3 million for the third quarter of 2008, in contrast to a net profits of USD 6.1 million Q3 2007 and USD 2.6 million in Q2 2008
– Spreadtrum Announces World’s First TD-SCDMA/HSDPA/EDGE/GPRS/GSM Single-chip RF Transceiver – The QS3200 RF transceiver features high integration and low power consumption and provides 2G/2.5G/3G/3.5G multimode support [Feb 16, 2009]:
Followed by the GSM/GPRS single-chip RF transceiver, the QS500, and the GSM/GPRS/EDGE single-chip RF transceiver, the QS1000, today Spreadtrum announced the QS3200, the world’s first single-chip RF transceiver to support multimode such as 2G/3G/3.5G. The QS3200 offers great improvement over the other TD-SCDMA RF chip on signal transmission, reception, and power amplification in addition to the integrated features and low power consumption in Spreadtrum’s other chip solutions. The launch of the QS3200 makes Spreadtrum one of the total solution providers in the wireless communications market and takes a positive step forward in commercializing TD-SCDMA technology.
– Spreadtrum Announces SC6600V: First Single-Chip Demodulator/Decoder for CMMB-Based Mobile TV [May 7, 2008]
Spreadtrum’s new SC6600V solution is an integrated CMMB demodulator and source decoder chip and is the first single chip solution that supports both AVS and H.264 video decoding standards. As the first CMMB single chip solution for mobile TV, the SC6600V is designed for feature phones. The SC6600V adopts an integrated platform design for communications and mobile multimedia to reduce the design period of Spreadtrum’s customers. … Spreadtrum’s SC6600V single-chip solution is designed to enable handset makers and carriers to offer mobile TV feature in feature phones at reasonable prices, instead of being relegated to expensive SmartPhones as most mobile TV solutions are currently.
… CMMB is a homegrown mobile TV standard that applies to mobile devices such as mobile phones, PDAs and Portable Media Players (PMPs). It features free mobility, rich video and data services. In addition, it provides consumers with cost-effective mobile TV service that satisfies most consumers’ needs and is expected to be used in the Beijing 2008 Olympic Games.
Mr. Ma Jv, President, Academy of Broadcasting Science of the State Administration of Radio Film and Television, indicated that, “We are very glad that Spreadtrum has developed the SC6600V, the first CMMB-based Mobile TV single chip solution for mobile phones, which integrated demultiplex, channel decoder and source decoder. We believe that it will help CMMB start to grow its market quickly, and we hope Spreadtrum will continue to unleash its technology strengths, allowing it to contribute to the CMMB industry’s ongoing development and road to becoming prosperous.”
– Spreadtrum Communications Completes Acquisition of Quorum Systems [Jan 16, 2008]:
With the acquisition of Quorum, Spreadtrum gains a highly skilled RF engineering team of 30 engineers with an average of 10 years of industry experience. The combination of Spreadtrum’s leading single-chip baseband solutions with Quorum’s complementary, low-power high-performance RF designs is expected to strengthen Spreadtrum’s competitive position in the wireless market, including in 2G, 3G, RF, baseband, physical layer software, protocol and applications. Since its founding in 2003, Quorum has created multi-band transceiver designs ranging from GSM/GPRS/EDGE to WCDMA and 3G HSDPA application, plus a recently announced TD-SCDMA platform.
3. T3G (an ST Ericssson subsidiary since December 2008)
T3G has achieved an impressive record of world firsts in bringing innovation to China:
- The world’s first ASIC based TD-SCDMA system level call achieved in 2004
- The world’s first international TD-SCDMA call in 2004
- The world’s first 384Kbps commercial TD-SCDMA/EDGE dual-mode Samsung phone, powered by T3G’s chipset in 2005
- The world’s first ASIC based 2.8Mbps TD-HSDPA system call achieved in 2007
- The world’s first 2.8 million TD-HSDPA/EDGE dual-mode dual-band commercial data card powered by T3G’s chipset in 2008
- Completed the world’s first TD-LTE end-to-end application demonstration on multimode soft modem platform in 2009
- Launched the world’s first TD-HSPA chip in 65nm in 2009
– Strong presence and identity in China:
ST-Ericsson, through its subsidiary T3G, has been actively developing platforms for the TD mobile standard since 2003. The company’s extensive investment in technology and product development has given it a leadership position in the market. The company provides solutions to Chinese and global handset manufactures and design houses. It offers mobile chipsets, software protocols, system reference designs and customized technical support. In May 2009, ST-Ericsson was selected by China Mobile as a major technology partner for the development of its highend and low-cost handsets. The company will also support four of its customers to commercialize their mobile phones during 2009-2010.
…
- ST-Ericsson’s 550 employees are based in Beijing, Shanghai, Shenzhen and Hong Kong
- ST-Ericsson (ST-NXP Wireless) acquired T3G in December 2008. T3G was established in January 2003 as a joint venture. Its founding partners were Philips Semiconductors (later NXP Semiconductors, and finally ST-NXP Wireless), Datang Mobile, Samsung Electronics, and since 2005 also Motorola. T3G is based in Beijing.
– Datang set to sell off T3G stake [June 19, 2008]:
Datang Mobile, the second largest stakeholder of T3G, is putting its 32.11 percent stake on sale for 122.2 million yuan, according to a notice posted on the website of Beijing Equity Exchange.
The move comes on the heels of the collapse of Commit Inc, another major TD-SCDMA chipmaker, which has dimmed the prospects of TD-SCDMA.
There are rumors that Geneva-based semiconductor maker STMicroelectronics might take over Datang Mobile’s stake in T3G.
…
Commit has had its own share of woes, forcing it to shut shop at the end of April after failing to secure fresh funding and pay its employees for months. Commit’s shareholders include Hyper Market, Texas Instruments, Nokia, LG and State-owned Potevio and Datang Telecom, parent of Datang Mobile.
Industry observers blame Commit and T3G’s woes on the slow roll-out of TD-SCDMA in China.
– ST-Ericsson and China Mobile to Bring TD-SCDMA to the Mass Market [May 26, 2009]:
China Mobile has selected ST-Ericsson’s company in China, T3G, as a major technology partner for the development of its high-end and low-cost handsets, based on the 3G standard TD-SCDMA. ST-Ericsson will also support four of its customers to commercialize their mobile phones during 2009-2010.
Under the agreement, ST-Ericsson, the 50/50 joint venture between Ericsson and STMicroelectronics, will develop a new low-cost platform to support its customers to offer affordable TD-SCDMA devices to the China consumers. ST-Ericsson will also support customers to develop high-end mobile phones, based on existing and new platforms such as the T7210, which will allow consumers to enjoy high-speed broadband and multimedia services.
“Although ST-Ericsson is a recent joint venture, our subsidiary T3G has been actively developing platforms for the mobile standard for more than six years, achieving an impressive record of world firsts in bringing innovation to China,” said Alain Dutheil, President and CEO of ST-Ericsson. “Our dedicated local R&D team, as well as our strong commitment to continuous innovation and close cooperation with customers, will enable China Mobile to offer a broad range of handsets for the mass market as well as for the high-end segment.”
ST-Ericsson’s T7210 mobile platform supports TD-SCDMA dual-band in 2010-2025MHz/1880-1920MHz frequencies, and has successfully completed handovers of voice and high-speed data services in order to operate optimally in Chinese dual-band network environments.
– ST-Ericsson Continues to Drive Innovation in TD Market [Sept 14, 2009]:
ST-Ericsson, a world leader in wireless platforms and semiconductors, and its Chinese subsidiary T3G today announced the industry’s first TD-HSPA modem chip samples in 65nm. This new chip is smaller than existing products, making it easier to implement in mobile devices, and is also designed to reach significantly lower power consumption.
– ST-Ericsson reaches key milestones in China [Nov 27, 2009]:
Confirms clear market leadership in the TD-technology
- Five million TD chipsets shipped
- ST-Ericsson’s solutions power more than 100 models of TD devices, including handsets, data cards and embedded devices
ST-Ericsson, a world leader in wireless platforms and semiconductors, has reached two important milestones, confirming its market leadership in the Chinese homegrown 3G standard, TD-SCDMA. ST-Ericsson, through its Chinese subsidiary T3G, has been leading the innovation in the TD market since 2003, bringing numerous industry firsts.
… Read more at: http://www.stericsson.com/press/Strong_presence_china_English.pdf
– ST-Ericsson to cooperate with China Mobile on TD-LTE [Feb 16, 2010]:
ST-Ericsson, a world leader in wireless platforms and semiconductors, announced today it will cooperate with China Mobile on TD-LTE development and will support a demonstration of TD-LTE at Shanghai World EXPO in 2010.
ST-Ericsson will also actively participate on other TD-LTE projects organized by China Mobile, including trial and interoperability testing (IOT) with infrastructure vendors.
Bill Huang, General Manager of China Mobile Research Institute, said: “China Mobile and ST-Ericsson are co-operating very successfully on TD-SCDMA technology and we are happy to extend our partnership into the TD-LTE area and then multi-mode technologies in future. We share a common goal of creating a global LTE market encompassing both TDD and FDD technologies.”
…
ST-Ericsson’s key milestones in LTE:
- In December 2009, ST-Ericsson and Ericsson were first to achieve LTE and HSPA mobility with a multimode device. Read more at www.stericsson.com/press_releases/LTE_HSPA.jsp
- 2009: Fully working LTE chipset available and interoperability testing of the platform with operators
- 2008: Platform interoperability tests activities initiated with network vendors
- 2007: First handheld LTE prototype available and first handheld public demonstration at Mobile World Congress in 2008
- 2004-2005: ST-Ericsson started research and standardization activities related to LTE
– ST-Ericsson launches feature rich mobile internet platform in China – T6718 enables development of cost-effective and power-efficient multimedia TD-HSPA handsets [May 27, 2010]:
The T6718 is the first commercial 65 nanometer-based TD-HSPA platform, enabling manufacturers to quickly produce compact, cost efficient and feature-rich mobile broadband handsets for the Chinese market. ST-Ericsson expects the T6718, which can support downlink speeds of 2.8Mbps and uplink speeds of 2.2Mbps, to be in commercial products from Q3 2010.
… Handsets based on the T6718 platform will be able to deliver up to seven hours of talk-time or 25 days of standby on one battery charge. Incorporating software support for Assisted-GPS (AGPS), the T6718 will also enable location-based services, such as navigation and local search.
The dual mode TD-HSPA/EDGE modem is integrated with an ARM processor to deliver small size, fast response time and low power. This is also the first TD-HSPA solution to take advantage of the additional size and power benefits of the 65 nm process node.
The T6718 delivers a rich Internet experience including fast browsing, streaming video, broadcast television and other multimedia services on a touch-screen display. The 5 Mpixel camera support and video recording capability coupled with the graphics hardware accelerator provide a great visual consumer experience. Furthermore, the T6718 has the lowest power consumption in its class which means more hours enjoying music, video, internet access and talking.
…
High performance and low power consumption
- The first commercial 65 nanometer based TD-SCDMA
platform on the market- Talk time up to 7 hours and stand by up to 25 days on one battery charge (standard 1000mAh battery)
- ARM926 processor up to 416 MHz
Cloud Computing Strategy for Digital China: Taiwan is leading the way except IOT
In my post Be aware of mainland China and Taiwan stronger manufacturing links in ICT [Sept 2] it has already been proven that mainland China and Taiwan are fast becoming essentially one in the important ICT sector. Moreover, it was a recent acceptance of IMT-Advanced (4G) for the next-generations of interactive mobile services, China is triumphant [Oct 24] as major effect of that acceptance. It is more visible for mainland China as for them the #1 issue is Could China close the gap in mobile Internet? It should! [July 21]. For Taiwan the issue in this regard was the one related to Intel dismisses WiMAX Program Office [July 1] only. With IMT-Advanced (4G) accepted by ITU the Taiwanese concern about their strong and already very much advanced WiMAX commitment has also been resolved since the WirelessMAN-Advanced within IMT-Advanced is in fact a kind of WiMAX 2.
With such triumphant continuation assured for both the Taiwanese mobile Internet as well as that of mainland China (see 3.9G TD-LTE rollout in 2012 with integrated 2G, 3G and 4G? [July 19]) for an ardent China technology watcher like myself the next issue is what about their cloud computing strategies?
For mainland China the most visible manifestations of any cloud foundation related strategies of their own have been the OPhone OS (OMS) 2.0 based on Android 2.1 [July 5] and the Mobile search SaaS battle [June 28]. On behalf of the large international ICT players, on the other hand, the most visible mainland China related cloud effort has been so far the SAP’s Business ByDesign SaaS to be relaunched on July 31 with mobility as one of key attractions [July 28] only. So a kind of core coverage has already been provided on my “Experiencing the Cloud” blog.
- Update: China Mobile Expands Cooperation With Taiwanese Suppliers on 4G Biz [Dec 30]
-With a TD-LTE (time division long term evolution) testing lab jointly established by Taiwanese end-user instruments makers in China becoming operational, China Mobile, one of China`s big three telecom service providers, will move to expand its cooperation with them on 4G business in the country soon.
Yvonne Li, president of Taiwan`s Far Eastone Telecommunications Co., Ltd., one of founders of the TD-LTE testing lab, has confirmed that several Taiwanese handset makers, including High Tech Computer (HTC) Corp. and Asustek Computer Inc., have sent their smartphones to the lab for testing, which will be adopted by China Mobile for launch in China in 2011 at the earliest.
Also, Taiwan-based MediaTek Inc., a globally leading handset IC designer, is expected to count on the lab to accelerate development of its chipsets for TD-LTE phones, industry insiders noted.
Through the testing lab, Li stressed that Taiwanese firms relative to 4G communications can tap China Mobile`s supply chain of 4G phones more easily in the future than before. In short, the lab will also help step up cooperation between the Chinese telecom service provider and Taiwanese manufacturers.
Li also indicated that his firm has moved to expand collaboration with China Mobile on value-added mobile services, with the former`s application software and e-book readers already available on the latter`s online shopping store. Prospectively, said, the cooperation will open the door wider to China`s e-book reader market for other Taiwanese firms in the future.
So far, China Mobile has decided to set up over 3000 TD-LTE base stations in six metropolises, such as Beijing and Shanghai, in China, and, to counter underdevelopment of related 4G phones, has planned to rely on Taiwanese suppliers` cutting-edge product R&D capability to boost promotion of the 4G services.
Taiwan-based mobile telecom carrier Far EasTone Telecommunications (FET) has launched 25 Chinese-language Android applications om Mobile Market, the online store operated by China Mobile, with market response better than originally expected, according to FET.
The 25 applications, with 23 ones free and two chargeable, are selected from S Mart, FET’s online store of which 40% are for chargeable download, FET indicated. The launch on Mobile Market has hit a record of 43,000 downloads a day and reached more than 140,000 downloads cumulatively, FET noted. With 40 more applications under review by China Mobile, FET expects to have 100 applications available on Mobile Market at the end of 2010.
Most of the applications on Mobile Market should be for free use in order to cultivate habits, a necessary measure to pave the way for launching more chargeable applications in the future, FET pointed out. FET plans to invest NT$300 million (US$9.6 million) in three years offering free applications to tap the China market.
- Update: Internet is Major Helper of Home Economy in Taiwan [Dec 17]
Taiwan has about 15.42 million computer users and 14.46 million being habitual Internet browsers, 63.9% of which have shipped [shopped?] online, up 10 percentage points from the corresponding 53.9% of last year, according to a recent survey by the Research, Development & Evaluation Commission (RDEC) under the Taiwan Cabinet.
Online shoppers have spent on average this year NT$13,864 (US$447.23) per person, surging 41.24% from last year`s NT$9,816 (US$306.75). In addition, 26.4% of the browsers have used online financial services, up five percentage points from that recorded a year earlier. Such uptrend reflects the increasing dependence on the Internet by Taiwanese in home economy, or the art and economics of home management.
The survey shows that 86 of every 100 households in Taiwan own computers, with 81 being online browsers. This year the proportion of mobile online users has increased to 53% from last year`s 41.9%; while 75.6% of the island`s 12-and-older people have used computers and 70.9% have used the Internet.
