iSuppli, the market research firm who seems to know a little bit about everything, has been studying the gray-market cell phone business. The bad news? Business is booming. But on the bright side, a recent crackdown by China officials was more than just a little bit effective.
"Recent developments indicate that the China government is beginning to take seriously the long-festering problem of smuggled handsets and counterfeit handsets, a thorny issue that not only undercuts tax revenues but also tarnishes China's image abroad," said Kevin Wang, director of China Research at iSuppli. "As a result, iSuppli believes that the gray handset market will be greatly affected by the government investigation."
The effect can already be felt in gray market circles, in which the total number of shipments fell by 25 percent in June compared to May. Still, the war is far from won. Looking ahead, iSuppli predicts gray market cell phone shipments to reach 172 million in 2010, up from 145 million in 2009.
Last month, Google stopped automatically redirecting Chinese search traffic to its uncensored Hong Kong site, opting instead for a landing page that contains a link to the uncensored site. The search engine giant was made to rethink its approach after it began to threaten its request for a fresh Internet Content Provider (ICP) license.
Google's legal boss David Drummond had said last month: “It’s clear from conversations we have had with Chinese government officials that they find the redirect unacceptable—and that if we continue redirecting users our Internet Content Provider license will not be renewed (it’s up for renewal on June 30).”
The new approach seems to have done the trick. “We are very pleased that the government has renewed our ICP license and we look forward to continuing to provide web search and local products to our users in China,” Google said on its official blog. The announcement comes after days of suspense surrounding the fate of Google's application for a fresh license.
Apple was on the verge of collapse a bit over a decade ago. But the tide began to turn with the launch of the iPod and fate has been like an Apple fanboy ever since. Contrary to what people might have imagined back then, it owes most of its current success to the wildly popular iOS family of devices and not the Mac. But merely churning out “groundbreaking” iOS-toting products every few years will not help sustain the present rate of growth. Instead, the company will need to tap into emerging markets like China.
Lenovo chairman Liu Chuanzhi believes that China will eventually emerge as the most important market for vendors. He is glad that Apple is ignoring such an important market, letting his company go unchallenged there. “We are lucky that Steve Jobs has such a bad temper and doesn’t care about China. If Apple were to spend the same effort on the Chinese consumer as we do, we would be in trouble,” Liu told the Financial Times during a rather “relaxed” dinner interview. That said, Liu was all praise for Steve Jobs, whom he called a genius and a “big pearl.”
Back in March, Google launched a special page to help users keep track of the availability of its services in mainland China. According to the latest status update, Google's web search service is currently “partially blocked,” meaning that accessibility is anywhere between 10 and 66 percent. While such blockages have been reported on a few occasions in the past as well, the latest comes a day after Google announced that it was stopping the automatic re-routing of Chinese search traffic to its Hong Kong site.
The company says that search queries based on the search engine's query suggestion feature, Google Suggest, are the ones being blocked. “Normal searches that do not use query suggestions are unaffected. We have updated our China status page with the latest information,” Jay Nancarrow, a Google spokesman, said.
Google will stop redirecting Chinese users to its uncensored Hong Kong site as it looks to maneuver itself into a more conciliatory posture. Its Internet Content Provider license is scheduled to come up for renewal on Wednesday. The Chinese authorities have warned Google that it will be denied a fresh license if it continues redirecting Chinese search traffic to its Hong Kong site. Unwilling to sacrifice its presence in the most populous internet market, the company has opted for an alternative to automatic redirection. That said, it won't be rolling back the clock to the uncomplicated days of censored search results any time soon.
Instead, Chinese users will soon begin seeing a landing page on Google.cn that links to its Hong Kong site, leaving the choice of clicking through to the uncensored search site with the user. In fact, it has already begun directing some Chinese users to the new landing page. The company has applied for a new license “based on this approach.”
“Without an ICP license, we can’t operate a commercial website like Google.cn—so Google would effectively go dark in China,” David Drummond, Google's Chief Legal Officer, wrote in a blog post Monday. “That’s a prospect dreaded by many of our Chinese users, who have been vocal about their desire to keep Google.cn alive. We have therefore been looking at possible alternatives, and instead of automatically redirecting all our users, we have started taking a small percentage of them to a landing page on Google.cn that links to Google.com.hk.”
Eighteen online map providers have won the nod from China's State Bureau of Surveying and Mapping (SBSM), and are now officially authorized to ply their trade in the world's most populous country (and internet market) – a new regulation requires that all surveying and mapping services obtain official sanction by the end of this year. According to the China Daily, all the mapping services on the list are domestically owned, even though foreign companies were among about 30 companies that have applied for a license.
"According to China's Surveying and Mapping Law, foreign firms are not allowed to provide surveying and mapping services. Their activities in China must be under joint ventures or in partnership with domestic firms," the SBSM said.
However, all is not lost for the foreign companies as the SSBM is still considering applications from those eligible to apply under Chinese law. A few weeks ago, the Wall Street Journal reported that Google has already applied for a license for its Google Maps service. But Google China did not return the China Daily's request for a comment.
Unlike its search operations, which it shifted to Hong Kong in March, Google's mapping service continues to be operated from mainland China. Even Baidu has yet to get the nod for its own mapping service.
Acer is well on course to overtake Hewlett-Packard as the world's leading laptop vendor by the end of this year, according to Chairman J.T. Wang. He said that better-than-expected performance in some countries should see revenues jump 10-15 percent sequentially in the third quarter. He made the comments while addressing shareholders at a meeting.
However, Acer may have already pipped HP to the top spot in the netbook market. Gartner's research shows that the Taiwanese PC vendor finished the first quarter as the world's leading notebook seller ahead of HP, though the gap between the two was marginal – 9.49 million notebooks to HP's 9.47 million.
Wang said that the company has managed to grow even in the face of the ongoing debt crisis in Europe. More importantly, Acer hasn't resorted to price hikes to offset the recent wage increases in China. Moving forward, the world's number two PC vendor hopes to make a dent in the smartphone market aided by Google Android.
According to the latest list of the world's 500 fastest supercomputers, China is home to two of the top ten machines, including Nebulae, the second fastest supercomputer on the planet.
"China's ambitions to enter the supercomputing arena have become obvious," said the compilers of the list.
In terms of theoretical peak performance, Nebulae leads the pack with 2.98 petaflops, the highest ever on the Top 500 list. Nebulae hasn't actually achieved that level of performance, however, so far topping out at 1.271 PFlop/s. Jaguar, the world's fastest supercomputer, resides in Tennessee and holds the record with 1.75 PFlop/s, though its theoretical peak performance is 2.3 PFlop/s.
China is now home to 24 of the top 500 supercomputers in the world.
Location-based social network Foursquare has run into the Great Firewall of China. The censors in China blocked access to the popular geosocial networking service after users began using it to commemorate the 21st anniversary of the Tiananmen Square massacre.
China is not only vying for the top economy crown but also breathing down America's neck in a panoply of key industries. Take for example the global PC market, where it is currently ranked second - just behind the US - with somewhere between 15 to 20 percent of all PC sales. Its rise to the top of the PC market is most likely to happen sometime this year.
So the soon-to-be world's biggest computer market must have the undivided attention of Microsoft then? Not really. Not until China respects intellectual property rights and clamps down on software piracy. Microsoft after all only owes 1 percent of its total revenue to the Chinese market. According to Steve Ballmer, the company sees greater promise in countries like India and Indonesia.
The Microsoft CEO told media persons in Singapore that intellectual property protection in these two countries is far better than China. He also shared his concern over the ongoing debt crisis in Europe. Ballmer fears a possible global fallout from Europe's debt crisis.