卦Trigram 2.0
Asian Snowcrash

All things change, and the globalized economy is no exception. The globalization of the early noughties was based on cheap oil - but oil isn’t cheap any more. At the same time, globalization took the internet… almost everywhere.  Two stories that I found via Slashdot show future directions…

1. Rising fuel costs make outsourced manufacturing less desireable. The cost of shipping manufactured goods from low-cost countries such as China is now such that it’s beginning to outweigh the price benefits of low wages. As a result, manufacturers in Western countries are becoming competitive again.
2. If the rising cost of oil is reversing the outsourcing of things, there is no such barrier to the outsourcing of knowledge work. Students in the UK have been found outsourcing their assignments to graduates in lower-cost countries. Universities are stumped for a solution. “The problem is definitely getting worse, it is hard to detect, the number of these sites is spreading all the time and it is impossible for us to monitor all of them.”, says one administrator.

Will these two trends develop and become persistent? The consequence will surely be a globalisation very different from what we first anticipated - manufacturing becoming strong and locally-based again, while intellectual work becomes the most competitive (and dishonest?) sector…

Are we heading for a global recession? All of the signs are that the US economy is now in recession. The next thing we find out is how much knock-on damage this will cause in developing markets. Are the Asian markets sufficiently decoupled from the US economy for India-China trade to keep everyone here afloat? We’ll find out in the next few months.

This recession, which was sparked off by the US housing bubble and compounded by bankers’ recklessness, has been a long time coming. Steven Roach at Morgan Stanley was warning about it even before I took my MBA, so it’s not as if we haven’t seen it coming.

What has come up swiftly and without much warning, and may yet bite us hard, is the shortage of food staples - rice, especially. With a number of media sources warning of food riots and social instability as a consequence, this is likely to be tough all around.

The people who are going to suffer the most are the ones Niti is investigating at the bottom of the pyramid - and this is going to be very different from anything we’ve seen before.

I remember, as a child, seeing the pictures of the famine in Cambodia, and the appeals for public donations. I helped to organize a Blue Peter Bring & Buy sale at my primary school to contribute. Soon afterwards, the focus shifted to Ethiopia. Here I oversimplify horribly, of course, but in essence the famine victims here had to be essentially passive, waiting for external food aid to arrive.

In a lesser case of food shortage, citizens in the old Soviet Union had to opportunistically join queues as soon as they saw one forming, hoping it meant that a delivery of food or other scarce goods had just arrived - even when (famously) they often didn’t know what they were waiting for until they reached the head of the queue. This would just be luck of the draw.

What difference will it make when the poor, who are most desperately affected by food shortages, all have mobile phones? Will governments and aid agencies use it to inform people of deliveries, and in this way alleviate anxiety? Will be see spontaneous, SMS-directed “hunger mobs” flash-forming on the rumour of food availability (either delivery, storage or hoarding)? And what will it mean for us when instead of seeing appeals for donations on TV, the hungry millions are calling us for help personally?

Just as with TED, the LIFT08 conference has a large number of utterly fascinating videos of their speakers online. A few days ago, I was watching the keynote speech by Bruce Sterling, and at the end was not impressed. I came away with the impression of a rant about Nicolas Sarkozy and Carla Bruni, who really aren’t a big presence on my Asian radar. I even went so far as to comment in an email to Niti that I’d been disappointed. Still… I guess I should have wondered about that; I’ve been a really big fan of his books. I put it down to an off-day and thought no more about it.

As it happens, I’m a long-time RSS subscriber to Pasta & Vinegar, blogged by Nicolas Nova - who also happens to be LIFT organizer. This morning I opened up a post about Bruce’s speech, which made me go back and watch the video again… and OK, now I see what he was doing. I should have known better than to think that he would have gotten tied up in a discussion of celebrity gossip

In my defence, I can point out that a) I seem to have been far from the only person who didn’t catch the point, and b) which is far more relevant, I’m only a few days away from moving to Beijing, and I didn’t have my full attention on the video. In fact, rather more than half of my attention was at that point devoted to packing, shredding, putting aside for recycling, or otherwise attending to, my dwindling pile of possessions…

So, lesson learned: when Bruce Sterling speaks, give your full attention or you’ll miss something important!