Some 64.9% of Taiwan`s online users have participated in Internet communities, 48.8% have joined MSN, and 41.4% have participated in Facebook, with 34.9% having set up personal blogs.
- Update: VIA, Skycloud to Jointly Venture Into Cloud Computing [Dec 17]
The joint venture … will be the first manufacturer of cloud computing equipment co-founded by industries on the two sides of the Taiwan Straits.
Tian [Sounin, Skycloud Chairman] noted that mainland China has included cloud-computing development in its 12th Five-Year Plan, setting to push for one mega cloud computing plan each in Beijing, Shanghai, Shenzhen, Wuxi and Nanjing in five years.
Of the five mega programs, the one for Beijing will cost at least RMB50 billion (US$7.5 billion at US$1:RMB6.6) in investment and create an industry revenue four times the investment costs. The one for Shanghai is also expected to create revenue the same size of the Beijing plan.
According to executives of Chunghwa Telecom Co., Ltd., the mainland`s top three telecom carriers—China Telecom, China Mobile and China Unicom—will also start their own cloud-computing programs.
…
Taiwan`s Ministry of Economic Affairs estimated global revenue in cloud-computing industry will reach US$409.6 billion in 2012 and Taiwan has designed cloud computing as next NT$1 trillion (US$33 billion at US$1:NT$30) industry.
The cooperation is for Skycloud help CHT market CHT-developed cloud computing infrastructure and application services and ICT-based intelligent services/solutions for home, business and government use in China, with Skycloud to provide hardware and system integration services, CHT pointed out. In addition, CHT will set up an exhibition center of its cloud computing products in a cloud computing park developed by Skycloud in Beijing, with completion scheduled for the end of January 2011, CHT indicated. CHT will then introduce its cloud computing products, the HiCloud CaaS (compute as a service), to the China market in March-April 2011, the company noted.
…
Skycloud, in order to promote cloud computing business, has set up 13 offices around China and the nationwide promotion network will be expanded to 35-40 offices in 2011, Tian [Edward, Skycloud chairman] pointed out. Skycloud has been in cooperation with Taiwan-based IC design house VIA Technologies, and both sides will set up a China-based joint venture in 2011 to develop terminal devices specifically for cloud computing application, Tian indicated.
- Update: Taiwan, China to Jointly Offer Cloud Computing Commercial Services [Dec 16]
Two top companies of Taiwan and China have signed a memorandum of understanding to start the cooperation on jointly tapping the commercial opportunities in cloud computing services for companies in the Greater China area.
Lu Shyue-ching, chairman of Chunghwa Telecom Co. and concurrently head of the Taiwan Cloud Computing Consortium (TCCC), inked the document with chairman Edward Tian of the Beijing-based Skycloud Technology (China), Inc.
The pact marks the closer cooperation between the two companies, but executives at Chunghwa Telecom, the leading telecommunications service company in Taiwan, said the project also represents the beginning of mutual assistance between the two sides of the Taiwan Strait concerning cloud computing services.
They said Chunghwa Telecom will team up with Taiwan-based enterprises to formally start providing services in the Chinese market in 2011, including shipping the turn-key projects there.
The partners of Chunghwa Telecom in Taiwan include Quanta Computers, Inventec, and Trend Micro Incorporated.
…
Skycloud Technology, a leading cloud computing system integration company, has become a bellwether of the cloud computing sector in China after integrating resources at several other companies, including Centrine Data Systems, CE Open Source Software, and a software firm set up by the Beijing University of Technologyto form the China Cloud Computing Technology and Industry Alliance (CCCTIA).
Chunghwa Telecom is playing a similar role in Taiwan.
Shareholders of Skycloud Technology (China) also include Yahoo founder Jerry Young, and executives from Taiwan like chairman Barry Lam of Quanta Computer, president Chen Wen-Chi of VIA Technologies, and chairman Steve Chang of Trend Micro, a computer and Internet security company.
Skycloud Technology, which aims to bring enterprises in China into the “cloud era,” was understood to have won several contracts to develop cloud computing projects in China, including the one at Beijing Zhongguancun.
- Update: Chunghwa Telecom, Inventec Enter Into Cloud Computing Deal [Dec 31]
Chunghwa Telecom Co., Ltd. and Inventec Corp. yesterday announced cooperation on four cloud-computing projects, including establishing a cloud-computing equipment laboratory, developing cloud-computing equipment for end-user market, and setting up an online store offering content applications.
Also, the two companies decided to work with Skycloud Technology (China) Inc. on integrated solutions for mainland China`s cloud-computing market, which is estimated at around NT$1 trillion (US$33 billion at US$1:NT$30) over next five years.
Inventec will place all the application software it co-develops with content-service developers on Chunghwa Telecom`s cloud-computing Internet data centers set up around the island. Industry watchers said Inventec and Chunghwa Telecom do not rule out the possibility of founding a joint venture to develop cloud-computing application software. Chunghwa Telecom executives said the jury is still out on the joint venture plan.
…
The idea of the two companies’ online content store is inspired by Apple Store. The online store will help Taiwan`s developers of cloud-computing software open online shops to sell their products.
- Update: Taiwan well poised to break into cloud computing: analyst [Dec 1]:
… Meanwhile, Platform Computing, a leading company in cluster, grid and cloud management software with 80 percent of the global market share, said on Monday that it planned to build an operating center in Taiwan within six months. The Canada-based company expects the new center to handle its cloud computing business in the greater China area …
- Update [Nov 22]: Taiwan is indeed recognizing its window of opportunity in cloud computing space on the Greater China market and elsewhere:
– Taiwan`s Cloud Computing Alliance to Tap Mainland China Market [Nov 22]
– Acer Debuts Cloud Computing Desktop Addressing Digital Home Market [Nov 22]
- Update [Nov 16]: Gene Perez from GMS (Santa Maria, California, US) noted in the comment below, that “labor is pretty damn cheap there as well”. Indeed, the graph below is showing the case for Taiwan (from U.S. Department of Labor, Bureau of Labor Statistics, Table 1 of International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends or http://www.bls.gov/fls/prodsuppt.xls):
- Something similar for Greater China (PRC) from the same source [Nov 17] which shows that manufacturing employees in Greater China get upto 10 times less than even their counterparts in Taiwan — a huge competitive edge for many years and decades ahead which is when combined with cloud computing foundation will be an even more killing combination than upto now:
Table 1. Hourly compensation costs of manufacturing employees in China, 2002-2008
Year National currency basis
(Yuan)U.S. dollar basis
(US$)Index1
(US = 100)2002 4.74 0.57 2.1 2003 5.17 0.62 2.2 2004 5.50 0.66 2.3 2005 5.95 0.73 2.4 2006 6.44 0.81 2.7 20072 8.06 1.06 3.4 2008 9.48 1.36 4.2
The current issue for me is therefore Taiwan related. What is the cloud computing strategy in Taiwan? How that strategy has taken into consideration the huge potential of mainland China? Not only as a market to sell into but as well as a huge and growing ICT industry to collaborate with. What is the role of the government there? Etc.
Below are my findings for which it was more than enough to collect information from the relevant Taiwan Economic News of China Economic News Service (CENS). I would highly recommend to subscribe to that service.
- Items #1-3 are showing that Taiwan’s lead in cloud computing has been well established by their government led efforts in the last two years. Item #4-5 are indicating that from large international ICT players Microsoft has been the first to engage in this very early period. Item #6 is about the first government assisted megaprojects.
- Item #7 is referring to the latest Gartner view on mainland China.
- Item #8 is about the IOT (Internet of Things) situation (notable here is the active liason work of Newland Group of Greater China), while item #9 is about the cloud computing effort as a whole in Taiwan.
- Item #10 is about Intel’s involvement coming quite late to the party.
- Items #11-12 are about Chungwa Telecom (Taiwan’s #1 telecom service provider) efforts being with the government from the very beginning.
- Item #13 is a report about the one year results of another government lead effort to build a mighty e-Book Industry, application-wise closely related to the whole cloud computing strategy.
- Items #14-20 are about some “grass-root” efforts indicating the building strengths of ICT industry players in the joint cloud computing effort:
– #14: HTC which is also the most promising ICT brand in Taiwan [Oct 18]
– #15: a joint brain-drain effort by their major ICT players
– #16: BenQ-AUO Group
– #17: Taiwan Mobile and Far EasTone, not to lag behind Chunghwa Telecom
– #18: Inventec
– #19: Chungwa-Fujitsu collaboration
– #20: Hon Hai Precision Industry Co., known internationally as Foxconn
1. Taiwan`s MIC Prescribes Manufacturing-to-Service Upgrade to Sharpen Edge (2008/12/24)
Despite the global economic downturn, the Ministry of Economic Affairs in Taiwan and its Industry & Technology Intelligence Services (ITIS) have been sponsoring a series of seminars themed “Discovering Taiwan 2008: Building Future Industries.” As part of this program, the Market Intelligence Center (MIC) of the Institute for Information Industry (III) has been exploring, based on tapping opportunities within the information and communication technology (ICT) sector, various issues, including “the developmental trends of Taiwan`s IT sector; building new superiorities in Taiwan`s IT sector by tapping green concepts and values; and the outlook on the ten key IT software issues in 2009.”
The MIC believes that it is critical for Taiwan to upgrade its industrial competitiveness by shifting from manufacturing to offering service-oriented products.
…
Top-10 IT Software Issues
After intensive investigation and interviews with companies and experts, MIC summarizes in the following the 10-top issues concerning the IT software industry in Taiwan.
1. Microsoft … Windows 7 operating system in 2010 …
2. IT software developers … vital to focus on energy-saving, carbon-reduction in 2009, as global information-software developers try to build new products … to help enterprises cut energy consumption and upgrade IT equipment operation efficiency in 2009.
3. The increasingly mature business model Cloud Computing, or the Internet-based “Cloud” development and use of computing. It is computer tech that enables offering IT-related capabilities as service, allowing users to access technology-enabled services online. With such increasingly mature computing meeting the trend of businesses to streamline computing equipment, Cloud would gain more attention and stir more buzz in 2009.
4. The Software as a Service (SaaS) will become a major option for enterprises. Eliminating the need to install, run an application on customers` own PC, SaaS is a model of software deployment that offers as service customers to access, run programs online. Like the Cloud Computing, SaaS allows enterprises to better control costs for software installation, maintenance, making such option a top-choice for SMEs.
5. With SOA (Service Oriented Architecture) solutions for systems development and integration increasingly maturing, and after IT software developers` aggressive promotion, such solution will no longer be a buzzword but more widely adopted in 2009.
6. Open-code software to be used for mobile applications: After Google`s promotion of Linux cellphone open software architecture and Nokia`s release of the Symbian code, open-code software will be rapidly applied in mobile applications in 2009.
7. … information security of smartphone applications …
8. Personal Data Protection Law …
9. Taiwan`s contract software-developers …
10. Knowledge Process Outsourcing or KPO will continue to gain momentum, with the American legal profession already adopting such model. KPO is simply having staff in a different company or subsidiary of the same firm in the same country or offshore do knowledge- and information-related work to save cost, or a form of outsourcing. The highly localized, customized KPO is the next stage in the IT-outsourcing evolution.
2. Four Taiwanese Companies, Institutes Set Up Taiwan Cloud Computing Center (2010/01/29)
The four members include telecom carrier Chunghwa Telecom Co., Ltd. (CHT), anti-virus software company Trend Micro Inc., government-sponsored technology R&D institute Industrial Technology Research Institute (ITRI), and information technology (IT) industry knowledge center Institute for Information Industry (III).
The center will be responsible for helping push six emerging industries on the island into the cloud computing field, and develop Taiwan into a global supply base of cloud-computing equipment and an application headquarters.
Taiwan`s Premier Wu Den-yih said earlier that the TCCC is expected to further upgrade the development of local information and communication technology (ICT) industry and that the Executive Yuan (the Cabinet) has enlisted cloud-computing a key sector for priority development.
…
Targeted cloud-computing applications in Taiwan include medical-care and educational industries in the initial stage; as well as six emerging lines for the second stage, such as green energy, tourism, health-care, biotechnology, dedicated agriculture, and culture/creativity industries.
3. ITRI Kicks Off Operation of Cloud Computing Research Center (2009/12/29)
Since setting up the Cloud Computing Research Center in September of 2009, the ITRI has actively recruited top engineers with related technical background, including Dr. Chiueh Tzi-cker, the head of the center, and sought cooperation with enterprises, in an effort to activate the center as soon as possible and assist industries on the island to carve out new niches through earlier involvement in the technology.
Chiueh noted that the center will be dedicated to development of software, hardware and application services based on cloud computing technology. Plus, he added that ITRI will establish a containerized data center, which will be installed with a total of up to 2,000 servers and related necessary equipment.
4. MOEA Signs MOU With Microsoft to Tap Cloud Computing Technology (2009/11/09)
Besides, Taiwan`s Economic Minister Y.S. Shih and Microsoft`s CEO Steve Ballmer also announced at the MOU signing a joint investment to establish the “Software and Services Excellence Center” on the island, which will employ engineers from Taiwan`s nationally funded Industrial Technology Research Institute and Institute for Information Industry to develop and apply the could computing technology.
Also, Shih said that through collaboration with Microsoft, Taiwanese R&D institute and enterprises can gain invaluable experience in development of application services based on the technology. Besides, he added, technically supported by Microsoft, the government can also effectively assist local enterprises to apply such technology to step up development of the island`s emerging industries as creative culture and e-book reader sectors.
… Microsoft has also signed a cooperation agreement with Taiwan`s largest telecom company, Chunghwa Telecom Co., to develop application services and platforms based on the technology.
5. Microsoft to Pour 90% R&D Resources Into Cloud Computing (2010/10/28)
There are many opportunities for Taiwanese OEMs/ODMs (original equipment /design manufacturers) in the “cloud computing” era, due mainly to strong demand for data-center construction and hardware such as servers, according to Zhang Yaqin, corporate vice president of Microsoft and chairman of Microsoft`s Asia-Pacific R&D Group.
In addition, Zhang said, Taiwanese information technology (IT) hardware makers have enjoyed strong advantages in making terminal products.
In the future, Zhang said at a recent IT industry trend forum held in Taiwan that major battlefields of the IT industry would lie in platforms, cloud computing, and portable devices. Any company that wins in the three fields would be the next-generation leader, Zhang said.
6. Multibillion Cloud Computing Projects Kick Off in Taiwan (2010/07/09)
At a cloud-computing forum recently held in Taipei, attending Taiwan government officials and top executive of Taiwan`s No.1 telecom carrier announced the commencements of their five-year, multibillion-dollar cloud computing projects.
Government representatives said the government will funnel NT$24 billion (US$750 million at US$1:NT$32) in five years into cultivating Taiwan`s cloud-computing industry, with the ultimate goal set to transform the island`s information-communications technology (ICT) industry into the cloud-computing industry.
Chunghwa Telecom Co., Ltd. will invest NT$40 billion (US$1.2 billion) in five years to set up the island`s biggest cloud-operation and data centers, the company`s chairman, S.J. Lu, vowed,
To smoothen the development of the Taiwan industry as expected, a cloud-computing alliance representing around 80 of the island`s manufacturers will set up a system-test platform, according to Lu, who is chairman of the alliance.
7. Gartner Says IT Spending in China Will Reach $216.7 billion in 2010 (2010/05/07)
… the IT economy in China is driven by large verticals, rather than by consumer IT spending; however, it is slowly evolving toward the consumer market.
… Demand from Chinese companies for emerging technologies like software-as-a-service (SaaS), virtualization, cloud computing, unified communications and green IT is low but rising. IT vendors should help their channel partners continue to build skill sets around these emerging technologies, as spending on these technologies may help drive IT spending to 2013 and beyond.