I was impressed as well by Jasmina Tesanovic’s presentation. She was talking about Radio B92, the student radio station that evolved into the multimedia channel for dissent in Slobodan Milosovic’s Serbia. I was following what they were doing at the time, ie mid 90s, especially because they were very innovative in their use of the internet; furthermore, I’ve only just finished reading Matthew Collins’ Guerrilla Radio, which tells the story of B92 during that period - and in which Jasmina’s name appears more than a few times! (Bruce and Jasmina also happen to be married now, which is why I mention them both here!).

Slashphone brings the news that when the Meizu M8 is released in February next year, it will hit the market not just in China, but also in the US. Apparently it will be previewed at a trade show in the States in January.

Hm. So much for my hopes of making a fortune by selling them from China on eBay….

I’ll be in Beijing in February, so it’s likely I’ll be getting one. The question is, do I buy a CECT T100 in the meantime? I’ll have to make that decision in the next couple of days…

New shots of the Meizu M8, aka MiniOne:

A new colour scheme… It seems that the release date has been pushed back to Feb/March next year - around the time I’ll be in Beijing… Pity, had hoped to get one before then… I wonder if it’s any coincidence that the iPhone is due to be released in Asia around the same time….

Update 18 Nov 2007:

This post from Little Red Blog makes me wonder whether the delay is due to licensing issues. On the other hand, Olivia Chung’s article on the liberalization of the phone market - which I wrote about recently - would suggest that this problem should be going away. Anybody know?

Losing my phone recently has focused my attention on design issues in the industry; as I’ve mentioned, I’m hanging on and using my old Nokia 6108 while I wait for my chosen new model - the Meizu M8 - to arrive on the market. The 6108 was the first Nokia model to be designed in China, in Beijing to be exact. Meizu are based in south China, in Guangdong, and seem to be quietly building up a global following, based on the number of web sites dedicated to their products. A couple of weeks ago I also wrote about CECT, another Chinese phone company, and their model with biometric security features - and again, judging from the number of comments, it seems that without the company apparently trying very hard, they seem to be building up a global customer base attracted by the feature sets of the phones, which aren’t provided by the global brands. I know from my own time spent in Beijing, that mobile phone shops are everywhere, and there are many, many local brands.

Given this context, I found an article I just read in Asia Times Online extremely interesting. In China’s phone makers in speed dial mode, Olivia Chung mentions that the Chinese government has just liberalised the rules on phone handset manufacturing and distribution. This means that local manufacturers will be released from a bottleneck that’s been inhibiting their activity. The key market is the rural Chinese population, who are extremely price-sensitive, and have little or no brand loyalty. This means that to makes sales, manufacturers will have to design low-cost phones with very diverse feature sets.

For years, we’ve seen Japan held up as the main source of innovation in the phone sector, with technologies and phone-based activities far in advance of anything we get in ‘the West’. Japan, however, is a very local market: not so many of its innovations actually transfer to other locales. China, however, is different: it’s using the same technologies as ‘the rest of the world’. This means that very soon we’re going to see the fast-forward innovations of Chinese manufacturers, honed in the frantic fight for domestic market share, producing phones that people elsewhere in the world will find highly desireable.

These foreign buyers may not be all that numerous for any given manufacturer or model, just part of the Long Tail. However, it’s inevitable that some will become evangelists for their phones, and brand awareness will spread. It’s also pretty inevitable that there will come a breakthrough product, one that just happens to meet an unexpected demand, and that will really bring Chinese phones to global attention.