8. MIT-invented IOT Seen as Moneymaker for Taiwan and China (2010/06/29)
Even in this age of lightning speed Internet communication and technologies, the concept of IOT (Internet of Things), attributed to the 1999-founded Auto-ID Center of the Massachusetts Institute of Technology (MIT), is reportedly just catching on with firms in Taiwan and China. IOT, arguably the Net-era sibling of the original universal bar code that is still ubiquitous and tracks goods in quantifiable terms, is manifested as a self-configuring wireless network of sensors whose purpose is to interconnect RFID-tagged routine things via the Internet.
Companies in Taiwan and China eager to tap business opportunities of Internet of Things will form an alliance in late June to develop industry standards for their operations in Greater China.
The alliance will consist of telecoms from China such as China Mobile, China Unicom and China Telecom, as well as those from Taiwan as Chunghwa Telecom, Far EasTone Telecom and Taiwan Mobile. Such move reflects the telecoms` optimism about the potential of IOT, touted as the next major moneymaker in telecommunications valued at US$1 trillion worldwide by 2020, as well as seen by leading economies as a pivotal industry to drive growth and offset economic downturns.
[More information: Heavyweight Manufacturers Co-open Cross-Strait IOT Alliance (2010/07/21); ??? “Sensor China” Internet of Things Alliance established in our city, Wuxi Daily (2010-6-28) ??? <<< the exact relationship is not yet clear ]President Barrack Obama of the U.S. reportedly equates IOT with green energy in degree of importance, believing these two key sectors can generate short and long term benefits.
Futuristic Inventory Management
As with the UPC or barcode, industry executives say that if daily objects like canned goods, books, shoes or auto parts are integrated with micro-identifications that are linked via the Internet, depleting stock or product waste will be minimized as suppliers can track effectively and instantly inventory levels, whether in Mumbai or the Mojave Desert. Industry watchers say that IOT can theoretically encode 50 to 100 trillion objects and track their movements via the Net.
…
China Mobile president J.Z. Wang summarizes IOT as “extensive sensing, reliable transmission, and intelligent treatment.” Market analysts at the Topology Research Institute, a Taiwan-based market consultant, cites a real-world product incorporating extensive sensing: the world`s first IOT-enabled fridge that was recently introduced by the Haier Group, China`s No.1 household appliance maker. Linked via the Net to the supermarket, the fridge has a display panel that tells the user freshness of foods in the supermarket as well as characteristics, origins of food stored in the freezer.
Upbeat Outlook
Despite its budding stage in China, revenue from the IOT sector as from infrared sensors and RFID manufacturing is expected to top US$14.7 billion by the end of this year and US$36.7 billion by 2015.
During a tour in August 2009 of the Wuxi Internet of Things Research Institute, Chinese premier J.B. Wen proposed to set up the “Experience China” center to enable the world to experience everything in China through IOT applications. Now upgraded to a national organization, the center in Wuxi, Jiangsu Province is China`s first IOT city.
Also China has invited Taiwan`s IOT developers to visit the officially-invested IOT facilities in Wuxi, with the invitees including Chunghwa Telecom, D-Link, Industrial Technology Research Institute (ITRI), GemTek, First International Telecom, Tatung, and Alpha Networks.
Wen`s IOT vision and instructions have spawned a slew of developments: Since early this year, China has accelerated interconnecting telecom networks, telecasting and broadcasting networks and the Internet, offering subscribers on a single platform wide ranging services including voice, data and telecasting and broadcasting, with the triple-play network considered the foundation of China`s IOT future.
Vice Chairman of Chinese National Development and Reform Commission (NDRC) X.Q. Zhang says that the commission will aggressively promote six measures to develop IOT and other emerging industries in China, including interconnecting the three networks, inspiring investments in IOT projects, and creating demand for IOT applications.
IOT Fever
Apparently China is serious about building the IOT sector in the nation. Chengdu, capital city of the southwestern province of Sichuan, announced in May a municipal IOT project with estimated revenue of US$4.4 billion; Guangzhou, the capital city of the southernmost province of Guangdong, announced plans to generate IOT revenue of US$14.7 billion in five years; Shannxi Province has launched an IOT alliance; Jiangxu Province has started a plan to build an IOT industry valued at US$58.8 billion; and Beijing announced the establishment of a national committee to set IOT standards.
…
Y.J. Lee, a senior market researcher at Topology, advises Taiwan`s IOT developers to watch closely China`s standardization of its RFID and electronic-labels, as well as try to work with China`s agency on IOT protocols based on its homegrown TD-SCDMA 3G technology and take part in China`s IOT infrastructural projects. Lee also believes that entering China`s market and working with its standard-setters will help Taiwan`s IOT developers penetrate other emerging IOT markets, as well as become a dominant global player.
Lee notes that Taiwan`s IOT developers lag their Chinese counterparts as China Mobile, China Unicom, Invengo Information Technology and Tongfang in terms of network and service technologies, as China offers opportunities for field testing of integrated systems. In contrast, Taiwan is ahead of China in integrated-circuit design, components and equipment manufacturing, making the two sides more friend than foe.
Taiwan Makers Contracted
As such, the Newland Group in China, recognized as the No.1 IOT equipment supplier in Greater China, recently announced it would contract Hon Hai Precision Industry Co., Ltd., United Microelectronics Corp. (UMC), Largan Precision Co., Ltd. and Faraday Technology Corp. as suppliers. [See also: Newland Europe & Taiwan.]
[From that recent announcement: “Wang said she had approached Chairman Terry Gou of the Hon Hai Group and Honorary Vice Chairman John Hsuan of UMC over cooperation deals on Internet of Things. She added that the Internet of Things industry in mainland China and that in Taiwan can complement each other with their own advantages. For instance, Taiwan is good at raid frequency identification (RFID), high-end chips, barcode test, and consumer-premise equipment while the mainland is adept at matrix code and sensor transmission. Newland’s executives pointed out that Newland is moving to integrate upstream, middle-stream and downstream sectors of Internet of Things to constitute a complete supply chain for the mainland’s Internet of Things market.”]
Newland is one of the three Chinese manufacturers contracted by China Telecom, China`s No.1 telecom carrier, to supply IOT equipment.
…
Regarding Taiwan`s lack of field testing of integrated systems, Topology`s Lee suggests Taiwan`s IOT developers focus on applications for urban life, transportation, residence, finance, retail, energy, production, and agriculture.
Wireless Sensor Network
Y.S. Hsieh, another Topology analyst, suggests Taiwan`s equipment supplier emphasize wireless sensor network, with service providers to use the network to develop IOT applications like intelligent data transmission system, homecare for seniors, as well as home and community security. She notes that although manufacturing of WSN equipment as chips, modules and end equipment is mature in Taiwan, very few developers are capable of integrating such equipment and no open interoperability platforms have been set up on the island. These deficiencies hamstring development of Taiwan`s IOT industry, she stresses.
China`s significance in global RFID manufacturing, including manufacturing of tag, reader, and infrastructure equipment, also strengthens its IOT development, according to watchers in Taiwan. China`s RFID strength is driven by robust demand, which totaled around US$1.4 billion in 2008, with the global market valued at US$5.2 billion, up from 2007`s US$4.9 billion.
…
9. Taiwan Sees Sunny Future in Cloud Computing (2010/07/22)
The government of Taiwan is vigorously working with the island`s information and communications technology (ICT) sector on strategies to facilitate the development of cloud-computing industry. The emerging industry has been singled out as an area that could fast-forward the island`s ICT sector into a leading provider of system-integration services incorporating software and hardware.
Cloud computing is a cost-effective alternative for delivering computing power to organizations over the Internet. Computer hardware, software and information are provided online based on demand, like electricity, and service is charged by usage. Some analysts figure that cloud computing can save a company of 200 employees about 30% on software expenses.
Late last year, the United States Federal Government launched the Apps.gov, a cloud-computing application site, which is a major feature of the Obama Administration`s initiative to cut down operating costs while boosting government efficiency. The federal government is estimated to be able to save US$75 billion by offering administrative services via the cloud site.
Government Support
Taiwan`s government-backed Industrial Economics and Knowledge Center (IEK) estimates that the global market for cloud applications and services will top US$160 billion in 2015. The Executive Yuan, Taiwan`s Cabinet, projects the island`s cloud-computing industry will generate revenue totaling NT$1 trillion (US$31.2 billion at US$1:NT$32) and create 50,000 jobs in 2014.
…
The government`s first step to materialize its cloud policy is “Government Cloud” or “G Cloud” plan, which will provide contracts to local manufacturers to help them foster cloud computing capability. “G Cloud” will offer applications associated with small and medium-sized enterprises (SMEs), medical services and healthcare, homeland security, online education, digital content, tax, electronic invoice, trade, and finance services. Applications will be stored in “container data centers,” which eliminate the need to download memory-consuming applications to end-user devices like desktops, laptops, and handheld gadgets.
…
Senior government officials pointed out that South Korean and United States governments have combined information centers in all government organizations across the two countries into two to three centers and are equipping these centers with cloud-computing capability to cut software leasing costs.
Cloud Computing Alliance
An alliance of 65 Taiwanese manufacturers is planning to co-organize a private company to vie for contracts under the ambitious project. The alliance was launched on April 7 with coordination by ITRI. Alliance members include Wistron, Quanta Computer, Inventec, Accton Technology, Chunghwa Telecom, Far EasTone Telecom, and Taiwan Mobile.
… Chunghwa, Taiwan`s No.1 telecom carrier, will help the government foster Taiwan`s cloud-computing industry with its Internet Data Centers (IDCs) across Taiwan. The company is building a center in Banqiao, Taipei County. … Inventec Corp. Chairman Shiqin Li, expects Taiwan to ship its first integrated cloud-computing system by the end of this year. Insiders of the Taiwan industry estimate that the United States or mainland China would be Taiwan`s first export destination.
…
Quanta Computer, the world`s No.2 contract supplier of laptops, has entered into alliance with Chunghwa Telecom to set up a cloud-computing platform for enterprises and will open a cloud-computing company at yearend to sell the applications.
The enterprise cloud-computing platform, Quanta`s vice president, T.J. Fang stresses, will not only provide applications to Taiwan`s 80,000 manufacturers but also to the millions of manufacturers in mainland China. He adds that the platform`s applications may be bundled with Quanta`s servers and storage equipment or even as total solutions.
Currently, Quanta`s enterprise cloud-computing applications will at least include enterprise resource planning (ERP), supply-chain management, work-process management, provision of software crucial to product designs, and emergency response centers (ERCs).
According to Fan, Quanta has been involved in cloud-computing development for some time and sees the new IT sector as a chance to evolve into a software-service provider from a hardware manufacturer. “Quanta has established an R&D center to develop application software and expects cloud computing to bring it another NT$1 trillion [US$31 billion] of revenue after notebook-computer production,” he says. He stresses cloud-computing application software can help small and midsize businesses slash software licensing fees.
…
Microsoft on Board
Taiwan`s strength in developing the cloud-computing industry convinced Microsoft to open a Software and Service Excellence Center (SSEC) in Taiwan, its first on the island and fourth in the world, in early June. Microsoft will work with the first batch of Taiwanese tenants in the center, including Quanta, Inventec and Delta Electronics, to develop new generation of cloud servers.
… Microsoft expects more than 100 Taiwanese ICT companies to join the center in developing cloud computing solutions over the next three years.
Security Concerns
W.N. Jan, a senior consultant and director general of Market Intelligence and Consulting Institute (MIC), categorizes the cloud industry chain into service provision coupled with transmission and service equipment. “MIC`s viewpoint is that service provision involves bigger business opportunities and its business model emphasizes offering services on the Internet. Accordingly, information security will become a top concern in cloud applications,” he notes.
MIC`s surveys, Jan says, show that Taiwan`s enterprises still are hesitant to embrace cloud services all because of security concerns. “CIOs and CTOs are reluctant, or even opposed, to using cloud services,” he stresses. To fix the issue, the Legislative Yuan, he says, is revising an act associated with protection of computer-processed personal data to regulate all enterprises holding personal data.
10. Intel Joins Hands With Taiwan in Developing Cloud-Computing Technology (2010/10/29)
Paul Otellini, president and chief executive officer of Intel, signed a memorandum of understanding (MOU) on cooperation with the Ministry of Economic Affairs (MOEA) yesterday (Oct. 28), aiming to join hands with the Taiwanese government, universities, and enterprises in the development of the cloud-computing industry.
…
Otellini pointed out that the Internet population will top 4 billion in the coming years, leading to the emergence of various Internet-access devices, such as TV and set-top box, which will bring good business opportunities for both Taiwan and Intel.
…
He pointed to the tremendous change in the pipeline for Internet-access devices, whose functions will cover intelligent control, two-way interaction, hi-tech sensing, and distant care, saying changes in this sector in one year will equal changes in the past 50 years. In the future, mobile devices will have constant connection with the Internet and digital signals, enabling people to access information and entertainment services anytime, according to him.
Lu Shyue-ching, chairman of Chunghwa Telecom, reported that his company has signed an MOU with Intel for the joint development of cloud-computing technology, as well as close- and open-end platforms for smart TV. The company has also joined Open Data Center Appliance, in order to accelerate the development of cloud-computing technology. In addition, it signed an MOU with NTT.com the other day for the same purpose.
11. Chunghwa Telecom Projects Sales at NT$220B in 2015 (2010/10/19)
The telecom carrier has designated overseas operation, cloud computing, iEN, movie-on-demand and value-added mobile services as major growth drivers for sales over the next five years. Mainland China is set to be the company`s major overseas market as soon as its mainland branch starts operation early next year.
For cloud computing service, the company will spend NT$40 billion (US$1.29 billion) over next five years beginning this year on installation of cloud computing facilities. The service is estimated to drive up the company`s sales over the next 10 years.
12. Chunghwa Telecom Unveils Five-Year Roadmap (2010/07/27)
Over the next five years, the company`s investments will focus on cloud computing, digital convergence, intelligent energy network, information-communication technology, movie-on-demand (MOD) service, value-added mobile service, and reinvested businesses at home and overseas.
Many of the investment projects are associated with the bright future of related markets in mainland China, where the central government has worked out development projects for intelligent energy network and digital convergence industries.
13. Year One for Taiwan`s e-Book Industry (2010/02/09)
Joining the global rush into the rapidly evolving e-book market, Taiwanese e-reader makers are joining hands with content suppliers in launching e-book services whose reach could extend to the huge market across the Taiwan Strait.
Such ventures were at center stage during the 2010 Taipei International Book Exhibition, held at the Taipei World Trade Center on Jan. 27-Feb. 1.
BenQ, for instance, teamed up with eBook Japan to launch eBook Taiwan during the book fair. eBook Taiwan enables readers to tap a bonanza of digital content via its e-reader, dubbed the BenQ nReader.
Jerry Wang, vice chairman of BenQ, claims that the combination of eBook Taiwan and BenQ nReader offers consumers a reading experience approaching that of print publications and enables them to buy books with just a touch on the e-reader.eBook Taiwan is an open-end platform with a webpage featuring a safe, stable, smooth, and simple design. It serves as a neutral outlet for Taiwan`s digital-content providers, with a reasonable sharing of profits and a DRM (digital rights management) mechanism capable of offering publishers full protection of their rights. Thanks to the support of cutting-edge technologies such as a high-clarity, high-compression post-production tool, chapter-based sales management, and the ability to support multiple formats including ePub, EFI, PDF, and TXT, e-books can be easily put on the shelf of the platform. This capability enhances timeliness and enriches the content of the platform, which in turn will boost consumer willingness to use it.
In addition to the provision of popular books and magazines in traditional Chinese characters, simplified Chinese characters, and Japanese, eBook Taiwan also offers publication and delivery of magazines simultaneously with the print versions. More than 10,000 books and magazines covering a variety of fields are now available on the platform, and readers can even access parts of books and summaries of feature reports in magazines before placing purchase orders.
…
In view of the e-book surge, market insiders are calling 2010 “year one for Taiwan`s e-book industry.” This underscores the rosy outlook of the industry, which has been incorporated into the government`s flagship development plan for the digital content industry. The government predicts that the production value of the local e-book content industry will hit NT$30 billion (US$937 million at NT$32:US$1) in two years and NT$100 billion (US$3 billion) in four years.
…
Attracted by the huge market potential, growing numbers of domestic electronics firms have been jumping onto the bandwagon for e-readers and related products. The Economics Ministry reports that total investment by local firms in e-readers and components/parts has topped NT$15 billion (US$469 million), with major participants including Prime View, BenQ, Delta, Hon Hai, Gold Circuit Electronics, and ASUS.
…
The Topology Research Institute predicts that Taiwan`s e-reader market will reach 100,000 units this year, compared with 1 million in the Chinese market and only a fraction of 9.1 million globally (including 6.8 million in the U.S.). Topology believes that the global e-reader market will remain in the fledgling stage for two more years before embarking on a period of vigorous development.
14. HTC Debuts Two New Models in London (2010/09/16)
Along with the new models, HTC also debuted a free Internet service, dubbed HTCSense-com, which will enable subscribers to tap cloud-computing service offered by HTC. The service is similar to Microsoft’s MyPhone service and Apple’s MobileMe service. The service, for instance, enables owners to give directions to their lost phones via the Internet, such as making it ring, sending messages to the phone for the obtainer, locking up the phone, or even eliminating data stored in the phone.
15. Taiwan`s Hi-Tech Manufacturers Go to U.S. to Solicit Talents (2010/09/13)
Delegation members planned to offer a total of 1,200 jobs covering R&D specialists, market researchers, market managers, and accountants.
The delegation was accompanied by a cloud-computing alliance, which would visit Intel, Microsoft and IBM.
16. BenQ-AUO Group Eyes US$22 B.-beyond Revenue This Year: Chairman Lee (2010/09/01)
According to Lee, BenQ-AUO will focus its future development on medical care, cloud computing, green energy, and environment protection etc.
BenQ-AUO group has opened a hospital in Nanjing, Jiangsu Province of China with more than 3,000 beds. The group is scheduled to inaugurate another big hospital by the end of 2011 in Suzhou, Jiangsu Province of China.
17. Taiwan`s Top 3 Telecom Companies Zero in on Market for Application Services based on Cloud Computing (2010/02/09)
Not to lag behind Chunghwa Telecom, Taiwan Mobile and Far EasTone have been stepping up their business deployment in the emerging segment for cloud computing technology-based services.
For instance, Taiwan Mobile has cooperated with Fubon Financial Group on constructing an extensive cloud computing network for their respective subsidiaries.
… Far EasTone has also been in talk with HP, IBM, Quanta Computer, Data Systems Consulting Co., Ltd. and related software developers on formation of a cooperative alliance, in which the telecom company will take charge of building a cloud computing platform and other members will supply needed software and hardware for operation of the platform.
18. Inventec Announces Venturing Into Cloud Computing, Online Gaming (2009/12/16)
Inventec Corp. of Taiwan recently announced plans to step into the high-potential cloud-computing business, and will provide software download online by the year-end, as well as moving into online gaming in 2010.
… Chiu Chuan-chen, president of Inventec`s software business division, pointed out that his company has been cultivating the software business for more than 10 years and now is the right time to commercialize products. Inventec`s software business would first focus on two major fields, including the intelligent learning and healthcare, while keeping an eye on online gaming.
19. Chunghwa, Fujitsu Collaborate on E-Commerce and Others (2009/11/17)
The pact is part of Chunghwa Telecom`s efforts to enhance cooperative ties with Japanese hi-tech manufacturers. … In the near future, Chunghwa plans to work with Japanese internet-TV, digital-content and TV shopping service providers.
20. Hon Hai Joins Forces With III to Develop Cloud Computing Software (2009/06/03)
Hon Hai Precision Industry Co., Ltd., the largest EMS (electronic manufacturing service) provider, has joined forces with the government-funded Institute for Information Industry (III) of Taiwan to develop Cloud Computing application software as the first Taiwanese company to get engaged in the field.
Hon Hai and III will seek financial aid from the government for establishing the first lab of Cloud Computing as a joint venture between industries and the government on the island. So far, the Ministry of Economic Affairs has already lifted restrictions on official subsidization of development of related application software, paving the way for local companies to dedicate their energies to the field.
Hon Hai has decided to invest a total of NT$1.9 billion (US$58.46 million at US$1: NT$32.5) in constructing an R&D building in Kaohsiung Software Technology Park, southern Taiwan, to specialize in research and development of digital contents and information service offerings.
…
On the other hand, by investing in R&D of Cloud Computing, Hon Hai is to diversify its business operation into information services from manufacturing. Furthermore, the firm plans to apply Cloud Computing platform to the long-distance health care, showing its determination to venture into the medical care industry.
IMT-Advanced (4G) for the next-generations of interactive mobile services, China is triumphant
See also: Mobile Internet (Aug’11) which is a total update on Aug 26, 2011 with a lot of additions to the original July 19, 2010 content on the following subjects:
– LTE and LTE Advanced — HSPA Evolved (parallel to LTE and LTE Advanced) — Heterogeneous networks or HetNets — Femtocells and Picocells — Qualcomm innovations in all that — Ericsson’s LTE Advanced demo — Current roadmaps on evolutions of current 3G+ broadband mobile networks
The International Telecommunication Union (ITU) press release regarding its ITU Radiocommunication Sector (ITU-R) came a few days ago: ITU paves way for next-generation 4G mobile technologies – ITU-R IMT-Advanced 4G standards to usher new era of mobile broadband communications [Oct 21]:
In its recent meeting in Chongqing, China, ITU-R Working Party 5D, which is charged with defining the IMT-Advanced global 4G technologies, reached a milestone in its work by deciding on these technologies for the first release of IMT-Advanced. In the ITU-R Report, which will be published shortly, the LTE-Advanced and WirelessMAN-Advanced technologies were each determined to have successfully met all of the criteria established by ITU-R for the first release of IMT-Advanced. The Report is expected to be approved by ITU Member States at the ITU-R Study Group 5 meeting in Geneva in late November 2010.
… six proposals received by ITU in October 2009 were individually subjected to a rigorous assessment, supported by the work of independent external evaluation groups that had been established around the world. Industry consensus and harmonization fostered by ITU-R among these six proposals have resulted in the consolidation of the proposals into the two agreed IMT-Advanced technologies. These technologies will now move into the final stage of the IMT-Advanced process, which provides for the development in early 2012 of an ITU-R Recommendation specifying the in-depth technical standards for these radio technologies.
- Latest update: China-version iPhones to adopt China Mobile TD-LTE technology, says paper [May 23, 2011] (emphasis is mine)
China Mobile Communications has reached a consensus with Apple under which the next-generation of iPhones to be sold in China will adopt TD-LTE technology developed by China Mobile, the Chinese-language Commercial Times quoted the China-based carrier’s chairman Wang Jianzhou as saying.
China Mobile has begun voice testing on its TD-LTE experimental networks in Shanghai and commercial operations of the 4G networks in China are expected to begin in 2012, the paper said.
By 2012, China Mobile also plans to set up over 40 experimental networks, 10 commercial networks and 20,000 base stations globally to promote the adoption of the TD-LTE technology, the paper added.
The thing which is talked about here is the future of the mobile Internet as presented by my core information article Mobile Internet [July 19]. Anyone not familiar with magic words and numbers mentioned above could easily get the essence of what is going on here from that “down-to-earth” overview. The explanation was started with the nomenclature of the second and third generation (2G and 3G) technology standards we are all using with our phones, smart ones or not. This allowed to present the whole expanded nomenclature in a form of an extended table coming in the end to the fourth generation (4G) technologies as:
| 4G (IMT- Advanced) | 3GPP family | LTE Advanced |
| WiMAX family | IEEE 802.16m now: WirelessMAN-Advanced (“WiMAX 2”) |
The only new name here is WirelessMAN-Advanced, actually corresponding to the next version of WiMAX, we may say it will be a kind of WiMAX 2. In the new naming MAN is standing for Metropolitan Area Network which is indeed a better expression of the fact that with this “WiMAX 2” we are speaking of a high-speed, high-bandwidth efficiency and high-capacity multimedia service specifically designed for both residential and enterprise applications. (As well noted in the title of the excellent 2007 book Mobile WiMAX: Toward Broadband Wireless Metropolitan Area Networks).
Those who are interested in the process which led to the final stage of IMT-Advanced can read the materials which appeared in the No. 2 (Nov. 2008) issue of ITU-R e-Flash about IMT-Advanced. According to the IMT-Advanced submission and evaluation process the six proposals received were:
• Doc. IMT‐ADV/4 ‐ Acknowledgement of candidate submission from IEEE [802.16 Working Group http://wirelessman.org] under Step 3 of the IMT‐Advanced process (IEEE [based on evolving draft of IEEE 802.16m, supporting both TDD and FDD duplexing] technology)
• Doc. IMT‐ADV/5 ‐ Acknowledgement of candidate submission from Japan [ARIB] under Step 3 of the IMT‐Advanced process (IEEE [based on IEEE 802.16m, supporting both TDD and FDD duplexing] technology)
• Doc. IMT‐ADV/6 ‐ Acknowledgement of candidate submission from Japan [ARIB] under Step 3 of the IMT‐Advanced process (3GPP [their LTE Release 10 & beyond proposal with both FDD and TDD components ] technology)
• Doc. IMT‐ADV/7 ‐ Acknowledgement of candidate submission from TTA [Telecom Technology Association, Korea] under Step 3 of the IMT‐Advanced process (IEEE [currently using their own WiBro standard harmonized with IEEE 802.16e and going to evolve from that to 802.06m as this proposal, including both TDD and FDD duplexing] technology)
• Doc. IMT‐ADV/8 ‐ Acknowledgement of candidate submission from 3GPP proponent (3GPP organization partners* of ARIB, ATIS, CCSA, ETSI, TTA AND TTC [see: Global Standards Collaboration in wikipedia]) under Step 3 of the IMT‐Advanced process (3GPP [their LTE Release 10 & beyond proposal with both FDD and TDD components ] technology)
* Organisations explicitly named in the proposal (operators from China, Korea and Japan are highlighted in red): Alcatel-Lucent France, Alcatel-Lucent USA Inc., Alcatel-Lucent Shanghai Bell, AT&T Inc., British Telecommunications Public Ltd. Co, China Mobile Communications Corporation, China Telecommunications Corporation, China Unicom (Hong Kong) Limited, DaTang Telecommunication Technology&Industry Holding Co., Ltd, Electronics and Telecommunications Research Institute (ETRI), eMobile Ltd, Fujitsu Limited, Hitachi Ltd., Huawei Technologies Co. Ltd, Japan Radio Co. Ltd., KDDI Corporation, KT Corporation, LG Electronics Inc., LG TeleCom Ltd., Mitsubishi Electric Corporation, Motorola Inc., NEC Corporation, Nippon Telegraph and Telephone Corporation (NTT), Nokia Corporation, Nokia Siemens Networks GmbH & Co. KG., NTT DoCoMo Inc., OKI Electric Industry Company Ltd. (OKI), Panasonic Corporation, Qualcomm, Inc., Samsung Electronics Co., Ltd, Sharp Corporation, SK Telecom, SOFTBANK MOBILE Corp., Telecom Italia S.p.A., Telefon AB – LM Ericsson, Toshiba Corporation, ZTE Corporation
• Doc. IMT‐ADV/9 ‐ Acknowledgement of candidate submission from China (People´s Republic of) [Chinese administration] under Step 3 of the IMT‐Advanced process (3GPP [based on LTE-Advanced TDD standards developed there] technology)
ViodiView’s contributing editor Alan Weissberger, principal of DCT Advisors (see also his profile on WiMAX360 community site) published an excellent clarification arcticle on the further details: ITU-R Progresses LTE Advanced and WiMax 2.0 as 4G RAN standards [Oct 20]. Some notable excerpts:
- the basis for specifying the “LTE-Advanced” technology in Step 8 is Document IMT-ADV/8, which is technically identical to IMT-ADV/6 and IMT-ADV/9 (except that IMT-ADV/9 contains only the TDD RIT component); and
- the basis for specifying the “WirelessMAN-Advanced” technology in Step 8 is Document IMTADV/4, which is technically identical to IMT-ADV/5 and IMT-ADV/7.
…
We re-iterate that the LTE that will soon be deployed is NOT a 4G technology, but a 3G technology (3GPP Release
that is included in ITU-R M.1457-9 Detailed specifications of the terrestrial radio interfaces of International Mobile Telecommunications-2000 (IMT-2000 recommendation for 3G RANs). We are worn out by all the 4G hype over LTE and Mobile WiMAX and feel compelled to set the record straight. No, 4G is not a technology that’s faster than the initial 3G RANs. ITU-R defines the criteria for 3G and 4G and we wonder why so many pundits make up their own definition.
…
Motivation of LTE Release 8 (soon to be deployed)
Need to ensure the continuity of competitiveness of 3G systems for the future
-User demand for higher data rates and quality of services
-Public Safety optimized system
-Continued demand for cost reduction (CAPEX and OPEX)
-Low complexity
-Avoid unnecessary fragmentation of technologies for paired and unpaired band operationLTE Release 8 Key Features:
…
The 3GPP candidate technology submission for IMT-Advanced (4G) is 3GPP Release 10 & Beyond (LTE-Advanced) has been accepted as a 4G technology at the Chongqing meeting of ITU-R Working Party 5D, having successfully completed Steps 4 through 7 of the IMT-Advanced process in ITU-R, complying with or exceeding the ITU established criteria in all aspects.
Mainland China went enthuasiastic about this ITU milestone. The leading English-language newspaper in the country, China Daily reported on the event as Chinese 4G mobile standard goes global [Oct 20]. A few notable excerpts [emphasis is mine]:
The TD-LTE-Advanced technology has a download speed of 100 megabytes per second, faster than the preceding third-generation TD-SCDMA technology. Industry analysts said Chinese telecom enterprises are set to benefit from the TD-LTE 4G standard, as it will help to open both domestic and overseas markets for them.
“The situation now is very different from 10 years ago, when TD-SCDMA was set up as a 3G international standard,” said Yang Hua, secretary-general of TD Industry Association in China. He said because China lacked an industry eco-system at that time, the use of TD-SCDMA technology was largely restrained to the domestic market. International enterprises were wary of investing in a technology developed in China, especially when it had not undergone a market test.
…
China Mobile launched its TD-SCDMA service in January 2009, and the largest mobile operator in the world will have invested 100 billion yuan ($15 billion) in it by the end of this year. Prior to September, the company had 15.27 million TD-SCDMA subscribers. Overall, it has 507 million subscribers, most of them using second-generation technologies.
…
Nearly all the best known international telecom companies, such as Ericsson, Nokia and Samsung, are engaged in the TD-LTE industry. They are determined not to miss out on the Chinese market again as they did in TD-SCDMA era, Yang at TD Industry Association said. “They lost many China Mobile contracts when bidding against companies such as Huawei and ZTE, because they ignored the development of TD-SCDMA and offered very few competent products,” Yang said.
Shi Guang, secretary-general of TD Forum, said Chinese telecom companies in the TD-LTE industry chain will be presented with a great business opportunity when they enter the international market. “They will go head-to-head with global companies. Who dares say that another Huawei or ZTE may not emerge in the process?” Shi asked.
According to a survey by Ovum, an international market consulting company, the TD-LTE technology will earn about $150 billion in revenue by 2015.
So China is triumphant because they own licences of their home-grown TD-LTE technology, therefore a much bigger chunk of that revenue will come to them (or remain with them) than before. In addition to that they will be able to move to real 4G (LTE Advanced) through their already accelerated TD-LTE program as noted in my post 3.9G TD-LTE rollout in 2012 with integrated 2G, 3G and 4G? [July 19]. Their leading operator, China Mobile, also the one with TD-SCDMA and TD-LTE technologies, published the following roadmap in its August 19 Interim Report (see slide 9):
The US situation has been described in my earlier post, “4G” WiMAX vs. 3.75G HSPA+ [July 24]. Please note that both the current major WiMAX provider, Sprint and the HSPA+ provider T-Mobile are absolutely wrong in calling their offerings 4G. (BTW this is what was meant by Weissberger’s words “We are worn out by all the 4G hype over LTE and Mobile WiMAX and feel compelled to set the record straight”. They are actually not alone with such mislead ing statements among operators.)
A kind of introduction to the worldwide competitive situation has been provided by another post of mine: WiMAX/WiBro <=> TD-LTE and LTE in general [June 28], which is also providing sufficient information on the roadmap of the global LTE leader, the Japanese NTT-DOCOMO . This had also a follow-up: Intel dismisses WiMAX Program Office [July 1]. The Mobile Broadband reality by Akamai [July 29] post provided actual data on average and average maximum connection speeds from 109 mobile carriers around the world.
The most important strategic market assesment, however, is in my post: Could China close the gap in mobile Internet? It should! [July 21]. The most dramatic findings were expressed with the following two diagrams (copied here as a kind of reminder):
October 2010 update
China’s three telecom operators have over 10 mln 3G users each by end-Oct, MIIT [Nov 24]:
According to statistics released on Wednesday by the Ministry of Industry and Information Technology (MIIT), China’s 3G service subscribers reached 38.64 million by the end of October, up 10.4 percent month on month, and up 295.7 percent year on year.
By end of October, China Mobile’s TD subscribers came to 16.98 million, China Unicom’s 3G subscribers amounted to 11.66 million, and China Telecom’s 3G subscribers reached 10 million.
Q3CY10 update
I’ve made an update of the above numbers which is showing a similar gap, but for China Mobile relying on TD-SCDMA and TD-LTE only, there is an even more threatening situation.
China Unicom and China Mobile announced their subscriber statistics for September on Oct. 21 and 20, respectively. For the 3G part the results are 10.554M and 15.279M. Month by month 3G statistics are as shown on the following two diagrams:
The third operator, which also has wire business, China Telecom also released some statistics. Unfortunately they are providing only quarterly 3G subscriber information on their website (see: http://www.chinatelecom-h.com/eng/ir/kpi.php?cat=quarterly ) so I had to rearrange data to quarters in order to show both the absolute number changes and their own 3G penetration rates, as you could see both on the below diagram:
As you could see China Mobile was able to increase its own 3G penetration rate from 1.89% to just 2.68% during the last quarter. At the same time China Unicom had a significant increase of 3G penetration from 4.82% to 6.51%.
China Telecom achieved even more with Q3CY10 penetration rate of 11.03% since they made heavy invesment into CDMA2000 EV-DO 3G technologies. Their chances to grow even spectacularly during the current quarter could be even bigger since they were the first operator to release quite attractive smartphone subscription packages for less than 1,000 yuan [~ US$ 148] apiece. In both Huawei and ZTE versions there is a true, even mid-range level smartphone with 990 yuan calls included!
See:
– China Telecom roll out it’s first 3G-smartphone-Packages around 1000 yuan, with 990 yuan free calls [Oct 21]
– ZTE N600 cheep Android handset spotted [Oct 16]
– Huawei C8500 bargain Android phone hands-on video [Oct 14]
China Mobile therefore is taking urgent actions to accelerate its competitiveness. One of the most important elements is certainly to provide similar to China Telecom’s low priced bundles:
See:
– China Mobile Started Direct Purchasing of 6 mln TD Phones [Oct 22]
–Marvell beaten by Chinese chipmakers in sub 1,000 yuan handset procurement tender of China Mobile [Nov 15]:
… with prices ranging from 350 yuan [US$52.7] to 650 [US$97.8] yuan.
While the latest quarter business performance of China Mobile has been not bad, as reported by China Mobile Jan-Sept net profit up 3.9% on 3G [Oct 20], the same report states that:
China Mobile and its two major rivals, China Unicom (Hong Kong) Ltd. and China Telecom Corp., are competing for subscribers to their 3G services, whose faster data speeds and pricier service plans could boost the companies’ average revenue per user–a key gauge to determine long-term growth for telecommunications operators.
China Mobile’s ARPU fell to CNY72.0 in the nine months ended Sept. 30, from CNY75 a year earlier. The company’s ARPU has fallen as it has pushed farther into less developed regions of China to keep adding subscribers, including users of its less expensive 2G services.
…
Analysts said China Mobile’s introduction of new handsets could boost growth in the firm’s 3G business in coming quarters, though subsidies for these handsets and depreciation expenses for the carrier’s 3G network are likely to continue to weigh on profitability this year. The firm said in a statement its average revenue per minute of usage has been declining due to low usage by new customers, while its value-added services business has become the major driver of revenue growth.
In the mid-term 2012-15, however, China Mobile is going to have enormous advantage as ITU paves way for next-generation 4G mobile technologies one of which is the future Release 10 version of their TD-LTE (China Mobile is calling it TD-LTE+ on its roadmap slide included above). Whether they will be able to exploit that will solely depend on the value added services they should bring out to the market masterfully. But that is another story.
HTC: the most promising ICT brand in Taiwan
Major updates: HTC expects business performance to bottom out in 1Q12 [Feb 7, 2012]
Taiwan-based smartphone vendor HTC expects its business operation in the first quarter of 2012 to bottom out due to a decreased average selling price along with the process of transitioning from old smartphone models to new ones, with consolidated revenues projected to decrease by 31.0-35.9% on quarter to NT$65.0-70.0 billion (US$2.19-2.36 billion) while gross margins and net operating margins are expected to slip to 25% and 7.5% respectively, according to company CFO Winston Yung at an online investor conference on February 6.
HTC expects sales to increase beginning in the second quarter of 2012 along with the launch of several new flagship smartphone models, with gross margins and net operating margins to rise to levels seen in the first three quarters of 2011, Yung indicated.
HTC has been faced with hot competition from Apple and Samsung Electronics in the US market and less competition in the Europe market, but has performed well in the Asia market, especially in China, Yung pointed out.
As smartphones are increasingly popular, HTC will cater to each market segment by launching price competitive models yet with functional differentiation to increase added value to maintain gross margins, Yung pointed out.
While sales performance of LTE (Long Term Evolution) smartphones fell short of expectation in 2011, HTC expects increased adoption of LTE models by mobile telecom carriers in the US, Hong Kong, Japan and South Korea in 2012, Yung indicated.
|
HTC: Financial report (NT$b) |
||||
|
Item |
4Q11 |
Q/Q |
2011 |
Y/Y |
|
Consolidated revenues |
101.42 |
(25.33%) |
465.79 |
67.09% |
|
Gross margin |
27.12 |
down 0.89 percentage point |
28.30% |
down 1.79 percentage points |
|
Net operating margin |
12.71 |
down 2.15 percentage points |
14.77% |
down 1.06 percentage points |
|
Net profit |
10.94 |
(41.40%) |
61.98 |
56.77% |
|
Net earnings per share (NT$) |
13.06 |
73.32 |
||
Source: Company, compiled by Digitimes, February 2012
– Mid-market Android Meltdown – HTC Warns Big Again [Forbes, Feb 6, 2012]
HTC has issued another massive revenue warning.The company is now guiding 1Q12 revenues to T$65-70 Billion, way below the T$89 Billion consensus expectation. January revenue crashed by 52% YoY. You read that right – in the overall smartphone market where at least volume growth probably was close to 50% in January, HTC sales halved year on year. Operating margins are now heading below 8% in 1Q12. What seemed like a triumphant success story just last autumn is rapidly turning into a bitter rout that has some intriguing parallels with Motorola in 2007.
This follows two major warnings from 4Q11 – warnings that should have lowered analyst expectations to realistic levels for 1Q12. Instead, many leading firms like Sanford Bernstein have continued insisting that HTC will do just fine. The size of the latest sales guidance cut clearly indicates that HTC is suffering from a post-Christmas inventory hangover that is far more serious than Wall Street expected.
…
We see once more how dangerous the impulse to protect strong operating margins can be. It demolished Ericsson‘s once so proud handset division in mid-Nineties, it killed Nokia’s innovation in mid-Noughties, it hamstrung Motorola around 2006.
In 2011, HTC refused to dive deep into low-end smartphone market in order to protect its mid-teen operating margins. It opted to compete head-to-head against iPhone at the high-end.
As a result, HTC now risks losing the handset success it spent half a decade building. Welcome to the club.
The market capitalization showing the real value of HTC, however, is just right on the spot:
- US$14.8 billion as of Feb 7, 2012 vs. the US$8.01 on March 1, 2010 when according to the Forbes 2000 list below HTC forged ahead of Acer and Asustek, and thus becoming the source of this original post as “the most promising ICT brand in Taiwan”.
- That promise had already been well fullfilled with Acer just at US$3.88 billion (vs. US$7.6 billion in Marc 1, 2010) market capitalization, and Asustek at US$6.2 billion (vs. US$7.57 billion in Marc 1, 2010).
- The changes in market capitalization are well reflected by the historical values of the HTC stock over the last 5 years:
End of major updates
The news 4 days ago were HTC Becomes Most Profitable Listed Company in Taiwan [Oct 14, 2010]:
Thanks to increasing popularity of smartphones worldwide, the Taiwan-based High Tech Computer Corp. (HTC), a globally leading vendor of smartphones its under own brand, reported an EPS (earnings per share) of NT$30.29 for the first nine months of this year, unseating MediaTek Inc., a world-caliber handset IC designer, as the most profitable listed company on the island in the period. Launching a couple of hot-selling smartphones, such as Desire, Wildfire, Legend and Incredible, to boost its market shares worldwide, HTC has enjoyed explosive sales growth and remained one of the most successful brands in Taiwan.
…. The firm raked in NT$27.058 billion [US$0.88B] in combined revenue for September, sharply up 129.65% from a year earlier to hit an all-time high. This pushed up its combined revenue and net profits for the third quarter of the year to NT$75.849 billion [US$2.47B] and NT$11.098 billion [US$0.36B], or NT$13.61 per share, respectively. Meanwhile, HTC`s aggregate combined revenue and net profits for the first nine months of the year reached NT$174.756 billion [US$5.7B] and NT$24.735 billion [US$0.81B] …
- Update: HTC faces challenge for 2011 shipment goal [July 5, 2011] (emphasis is mine)
HTC has set an internal goal of shipping 54 million smartphones in 2011 but the goal is expected to be difficult to attain because the company will be faced with strong competition from Apple’s new generation of iPhone and Nokia’s Windows Phone 7-based new smartphones in the fourth quarter, according to industry sources in Taiwan.
Based on the ASP of US$359 recorded in the first quarter of 2011, HTC’s second-quarter shipments of smartphones will top 11.5 million units, an increase of 18.6% from 9.7 million units shipped in the first quarter, and better than the company’s projection of 11 million units, the sources indicated.
With demand for HTC’s Android-based smartphones still growing steadily and HTC set to begin selling its naked-eye 3D model, the HTC EVO 3D, in Europe in July, the company is expected to garner revenues of NT$135-140 billion (US$4.7-4.88 billion) in the third quarter with its smartphone shipments reaching 12.5-13 million units, estimated the sources.
HTC is also expected to roll out new models for the year-end holiday season and to fulfill its annual shipment target, said the sources, noting that HTC will be able, at least, to ship 50 million smartphones in 2011, double from the amount shipped in 2010.
- Update: Cher Wang and Wenchi Chen (her spouse) are now Taiwan’s wealthiest people worth US$ 6.8B [Forbes, March, 2011]
- Update: HTC announces December revenues of NT$33 billion [Jan 6, 2011]
Smartphone vendor HTC has announced that unaudited consolidated revenues for December 2010 totaled NT$33.087 billion (US$1.131 billion). Total consolidated revenues of fiscal 2010 came to NT$278.761 billion [US$9.529 billion], up 92.92 % on year. Consolidated operating income was NT$44.185 billion, consolidated net income was NT$44.696 billion before tax and NT$39.330 billion or NT$48.24 a share after tax based on 815,239,000 weighted average number of shares.
- Update: HTC aims to roll out 60 million handsets in 2011 [Dec 10], we may add that this is an almost 100% increase in their market share, from 7.1% in 2010 to 13.6% in 2011, as per the earlier Digitimes Research published forecasts of the device manufacturers
HTC has reportedly informed its suppliers that it will eventually need parts and components for the production of up to 60 million handsets in 2011 compared to shipments of 20 million units projected for 2010, according to industry sources.
- Update:HTC Aims to Double Smartphone Sales in 2011 [Dec 8]
… to 50 million units in 2011 from an estimate of 25 million units for 2010, according to institutional investors.
… Worth mentioning is that HTC is likely to announce its foray into the tablet PC segment soon, and will launch its first model in 2011 as its ace in the hole to drive business operations. So far, the firm has kept completely silent on the product launch plan though.
- Update: HTC November revenues hit record for second time straight [Dec 6]
HTC has reported consolidated revenues of NT$38.484 billion (US$1.258 billion) for November 2010, hitting a monthly record for the second consecutive time. HTC’s November consolidated revenues were 4-10% higher than the originally expected NT$35-37 billion, according to investors. HTC is expected to generate consolidated revenues of NT$33-35 billion in December, resulting in fourth-quarter figures of NT$105 billion [US$ 3.49B] which is higher than HTC’s forecast NT$100 billion, the sources pointed out.
HTC’s shipments of Android and Windows Phone 7 smartphones have been short of demand and its booming shipments will continue and reach 8.5 million units in the first quarter of 2011, the sources indicated.
- Update: HTC acquires office space in Taipei from VIA Technologies [Nov 23]
… The office space is to accommodate HTC’s expanded R&D staff during the construction of its headquarters building 230 meters away from the purchased property, HTC pointed out. The building, with 17 stories and five basement levels, will have a total floor area of 85,620 square meters to accommodate 2,200 employees, with completion scheduled for the end of 2011, HTC indicated. 11 floors of the new building will be used to house R&D capacity, HTC noted.
In related news, HTC is expanding its production capacity at a factory in northern Taiwan, and another in Shanghai, eastern China, with combined monthly capacity to be increased to four million smartphones at the end of 2010, HTC noted. [This will be ~48% of total Taiwan handset output capacity. See the report below.]
- Taiwan handsets – 3Q 2010 [Nov 19]:
Taiwan’s handset shipments hit a record in the third quarter of 2010. First-tier handset vendors Nokia, LG Electronics (LGE), Sony Ericsson and Motorola all expanded JDM or ODM orders to Taiwan, and Taiwan’s own-brand smartphone vendor High Tech Computer (HTC) also saw shipments increase, spurring Taiwan’s total handset shipments to top 21 million units.
In April this year HTC was positioned among the Global 2000 ICT companies from Taiwan as follows (source: Forbes Global 2000 Country List [Apr 21]):
The market value has dramatically changed since then for most of those companies (sources: Forbes Global 2000 Country List [Apr 21] and Reuters Stocks [from which market values were taken on Oct 15]:
The red line above corresponds to the ~10% average increase for those ICT stocks, so here we can also see the above the average new increased (or below the average new decreased) value of the companies by looking at the columns themselves (while the data label numbers show the percentage value as of Oct 15 vs. March 1).
It is also worth to look at the exact numbers (by clicking on the link here you will get a PDF which provides all the source data links as seen on the image by the usual hyperlink presentations, so you could have full background, including company overviews):
One could see here that HTC became the #3 most valuable ICT company from Taiwan jumping from the #5 place to the current #3 in just 7.5 months. Meanwhile such well established Taiwanese brands as Acer and Asustek are much behind of HTC. Also all of the PC/notebook ODMs (Original Design Manufacturers), Quanta, Compal, Wistron and Inventec are much behind HTC now. Only Hon Hai Precision Industries, well known outside Taiwan as Foxconn Technologies, is significantly bigger in market value, but Foxconn Technologies is a huge contract manufacturer owning 50+% of the worldwide Electronics Manufacturing Services (EMS) market. And certainly Taiwan Semiconductor Manufacturing Company (TSMC) is even more valuable, not surprisingly, because TSMC is the #1 chip foundry in the world.
|
Ranking (2008 ranking) |
Brand |
Brand value (US$100 M.) |
|
1 (3) |
Acer |
12.41 |
|
2 (1) |
Trend Micro |
12.35 |
|
3 (2) |
ASUS |
12.26 |
|
4 (4) |
HTC |
12.03 |
|
Source: Taiwan External Trade Development Council (TAITRA) |
||
Here is an Oct 23, 2009 ranking from Global Recession Reshuffles List of Top-20 Taiwanese Brands 2009 rankings show China`s rising [Oct 23, 2009]:
The reason? Here are two press releases from iSuppli which might somewhat explain (I will devote a whole post later to this question):
Android Drives Success in Q2 Smart Phone Market by [Oct 14] – Makers of Android-based handsets outperform the market (emphasis is mine):
Droid phone specialist HTC Corp. achieved industry-leading growth, with its smart phone shipments rising by a stunning 63.1 percent in the second quarter compared to the first.
… HTC’s Android success can be traced to wireless operators that want to showcase the capabilities of their upgraded networks by offering handsets with sophisticated features to subscribers. For example, U.S. wireless carrier Sprint Nextel Corp. is offering HTC’s EVO 4G, a feature-packed Android handset that can capitalize on the high speed of its WiMAX-based 4G network. To keep its momentum going, HTC is expected to offer an Android phone that supports Long Term Evolution (LTE)—the other major standard for 4G.
HTC’s share of global smart phone shipments in the second quarter rose to 8 percent, up from 5.3 percent in the first quarter, allowing the company to solidify its No. 4 position in the market.
HTC Intensifies Android Push, Starts Cloud Service [Sept 14]:
HTC shipped 5.4m smartphones in Q2 2010, an 80 per cent increase year-on-year. HTC owes this strong performance in no small part to its Android-based devices which were greeted with both critical and commercial success.
Initially a white label manufacturer catering to operators, HTC changed course two years ago and invested heavily in building its own brand identity, mostly on the high-to-mid end of the market. This led to the launch of Sense, which is aimed at maintaining a differentiator in a market increasingly crowded by Android devices. Screen Digest believes this strategy should prove successful in helping HTC reach 20m handsets shipped in 2010.
The move towards online services might seem surprising at first given the existing syncing options offered by Google as part of Android, but can be interpreted as a way for HTC to build further loyalty through additional complementary services.
Global Recession Reshuffles List of Top-20 Taiwanese Brands
2009 rankings show China`s rising
Be aware of mainland China and Taiwan stronger manufacturing links in ICT
A current article from Knowledge@Wharton is drawing our attention to the fact that mainland China and Taiwan are fast becoming essentially one in the important ICT sector, and this will further increase their global influence. See: Computer Compatriots: Taiwan and China Draw Economically Closer [Sept 1]
We are talking here about things like the already existing fact that more than 90% of notebook and netbook computers manufactured worldwide are from the combined manufacturing bases of Taiwan and mainland China. Things like that will be significantly increased in the future due to the Economic Cooperation Framework Agreement (ECFA) that Taiwan and China signed in June.
Important updates:
– ECFA to Further Drive China`s Procurements in Taiwan [Jan 5, 2011]: “Last year China organized 13 official buy-Taiwan groups, which together purchased products worth about US$20 billion. This year the projected groups may focus their purchases of 539 duty-free items as on the ECFA fast-track gainer list. The first group to arrive in 2011 will be from Liaoning, said to be led by provincial governor Chen Zhenggao and slated to arrive in Taiwan in mid-February.”
– Taiwanese Banks Lend Over US$31 B. to Clients in China [Oct 11]: “Some say that large enterprises in Taiwan borrow from domestic banks and then transfer part of the loan to affiliates in China. So, including such transferred loans, China would have borrowed more than NT$1 trillion or US$31.25 billion from Taiwan. However, some say that the value is unknown for the exact amount of loans flowing to Taiwanese firms in China through their parent companies in Taiwan is not tallied.”
– ECFA to Bring Strong Boost to Taiwan`s Economy [Sept 21]: “In its initial period, ECFA calls for the removal of tariffs on more than 800 items on an “early-harvest” list in three stages over a two-year period. The list includes 530 items included at Taiwan’s request (worth an annual US$13.8 billion in shipments to China) and 267 items included at China`s request (worth an annual US$2.86 billion in shipments to Taiwan). ECFA will also further open up cross-straits financial dealings. … Given Taiwan`s growing dependence on the Chinese market, the institutionalization of economic relations across the Taiwan Straits is vital to the continued development of the island`s economy.”
– Cross-Strait Investment Protection Agreement May Be Signed by Year End [Sept 17] — With cross-Taiwan Strait Economic Cooperation Agreement (ECFA) having taken effect, Taiwan and China can start talk on investment protection agreement.
– Taiwan should emulate investment strategies of local governments in China, says Acer founder [Sept 29]: “The Taiwan government has been encouraging international enterprises to set up regional headquarters and R&D centers in Taiwan for a while, but has said more than it has actually done for incentives it offered and promises made. … Shih also recommended that Taiwan-based manufacturers shift some of their resources to own-brand business operations and those related to proprietary intellectual property so as to avoid price competition.”
ECFA is prompting both sides to capitalise on this opportunity. Only the Taiwanese interest is, certainly, well manifested in the public media:
– Ministry [of Economic Affairs in Taiwan] works to attract major ICT and auto firms [July 4]
– Ma expects Taiwan to become a regional trade hub after ECFA [Aug 18]
This is all despite of the current political and economic interests, ties:
– Inconvenient impacts of Taiwan-PRC ECFA [Aug 5]
3d Parties are aiming to capitalise on the opportunity as well, which could only enhance the role of new mainland China and Taiwan cooperation further:
– Beyond Geopolitics – The Case for a Free Trade Accord between Europe and Taiwan [July 8, 70 pages]
– ECFA could open way for EU-Taiwan FTA [July 8]
– ECFA could be Taiwan’s window for trade deals: [a European] think tank [July 29]
– Israel welcomes ECFA as good for business [Aug 26]
Keep in mind, however, that ECFA is quite controversial from general social and public interest point of view. There are even some unexpected contradictions for outside observers unaware of the peculiarities of the “internal” situation. To demonstrate that, here is a notable exerpt from Taiwan: Let’s go poking around under the rock of ECFA [Aug 24] blog post, written after the Legislation Yuan of Taiwan approved the ECFA agreement on August 17:
After Hong Kong signed CEPA, it has become the city with the largest wealth inequality in the world. We don’t want an ECFA that let the rich get richer and the poor get poorer.
Some general background information on the “players” and the “play” (not ECFA in particular):
– Taiwan: About Taiwan [April 11, 2008]
Over the past 20 years, Taiwan has become the world’s fourth largest ICT (Information and Communication Technology) hardware producer and holds #1 ranking WW ICT product market share with more than 10 particular products (e.g. Notebook PC, Desktop PC, Computer Motherboard, Computer Server, CDT monitor, LCD monitor, Optical Disk Drive, Digital Still Camera, WLAN, Mobile Phone, and PDA etc.) By estimation, 75% of PCs installed in the world with Windows OS are produced by Taiwanese IT companies. Today, the entire production base has mostly migrated to mainland China due to low cost in labor and land factors. However, the Taiwanese entrepreneurs are dominating at least 75% of the ICT hardware production value produced in the PRC (People’s Republic of China). Impressively, Taiwan is also the fourth largest semiconductor industry in the world. Naturally, Taiwan is a major procurement center (One-Stop-Shopping) for global ICT companies.
– Taiwan [from wikipedia]
– Distinctive Characteristics of China’s Path of ICT Development: A Critical Analysis of Chinese Developmental Strategies in Light of the Eastern Asian Model [May 12, 2008]
– Adapting to the China Challenge: Lessons from experienced multinationals [Sept 20, 2007]
– Sons of The Yellow Emperor Go Online: The State of the Chinese Digital Diaspora [July 2, 2010]
SAP’s Business ByDesign SaaS to be relaunched on July 31 with mobility as one of key attractions
Yesterday’s Q2 financial report from SAP specifically mentions the expansion it made in the volume business as well as the progress in the small and midsized enterprise (SME) segment:
… said Jim Hagemann Snabe, Co-CEO of SAP. “Our success in the SME segment creates a strong foundation for the new version of our on-demand platform SAP Business ByDesign. The new version will be available on time on July 31st and is ready for volume deployment in six countries.”
The company provided a quite interesting video as well: SAP Business ByDesign Goes Mobile [July 26]. “Get an exclusive first look at the latest SAP Business ByDesign software, running on mobile devices such as iPad, iPhone, and BlackBerry. The software will be available in 2011.” There is also a related blog-entry from SAP TV: Exclusive: See what’s coming 2011 – Behind the scenes with a SAP developer [July 27]
In a later video interview given to CNBC (see SAP CEO on Earnings [July 27]) Bill McDermott, Co-CEO of SAP, was describing his company’s outlook as follows:
[2:30] Others have consolidated legacy markets to downsize companies and leverage margin. In the short-term that’s a viable shareholder strategy, no question about it. We believe in organic growth, we believe that customers will run their business with on-premise enterprise applications, they’ll run them on-demand in the cloud, using in-memory technology with real-time analytics, and they’ll run their business on-device.
[3:00] The vision that we have is to connect the virtual boardroom to the shopfloor worker, so on an end-to-end process basis companies are run better, and they are actually managed by exception. So all these knowledge workers that are interned to the desktop can actually make decisions in real-time. So Sybase got us into a new category which is the mobile. I believe to be the new desktop. If you look at markets like China, as an example, three quarters of their knowledge workers have bypassed the desktop and gone right to the mobile.
[3:31] So we are all about innovation. We will let others have their short-term games on the margin. We think customers will appreciate that in the long run, and shareholders too. [3:41]
Mobility has indeed been the major reason why SAP has recently acquired Sybase for approximately $5.8 billion. Other reasons were being very strong in analytics and certainly its traditional database business. See: SAP to acquire Sybase Inc. [May 12]
Strategic Move to Accelerate the Reach of SAP® Solutions across Mobile Platforms, Help Companies Manage and Analyze Business Information and Processes on Any Device
… SAP will accelerate the reach of its solutions across mobile platforms and drive forward the realization of its in-memory computing vision. … For Sybase, SAP in-memory technology will provide the opportunity for dramatic performance improvements to its analytic processing capabilities. Sybase will also be able to bring its complex event processing and analytics expertise, which was built in the financial sector, to customers in other industries, markets and product areas …
“Mobile devices are becoming the preferred interaction point with business applications, whether the user is a factory supervisor, a retail manager or an entrepreneur in a developing nation,” said Jim Hagemann Snabe, co-CEO of SAP and member of the SAP Executive Board. “The combination of SAP and Sybase will give users the option of running their operations from leading mobile devices … In addition, innovation around Sybase’s established database business will pave the way for ‘real’ real-time analytics and finally remove the decade-old barrier between business applications and business intelligence.”
… John Chen, CEO of Sybase, Inc. “… by combining the market leader in enterprise applications with the market leader in enterprise mobility, companies around the world will be able to run their business from many devices. This will drive a new wave of enterprise productivity. … ”
As a new, to be operating as a separate subsidiary of SAP, Sybase has announced a much strengthened mobility offering almost immediately. See: Sybase Introduces Industry’s First Mobility Platform Empowering Enterprises to Better Enable Employees and Engage Customers in New and Innovative Mobile Ways [May 20]
The Sybase Mobility Platform is comprised of the most comprehensive new and industry-proven solutions, including:
- Sybase Mobile Servers including Sybase Unwired Platform (SUP) development, Sybase® Afaria® Device Management Suite, Sybase iAnywhere® Mobile Office and SQL Anywhere®;
- Mobile Applications, including Sybase Mobile Sales for SAP CRM, Sybase Mobile Workflow for SAP Business Suite and Sybase mBanking 365®; and
- Sybase Mobile Services – mCommerce Services : for both developed and emerging markets, Enterprise Services: flexible, high-performance applications and services for mobile marketing and mobile CRM, Operator Services: including unrivalled global reach to 900 mobile operators.
Sybase® Mobile Sales for SAP CRM and Sybase® Mobile Workflow for SAP Business Suite have also earned Sybase an SAP award in the “Technology Innovator of the Year” category. See: Sybase Awarded 2010 SAP® Pinnacle Award [May 20]. These applications, by the way, have been jointly announced well before the acquisition. See: SAP and Sybase Deliver First Set of Applications to Millions of Mobile Workers Worldwide [March 2]
… The population of mobile workers and the number of personally owned devices entering the enterprise is growing exponentially. According to industry analyst group IDC, “The worldwide mobile worker population is set to increase from 919.4 million in 2008, accounting for 29% of the worldwide workforce, to 1.19 billion in 2013, accounting for 34.9% of the workforce.” …
- Sybase® Mobile Sales for SAP CRM automates sales processes, increases productivity and enhances customer service by equipping sales professionals with anywhere, anytime access to SAP CRM 2007 through smartphones such as iPhones and Windows Mobile devices.
- Sybase® Mobile Workflow for SAP Business Suite enables mobile workers to complete business processes — such as workflow items and alerts, time recording and travel requests that require immediate action — through a familiar and secure email inbox.
CNBC’s earlier Why Sybase? [May 17] interview with Bill McDermott has given more insight on whether the mobilization of business is to propel [this] M&A:
[1:31] The main reason for acquiring Sybase was one, mobility. They are the #1 mobile infrastructure company in the world. We want to move our applications to mobile devices. #2 – they are very strong in analytics. So we were already #1 in the world in analytics, and they approach industries such as financial services and public services. And they are growing very fast, and in quick markets like China, where China has bypassed the PC generation and gone right to the mobile. The 3d reason is the database where they have a very strong core business. We believe that in-memory computing combined with their core business will give the customer just an at-a-site-solution that currently does not exist on the market from any vendor. So for all three reasons we felt this was a breakthrough to have that asset. [2:18]
[2:32] We believe very heavily that our strategy was reliant on mobility. … We participate now in a 10 billion market. We wanted to be in a 220 billion market, and to do that you had to get in-memory, you had to get mobile, and you had to get on-demand. Sybase itself touches all three priorities. [2:53]
Note: One can put here indeed press releases that prove Sybase strengths in the #1 and #2 areas. For simplicity I am just giving here the ones that are also related to the China market:
- Sybase Mobile and Data Management Solutions Honored at Annual China IT Users Conference [Dec 18, 2006]
China IT User Community Selects Sybase’s ASE, SQL Anywhere and Business Intelligence Solutions for Four Top Awards - Sybase Solidifies Leadership in China’s Financial Market with US$5 million Agricultural Bank of China Deployment [July 30, 2007]
Sybase IQ Analytics Server Chosen to Support a Leading Chinese Commercial Bank’s Nationwide Information System - Sybase IQ Analytics Server Powers Major Electricity Transmission and Distribution Company in China [July 30, 2007]
Sybase Appointed as Sole Analytics Infrastructure Provider for One of China’s Largest Business Intelligence Projects
Back to the Business ByDesign SaaS! The new customer-centric innovations in the Business ByDesign solution have already been announced and demonstrated at SAPPHIRE® NOW event this year. See: New Release of SAP® Business ByDesign™ Gives Customers In-Memory Analytics, Support for Mobile Devices, and Customizable User Interfaces [May 17]. Of the new attractions mentioned in this headline one needs to mention the incorporation of Microsoft Silverlight technology into the front end. The rest is quite well understandable from the things detailed above.
One innovation mentioned just in the internal text of the press release, however, needs to be mentioned as a key attraction as well:
Single and multi-tenancy support. Customers can now choose either single or multi-tenant topologies as the solution is fully enabled to support both. Other than traditional on-demand offerings, SAP’s multi tenancy concept has been engineered for customer and partner specific business extensions, business configuration and all kind of UI, report and forms flexibility. It leverages SAP’s proven life cycle management system protecting all changes during upgrades. During the planning and engineering phases towards multi-tenancy, SAP collaborated with Intel to create an infrastructure optimized for the massively scalable ‘cloud computing’ environment of SAP Business ByDesign. The Intel® Xeon® Processor is the reference platform for SAP Business ByDesign deployments. The scalability and efficiency of Intel Xeon processors with the Next-Generation Intel® Microarchitecture will enable SAP to achieve even lower TCO for the solution’s infrastructure by delivering equal business capability with a smaller server and carbon footprint, significantly lowering energy consumption compared to previous generation processors.
The reason for full inclusion of that part is quite simple. That single functionality has been missing from this SaaS product and that was one of the major reason why SAP has not been able to enter the SaaS market in a big way so far. Another one has been the clash of its old and new (i.e. on-demand) business models. Here is some earlier information on that:
“What we did discover in the last five or six months is that while we made progress on our TCO model we’re not where we wanted to be (a 10 times TCO reduction),” says Apotheker, in a meeting with a group of Enterprise Irregulars Monday at SAP’s Sapphire conference in Orlando.
- Those Enterprise Irregulars, however, have still a“wait and see” attitude because of the quite chequered history of the product. See: The Return of Business ByDesign and the Future of the On-Demand ERP Market [July 23]
… The rumor mill has been most unkind of late: Rumors have been flying that ByD is going to miss its latest release date, that its marketing plans are DOA, and that SAP is on the verge of laying an egg of colossal size and impact.
The rancor surrounding the July 31 release date of the new ByD reflects a complex history inside SAP and the on-demand market that has clouded a lot of otherwise objective analysis about its prospects, and how important ByD’s success is not just for SAP and its customers, but for the on-demand market as a whole. …
… The other point worth addressing about ByD is that its initial entrance to the market in 2007 came in the midst of a not-so-private battle between ByD’s main advocate, Peter Zencke, and fellow board member Shai Agassi, who wanted the concepts of ByD – model-driven, on-demand ERP – to be embodied in the main SAP suite instead of in a completely new, mid-market product. That battle at the top eventually led to Shai’s departure – Zencke left shortly thereafter – but it left a bad taste in many SAPers’ mouths for the product. The fact that it failed to be economically viable as an on-demand product in its initial release further fueled the ire of its detractors. …
… This internal “polemic”, to be polite about it, reminds me of what Microsoft has been going through in the years since Ray Ozzie first discussed Software + Services as the new direction for Microsoft. Even an outsider can imagine the screaming inside Microsoft about such a radical shift and what it would mean to the king of the desktops. The fact that Steve Ballmer felt compelled three years later to give his now-famous “We’re All In” speech is testimony to how hard it’s been internally for Microsoft to grapple with this paradigm shift. …
… SAP is facing a similar dilemma with ByD. Everything about it – on-demand but not true multi-tenant, requires a major channel that doesn’t exist yet, the potential for cannibalization of other products, the sordid release history, the bad blood inside SAP – means that SAP has a similar requirement to make sure that everyone is walking the walk and talking the talk.
With so much at stake, it’s clear that ByD will be one of the great inflection points in the history of enterprise software, and in many ways its success or failure will define the future of on-demand enterprise software for some time. ByD isn’t just a gamble that SAP can create a product like ByD, it’s also a gamble that there is actually a market out there for what ByD represents. This fact is hardly a given: NetSuite’s struggles to meet its market potential has given many proponents of on-demand ERP pause, as has Workday’s slow slow progress towards a critical mass of customers. …
… If SAP can pull off ByD, that success will create a huge opportunity for others, including NetSuite, by legitimizing a market that to date doesn’t really exist as a billion-plus dollar opportunity. If SAP fails, I fear that this much-needed capability will languish on the sidelines another four or five years, and customers will be all the poorer, literally and figuratively, for that failure.
So, baring some unforeseen glitch, ByD re-enters the market in one short week. Its success or failure will hinge on a number of factors, most important of which will be the SDK that comes out at the end of the year. This is going to be one of the most closely watched software rollouts in a long time, with its repercussions felt across the industry for years to come.
So the relaunch of SAP’s Business ByDesign product should be watched quite carefully on July 31!
Could China close the gap in mobile Internet? It should!
China has a significant gap in mobile Internet with the rest of the world:
– the current [end of H1CY10] share of 3G technologies in China are:
• 1.9% (10.46 million) for TD-SCDMA/China Mobile (w/ 554M subscribers),
• 4.8% (7.56 million) for W-CDMA/China Unicom (w/157M subscribers) and
• 9.6% (7.18 million) for CDMA2000/China Telecom (w/ 74.5M subscribers)
• which is 3.2% (25.2 million) overall 3G share of mobile connections (785.5 million) for China as a whole
– meanwhile W-CDMA (as the dominant 3G technology in the world) has:
• 12% (600 million) of the mobile connections worldwide (5 billion)
• 13.3% (600 million) of the joint GSM+W-CDMA connections worldwide (4.5 billion)
– and even for the more advanced mobile broadband Internet the current estimated share of:
• joint HSPA and EV-DO families is 6.8% (340 million) of the mobile connections worldwide (5 billion)
• HSPA family is 4.2% (~210 million) of the mobile connections worldwide (5 billion)
• HSPA family is 4.7% (~210 million) of the joint GSM+W-CDMA connections worldwide (4.5 billion)
• EV-DO family is 26% (~130 million) of the whole CDMA connections worldwide (500 million)
Closing that gap would be especially difficult because by far the biggest gap –with current 3G share of only 1.9%– is for China Mobile owning 70.5% of mobile connections and providing the China only TD-SCDMA technology as the path to 3G and beyond.
- see: the Note within OPhone OS (OMS) 2.0 based on Android 2.1 [July 5]
- see: Mobile Internet [July 19] (core information)
- follow-up:
– MediaTek, Mstar Push Into TD-SCDMA Market [Oct 21]:
… number of the mainland`s TD-SCDMA subscribers has grown at exponential rate into the second half of this year, especially in the latest two months in which a net one million additional subscribers were signed up each month.
… In light of such rapid growth, providers of wireless solutions are competing to roll out TD-SCDMA solutions. Among them are Leadcore Technology Co., Ltd., a firmware developer held by telecom-equipment supplier Datang Telecom Technology Co. of the mainland in addition to MediaTek, Mstar and Qualcomm Inc.
Leadcore has recently introduced a less expensive TD-SCDMA solution, which is quoted at only US$9. Yulong Computer Telecomm Scientific (Shenzhen) Co., Ltd., a leading supplier of smartphones in China, has reportedly adopted the solution.
MediaTek is developing several solutions including the one called TD Protocol Stack. Industry executives believes the company will make some available by the end of this year.
Spreadtrum Telecommunications Inc., China`s homegrown chip designer, is now the major supplier of TD-SCDMA chips at home.
Pushed by China Mobile, TD-SCDMA handsets and smartphones at retail prices of about 500 yuan (US$75) and 1,000 yuan respectively will be available in the China market in the fourth quarter of 2010.
The TD-SCDMA industry has been developing for 4-5 years, resulting in a supply chain of more than 100 players, according to secretary-general Yang Hua for the TD-SCDMA Industry Alliance. There are 7-8 developers of TD-SCDMA chips currently, with chip prices falling 60-70% over a year to US$8-10 at present, Yang indicated.
Five international and many China-based vendors had launched 461 TD-SCDMA handsets as of the end of August 2010, with Samsung Electronics the largest international vendor, Yang pointed out. However, a single TD-SCDMA model can reach sales of 200,000-300,000 handsets only, a volume too small to be able to push down component costs, according to Taiwan-based handset makers. China Mobile is setting up its fourth-phase TD-SCDMA network of more than 100,000 base stations and expects the number of TD-SCDMA subscribers to increase from 13.42 million currently to 100 million in 2012.
- – China market: 3G subscribers to top 45 million by year-end 2010, says Digitimes Research [Sept 16]. “China Mobile is expected to see the number of its 3G subscribers reach 18.8 million by the end of 2010” [remaining at the same 42% market share as of the end of June 2010].
– 3G Mobile Phone Shipment In China Is Expected To Increase Five-fold In 2010 [July 23]
According to iSuppli Ltd analysis, due to wireless carriers providing heavily subsides, the mobile phones consumer prices fell down. It is expected that China’s domestic 3G mobile phone shipments will grow nearly five times, and the volume is expected to reach 42.97 million in 2010.
… TD-SCDMA mobile phone domestic shipments in 2010 will increase to 20.4 million, from 1.3 million in 2009.
… The iSuppli Corporation predicts that by the end of 2014, the total number of wireless subscribers in China will rise to 1.1 billion, 3G subscribers will increase to 230 million. …
It is worth to copy here the latest chart of 3G growth in China, as well as a table and another chart from the above places, to see that the rate of growth shown so far is not enough:
The Q2CY10 growth rate for China Mobile was 36% which is giving a seemingly impressive 242.4% yearly growth if continued that way. With that China Mobile will have just 35.8 million 3G subscribers by the end of next June which would be still between 5% and 6% of the overall number of their subscribers. Meanwhile the number of W-CDMA Family connections worldwide would probably grow to around 16% (to ~960M, from current 12% i.e. 600M), and even mobile broadband connections worldwide for the HSPA family alone would grow to around 5.7% (to ~340M from current 4.2% i.e. ~210M) of all mobile connections globally (by the end of next June).
I’ve come to these results from the following table and the source data behind that another chart (copied here from Mobile Internet [July 19]:
3.9G TD-LTE rollout in 2012 with integrated 2G, 3G and 4G? [July 19] is already a sign of taking additional extraordinary measures in this regard. For the Chinese it is not a question whether they could close the gap in mobile Internet. They are understanding pretty well that they should close that gap as soon as possible! Whatever it takes.
3.9G TD-LTE rollout in 2012 with integrated 2G, 3G and 4G?
See also: Mobile Internet (Aug’11) which is a total update on Aug 26, 2011 with a lot of additions to the original July 19, 2010 content on the following subjects:
– LTE and LTE Advanced — HSPA Evolved (parallel to LTE and LTE Advanced) — Heterogeneous networks or HetNets — Femtocells and Picocells — Qualcomm innovations in all that — Ericsson’s LTE Advanced demo — Current roadmaps on evolutions of current 3G+ broadband mobile networks
A small news item on DigiTimes last week has gone around the technical web quite fast: China Mobile to expand 4G network trial operations [16 July]
China Mobile Communications will expand the trial operation of its 4G networks in the fourth quarter of 2010 and a successful run of the trials may push China Mobile to start rolling out its 4G infrastructure in 2012, 2-3 years ahead of its original schedule, according to industry sources.
- Latest update: China-version iPhones to adopt China Mobile TD-LTE technology, says paper [May 23, 2011] (emphasis is mine)
China Mobile Communications has reached a consensus with Apple under which the next-generation of iPhones to be sold in China will adopt TD-LTE technology developed by China Mobile, the Chinese-language Commercial Times quoted the China-based carrier’s chairman Wang Jianzhou as saying.
China Mobile has begun voice testing on its TD-LTE experimental networks in Shanghai and commercial operations of the 4G networks in China are expected to begin in 2012, the paper said.
By 2012, China Mobile also plans to set up over 40 experimental networks, 10 commercial networks and 20,000 base stations globally to promote the adoption of the TD-LTE technology, the paper added.
- Update: the rollout could begin even earlier
– China Mobile considering launch of TD-LTE services ahead of schedule [Dec 14]
– China market: China Mobile to set up TD-LTE trial networks in six cities, says media [Nov 2] comes with the information that “China Mobile will invest 1.5 billion yuan (US$225 million) to establish trial networks of its self-developed version of LTE, TD-LTE (time division-Long Term Evolution), covering a total of 3,060 base stations in six large cities in China, according to China-based media CCTTR World Communications. The six large cities are Beijing in the northern region, Shanghai and Nanjing in the eastern region, Xiamen in the southeastern region, Guangzhou and Shenzhen in the southern region, the source indicated.”
– China Mobile: 4G network coming soon [Sept 15] is stating that “4G data card is close to debut and the carrier and partners are working on the research of 4G handset chip … China Mobile is expected to launch 4G mobile communication services as early as 2011 to boost its high-margin data services, according to the GSM Association.”
– China Mobile to set up device sourcing company [Sept 17] is telling that “The planned device-sourcing company will begin to purchase TD-SCDMA-enabled feature phones with prices below 1,000 yuan (US$148) at the end of the year and then shift to smartphones priced below 2,000 yuan [with the above mentioned 4G handset chip I would assume] in the first half of 2011“. - For background information on these technologies see: Mobile Internet
- For background information why such an extraordinary acceleration effort is needed see: Could China close the gap in mobile Internet? It should! [July 19]
- For background information regarding Huawei’s contribution to the Shanghai World Expo’s TD-LTE Demo Network see: Winners–TD-LTE connecting World Expo (PDF) and Winners–The brilliant debut: TD-LTE elevates experience at World Expo (PDF), both are from Huawei’s WinWin E-Zine Issue 6 [Aug 10, 2010 — text only HTML versions: the first and the second].
More information has become available from TMC, last week as well: China Mobile, Huawei roll out China’s first 3G/4G-integrated trial network [July 16]
China Mobile (CHL.NYSE; 00941.HK) and Chinese mobile equipment and network solutions provider Huawei Technologies have finished the first TD-SCDMA/TD-LTE outfield test and completed a series of tests and verifications in Wuxi, Jiangsu province.
The tests show that the 3G/4G-integrated network and smooth evolution are completely feasible.
… the technology will be tested in three Chinese mainland cities in the final quarter of the year, with 100 base stations constructed and 5,000 people invited to use the service.
At the beginning of the trial operation, China Mobile will offer data cards to the users and provide them with smartphones.
Results drew from such tests may facilitate China Mobile to offer 4G services in 2012, earlier than previously expected 2014 to 2015.
An insider at the Ministry of Industry and Information Technology revealed that China Mobile will select three coastal cities to pilot the TD-LTE networks, and Qingdao, Xiamen, Zhuhai, and Wuxi are all candidates.
The insider believes that 2G, 3G and 4G services will all be available to Chinese telecom service subscribers at the same time in future [emphasis mine], rather than high-grade technology substituting the lower-grade options.
A UK report from a day earlier has indicated foreign operator and supplier interest as well: TD-LTE 4G Sweeping the Wireless Broadband Markets in China [July 15]
… a variety of wireless operator companies have actually started shifting to TD-LTE, inside and outside China. Two of the main users recorded are Qualcomm and Yota. … This new technology is expected to hit the markets within two years, after a series of field tests.
Ulf Ewaldsson, Ericsson VP, said, “The Ministry of Industry and Information Technology and China Mobile will start large-scale field tests in the fourth quarter of this year. Ericsson will also take part”.
Ericsson’s strong commitment and technical readiness has already been demonstrated a week ago indeed: First complete TD-LTE solution showcased [July 12]
At a China Mobile event in Shanghai, China today, Ericsson (NASDAQ: ERIC) showcased its complete end-to-end TD-LTE solution for the first time. Together with ST-Ericsson devices, the system successfully showcased super-fast mobile broadband applications such as video on demand (VOD) and video streaming using a live camera.
… ST-Ericsson, a leader in wireless platforms and semiconductors, was the first in the world to demonstrate a handheld LTE device and to achieve LTE and HSPA mobility with a multimode device [emphasis mine]. Available next year, ST-Ericsson’s next generation modem will support both versions of LTE, in addition to TD-SCDMA and HSPA+/EDGE [emphasis mine]. With ST-Ericsson’s products, Ericsson is now the only player with complete end-to-end TD-LTE capabilities in the industry.
- Important addition: TDD-LTE equipments by Q1 2011: Ericsson [July 24]
NEW DELHI, INDIA: Ericsson in its claim has shortened the time period for availability of TDD (time division duplex)-LTE equipment from 2013 end to first quarter of 2011.
Per Thorzell, head, radio Access Network, Ericsson India added that Ericsson also did a TDD-LTE trial run in India using 20 Mhz spectrum and achieved a download speed of 71 mbps per second. … “There are approximately 95 per cent functional similarity between TDD and FDD-LTE. Therefore chipsets that support FDD-LTE will also support TDD-LTE,” … to support TDD-LTE, Ericsson feels there will be dongles as access devices in the first half of 2011 and later handheld devices.
Of the two companies mentioned in the above UK article Yota is a Russia-based mobile operator expanding to other countries worldwide, while Qualcomm is the most influential wireless telecommunications research and development company, as well as the largest fabless chip supplier in the world.
Qualcomm has a unique role in the possible 2-3 years acceleration of the TD-LTE technology. The Casino Royale: The story of Qualcomm [July 12] article from July 16 issue of Forbes India, republished on-line by moneycontrol.com, “India’s No. 1 financial portal” has been summarized on the cover as:
Qualcomm is one of the great technology companies of our times. Its products drive large parts of telecom networks everywhere. Everywhere, except India. Now after almost a decade of trying to open up the Indian market, Qualcomm’s time might finally be here. And it will all because of what Qualcomm learnt in China.
Going into the article one can see what made Rohin Dharmakumar, the author of the article to arrive to such a conclusion. Some excerpts from the point of view of our subject:
They [Qualcomm] had invented a proprietary technology that became the seed for the wireless standard CDMA … CDMA began to be adopted by the world’s mobile operators from the mid-90s after years of relentless hard-selling … , backed up by equally relentless patenting by … engineers in the R&D department. … Today, the company … sits on a pile of over USD 18 billion in cash while generating another USD 2-3 billion in free cash flows every year!
Qualcomm’s model as it exists is simple. Be inventive, file as many patents as possible in wireless communication, and then build products around those or wait for people to queue up to use those patents and pay a nice royalty to the company.
… Qualcomm’s patents are critical to almost all major wireless standards on the GSM, CDMA and even LTE (Long Term Evolution) sides, helping it squeeze a royalty out of quite literally anyone and everyone. An army of its lawyers and patent experts go after any company that dares touch its wireless IP without paying for it.
… The first star that heralded its new fortune was the successful completion of India’s 3G auctions. Because Qualcomm’s IP is embedded in all 3G technologies, it will make a 4-5% cut off every 3G phone that will now be sold in India.
… The second omen was on March 11, at a press conference in New Delhi’s Oberoi hotel, when Kanwalinder Singh, its India head said, “Today I’m very proud to announce that Qualcomm has invested one billion US dollars into India.”
Singh did not spend that money in building offices, hiring thousands of new employees or buying local businesses. He spent it to buy 20 megahertz (MHz) of spectrum in the cities of Mumbai and New Delhi and the states of Haryana and Kerala. Qualcomm was one of the six companies that won precious spectrum to offer high speed “4G” wireless broadband to Indians. The $1 billion spent in India was its single largest bet anywhere around the world.
The funny thing though is that Qualcomm is betting on deploying a technology that it didn’t think much of to begin with, a commercially unproven technology called TD-LTE originally developed by the Chinese.
Learning from the Chinese
The Chinese government, in the mid-90s, decided to develop a technology to avoid paying royalties to Western companies like Qualcomm. They created TD-SCDMA, a 3G wireless standard. But it never really took off*. The Chinese, in order to avoid paying royalties, had to reinvent the wheel. This made their technology cumbersome and inefficient.
* Personal note: TD-SCDMA in fact took off in 2009, and that was just too late only for international acceptance (being a 3G technology). See the 3G China customer base chart in my earlier OPhone OS (OMS) 2.0 based on Android 2.1 [July 5] article.
The Chinese pumped more resources into it and refined it into TD-LTE. They also roped in two large Western partners, Verizon and Vodafone, to conduct joint trials of LTE combing the Western (FD) flavour with its own (TD) one. Julian Grivolas, an analyst with Ovum in Paris who tracks the LTE space closely, says China’s goal was to make sure that this joint LTE becomes the next equivalent of the mobile world’s ubiquitous GSM standard.
But the company that took advantage of this trend the fastest was the one which was the last to join the LTE party — Qualcomm. For that it had to swallow its pride and abandon Ultra Mobile Broadband (UMB), a 4G technology it had been developing for many years. In late 2008, it abandoned UMB to focus exclusively on LTE when it saw big operators tilting towards it. A few years earlier it had already spent over USD 800 million to acquire Flarion, a company with a significant amount of patents in areas related to LTE.
Qualcomm smartly co-opted its erstwhile foe China into becoming an ally by announcing plans to build new “multi-mode” mobile chipset** that would combine the version of LTE that Qualcomm and a galaxy of mobile companies like Ericsson and Nokia had developed along with what the Chinese had developed [emphasis mine].
** Personal note: see Qualcomm Introduces World’s First Complete Multi-mode 3G/LTE Integrated Solution for Smartphones [Feb 16, 2009], Qualcomm Now Sampling Industry’s First Dual-carrier HSPA+ and Multi-Mode 3G/LTE Chipsets for Global Markets [Nov 12, 2009] and Qualcomm to launch TD-SCDMA and TD-LTE next year [Nov 19, 2009]. Update: Qualcomm Now Demonstrating Products Based on LTE TDD Technology — Company on Track with Commercialization of Products Based on LTE TDD Technology with First Devices Expected in Mid-2011 [Sept 8, 2010]. At the same time we had news that Qualcomm now has 4G licensing deals with the big three [Nov 16, 2009]: Qualcomm told its investor meeting that LG has joined Samsung and Nokia in agreeing to pay to use its technology in future 4G products. “This means they have 65% of the handset market signed up to long term royalty agreements [emphasis mine],” JP Morgan analyst Steven O’Brien told Reuters. “We have more certainty in the royalty streams and cashflow streams from the major handset vendors.”
Given that a significant chunk of TD-LTE patents rest with Chinese companies like China Mobile, Huawei and ZTE, the only way Qualcomm would have integrated them into its own offerings would be by cross-licensing*** — basically sharing patents with them. The Chinese are returning the love because a global acceptance of TD-LTE will mean cheaper equipment prices for its mobile operators and larger markets for its equipment vendors.
*** Personal note: There is no information regarding these cross licensing agreements, although they definitely exist. We only know that the Chinese were quite successful in licensing negotiations even before. See CDMA success brings Chinese royalty gripes [Feb 12, 2009]: “… in 2000 Irwin Jacobs [the father of current CEO] negotiated government permission for CDMA to be used in China, Qualcomm granted Chinese manufacturers the best rates in the world — around 2.65% as opposed to 5% for other makers. (Qualcomm neither discloses nor confirms its royalty rates).”
Such an advantage even prompted the following: “In fact, outside of China, TD-SCDMA is generally dismissed as a negotiating ploy by China to obtain acceptable patent cross licensing agreements with Qualcomm, Ericsson and the like.” – see An update on TD-SCDMA, China’s 3G technology [Oct 18, 2007]
With TD-LTE under his belt, [Paul] Jacobs [their CEO] knew he had WiMAX cornered.
What happened to WiMAX in the last month I’ve already described in:
• WiMAX/WiBro <=> TD-LTE and LTE in general [June 28]
• Intel dismisses WiMAX Program Office [July 1]
In addition to that it is also worth to note that LTE is Changing the Landscape of IPR Wealth [May 18, 2010]:
… the 2G, 3G, and 3.5G IPR [Intellectual Property Rights] landscape was dominated by Qualcomm, Nokia, and Ericsson … “While Interdigital and Qualcomm are clear leaders in the global LTE patents portfolio with 21% and 19% market shares respectively of the total number of patents, Huawei comes in third position with 9%, Samsung in fourth with 8%, and Nokia, LG, and Ericsson in joint fifth place, each with 7% market share,” [said Malik] Kamal Saadi [, principal analyst at Informa Telecoms & Media].
… Until now only a third of current global LTE patents could be described as essential but about 60% of them are recognised as having the potential to become essential in the future. Whether or not a patent is viewed as being essential could also vary from one market to another. For example, from the 182 LTE patents contributed by Huawei, 178 are registered in China and only a handful of these could currently be described as essential. …
… Informa Telecoms and Media believes that more than 60% of LTE patents from likes of Qualcomm and Nokia, 50% of LG’s portfolio, 40% of Samsung’s patents, and less than 33% of Ericsson’s portfolio could be described as essential LTE patents so far.
The second omen was on March 11, at a press conference in New Delhi’s Oberoi hotel, when Kanwalinder Singh, its India head said, “Today I’m very proud to announce that Qualcomm has invested one billion US dollars into India.”
Singh did not spend that money in building offices, hiring thousands of new employees or buying local businesses. He spent it to buy 20 megahertz (MHz) of spectrum in the cities of Mumbai and New Delhi and the states of Haryana and Kerala. Qualcomm was one of the six companies that won precious spectrum to offer high speed “4G” wireless broadband to Indians. The $1 billion spent in India was its single largest bet anywhere around the world.
The funny thing though is that Qualcomm is betting on deploying a technology that it didn’t think much of to begin with, a commercially unproven technology called TD-LTE originally developed by the Chinese.
OPhone OS (OMS) 2.0 based on Android 2.1
- Update: China Mobile to Improve Smartphone OS With New Alliance [Dec 13]:
… the carrier announced on Monday it was preparing to establish its Ophone Innovation Alliance, said Bill Huang, general manager of the China Mobile Research Institute.
“Our Ophone strategy is constantly moving forward,” Huang said during in a speech at a conference in Beijing. Huang did not give any specific details about the alliance, but encouraged potential partners to participate once more information is publicized. The company has spent over a year planning the alliance.
The announcement follows China Mobile’s effort to promote its OMS in April, when Huang urged developers in Taiwan to build more mobile applications for the operating system. At the time, Huang said there were around 600 apps developed specifically for Ophones. In contrast, Apple’s App Store features more than 300,000 third-party applications.
Building less expensive smartphones without sacrificing quality is critical to China Mobile’s business strategy, Huang added. “If we can effectively make an advanced smartphone less expensive, then more users will come to use China Mobile’s services in a shorter amount of time,” he said.
China Mobile is also working to introduce more middle and higher-end smartphones for its 3G network, said company chairman Wang Jianzhou during a speech at the conference.
While China Mobile may have a relatively small number of applications for OMS, the company’s app store continues to gain in popularity. Since it opened in 2009, the carrier’s Mobile Market has recorded 70 million downloads, Wang said. The store features apps and multimedia downloads for different mobile operating systems.
- Update: Despite of recent reports on weakening OPhone support within China Mobile (see the below update) there are newer reports pointing just to the opposite direction:
– China Mobile to procure 6 million TD-SCMA handsets, says Chinese media [Oct 8]: “Of the total, 3.6 million will be of entry-level models and 2.4 million mid-range products. … the latest procurement effort is largely due to the fourth phase of the China Mobile’s TD-SCMA network construction. When completed, demand for TD-SCMA end-use products is expected to increase substantially.”
– China market: Inexpensive TD-SCDMA handsets to be available in 4Q10 [Oct 13]: “Pushed by China Mobile, TD-SCDMA handsets and smartphones at retail prices of about 500 yuan (US$75) and 1,000 yuan respectively will be available in the China market in the fourth quarter of 2010. … China Mobile is setting up its fourth-phase TD-SCDMA network of more than 100,000 base stations and expects the number of TD-SCDMA subscribers to increase from 13.42 million currently to 100 million in 2012.”
– China Mobile: 4G network coming soon [Sept 15] is stating that “4G data card is close to debut and the carrier and partners are working on the research of 4G handset chip … China Mobile is expected to launch 4G mobile communication services as early as 2011 to boost its high-margin data services, according to the GSM Association.”
– China Mobile to set up device sourcing company [Sept 17] is telling that “The planned device-sourcing company will begin to purchase TD-SCDMA-enabled feature phones with prices below 1,000 yuan (US$148) at the end of the year and then shift to smartphones priced below 2,000 yuan in the first half of 2011“.
- Update: OPhone fails to connect [Aug 24] which reports that with the change of leadership in June all the technology initiatives started under the previous GM and managed by Bill Huang (Huang Xiaoqing), head of China Mobile’s Research Institute, will get less support — this is the case of OPhone — or even have been put on hold — the case of mobile payment project. Reasons are the insufficient progress. The estimations are, for example, that OPhone sales are less than half of the number of iPhones bought in China. Quite important article on what is going inside China Mobile.
• OPhone 2.0 Platform Debuts in Beijing [June 28]
• Samsung first to unveil handset for oPhone 2.0 [June 29] – important to note: “Nokia is also planning a smartphone for the carrier using the oPhone overlay and hardware specs, but running on Symbian.”
• Samsung I7680 (Oscar) parameters – Google translated from Chinese
• The world’s first mobile phone Samsung I7680 evaluation OMS 2.0 [July 1] Google translated from Chinese
• Page 3: Fusion Android 2.1, OMS 2.0 magnificent transfiguration [From Android2.1 transfiguration OPhone2.0 evaluation Samsung I7680] – [5 July] all Google translated from Chinese
- To understand the other parts of the current Android momentum, please read my other two infonuggets as well:
– Beyond Android 2.1 [July 4]
– Android 2.2 (Froyo) excitement is just the tip of the iceberg for the current Android momentum [July 9] - The mobile Internet technology momentum behind the OPhone OS could be well understood from my another infonugget:
– 3.9G TD-LTE rollout in 2012 with integrated 2G, 3G and 4G? [July 19]
The developer of the platform is the Beijing based Borqs: http://borqs.com/index.jsp. They describe the OPhone OS (short for Open Mobile Phone Operating System) platform here: About OPhone OS. See also the recent interview with their CEO: BORQS Ophone OS & more & the China mobile revolution [May 27], important to note: “Borqs is the only company that has done significant Android customization.”
But the supporter is the world largest mobile phone company: China Mobile wants Android apps for its Ophones [April 7], launching the first version of the platform last year: China Mobile Ophone hopes [Sept 1, 2009], China Mobile Launches OPhone [Sept 1, 2009], China’s first OPhone-based mobile phone hits market [16 Dec, 2009]. The last, OMS 1.5 was Android 1.5 based: OPhone SDK 1.5 New features and API changes ENG.1 [Nov 19, 2009].
Note [updated with June data on July 20]: The 3G customer base of the China Mobile is still embryonic with just 1.9% (10.46 million) of the overall number of customers (554 million) at the end of June 2010. Also this number has not been increased significantly for the last 18 month, as shown by the chart below. Meanwhile the rival China Unicom has 4.8% (7.56 million) of the 2G+3G customer base (157 million) on 3G (by end of June 2010):
Another rival, China Telecom, is not publishing 3G numbers. The MIIT* Q1’CY10 3G numbers for China Telecom (CDMA2000) were 5.57 million, i.e. 8.5% of their total CDMA subscriber base (65.45 million).
*Ministry of Industry and Information Technology
Overall 3G market share in Q1’CY10 according to the above MIIT report: 42.5% China Mobile, 30.8% China Telecom, 26.7% China Unicom. For end of May a China Telecom “official said it now has between 6 million and 7 million 3G subscribers”, i.e. about the same number as China Unicom (6.5 million).
The follow-up MIIT report for end of June 2010 is indicating 7.18 million 3G subscribers for China Telecom. When combined with the company’s July 20 stock market closing report this would be 9.6% of their total CDMA subscriber base (74.52 million). Overall 3G market share at the end of H1’CY10 corresponding to the follow-up MIIT report would be: 41.5% China Mobile (-1% vs. Q1’CY10), 28.5% China Telecom (-2.3% vs. Q1’CY10), 30% China Unicom (+3% vs. Q1’CY10). A significant gain for the W-CDMA!
The 3G numbers in China are well below of other geographies. See: Could China close the gap in mobile Internet? It should! [July 21] The Chinese government and all the three mobile operators are therefore making extraordinary efforts to close the gap between China and the rest of the world.
There is also an OPhone SDN (OPhone Software Developer Network) community site: http://www.ophonesdn.com/. Here you can find the OPhone SDK Documentation in English, currently for v1.5: http://www.ophonesdn.com/documentation/index. The rest is in Chinese.
The platform is also going out of the mainland China:
first, to Taiwan: Taiwan-based III to cooperate with China Mobile to develop OPhone [brief, June 10], China, Taiwan agree on Android, Ophone, WiMax, TD-LTE, more [detailed, June 10]
then to US and RoW: China’s OPhone to find its way to US as Android+ [May 28, 2010]