The global brands, especially Nokia - through the activities of Jan Chipchase and his colleagues - have been taking an anthropological approach to user needs for a long time, with the aim of designing phones to meet social and psychological niches. (Nokia recently opened the world’s largest Flagship Store in Shanghai, an indication of how seriously they take the Chinese market). Chinese manufacturers will be doing the same by designing a multitude of handsets, letting them loose in the market, and seeing which ones sell: design through survival of the fittest, rather than design by research. I wonder which will be more effective..?

Heh, I’m guessing there’s a niche to be filled by someone: distributing information on new Chinese phone models, and translating the user manuals…

Update 25 Nov 2007:

For some more background information, see this summary of a 2005 report on the Chinese mobile phone design market.

I was writing recently about losing my Nokia 6708, and was talking about it off-line with Niti. One of the annoying things about it was the lack of a password, meaning that the handset can be sold on and re-used by whoever’s got it now. The only security measure available was for the SIM card, not the phone itself; we were wondering why such an obvious and needed feature wasn’t available for what was quite an expensive smartphone.

Happily, my new iPod does have password-protection, so at least if this goes AWOL, no-one will be able to benefit from it…

Anyway, I read an article today on Virtual China, about a Chinese-designed phone that seems to be pretty well-protected, with fingerprint-ID required. This is the CECT T100 (heh, sci-fi fans will be smirking at that). By the way, beware the CECT website - every link seems to open in a new window, and they have horrible background music on every page. But if they can’t do web design, their phones seem to be done very well - to me, it’s a reasonably nice-looking phone, with an interesting set of features that will suit the Chinese businessman on the go! (Not necessarily what I would want in a phone myself, but it features streaming TV and Karaoke as well as the usual multimedia features). Most important, though, is the biometric access control. Pretty cool…

When China Tech News reviewed the T100, the comments list seems to indicate that it already has a substantial global following; the most common query is about the lack of a manual in English. This suggests to me that people are buying it from Chinese suppliers based on its design, but that the company isn’t actively marketing it outside China.

I know from my time living in Beijing that the phone shops are very well-stocked with locally-designed handphones, and it would appear that their quality is just getting better and better. China definitely seems to be innovating fast in this sector, and once they start making a serious effort to market internationally, they would seem set to transform the market - particularly as here in Asia there’s none of this ridiculous locking of handsets to one particular network, as I read about in the US and Europe…

I’m just acting as part of the echo-chamber here, but this article from Ogilvy suggests the rollout has begun, and will really impact from next year. Cool.

A year ago, I bought a Nokia 6708, largely for the stylus input and Chinese dictionary. I was pretty happy with it at first, but I have to say that I gradually became more and more dissatisfied. It blue-screened quite a bit, frequently hung and needed a reboot, and regularlt seemed to just turn itself off. It took ages to boot. The lack of letters on the keyboard gradually became a real nuisance. I found that I hardly ever used the Chinese dictionary. The USB connection to my Windows XP laptop was really fussy, and hardly ever seemed to work, so I couldn’t transfer files. The camera quality was pretty lousy. I began to think about getting a replacement.

Then two weeks ago I accidentally left it in a taxi. I’ve filed lost property reports, but it hasn’t shown up and probably never will. I’ve been using my old Nokia 6108, but it’s really obsolete now - especially as I can’t transfer my contacts from my laptop, and there’s no way I’m going to type them all in manually! I had been planning to hang on a few months until Meizu MiniOne is released, but now I can’t wait that long.

Actually, the timing is a bit serendipitous. I’d also been thinking that I need:

• a music player. The Zling Nax (Chinese clone of an iPod Nano) that I bought as an experiment is actually pretty crap, with terrible battery life and sound.
• mobile internet. The 6708 was actually internet-enabled, but my current phone plan doesn’t include data transfer; I signed up for this plan when I first came to Singapore in 2002! My contract has long since expired, but I’ve never got around to changing anything

I’m even more convinced that I need mobile internet after reading this O’Reilly Radar article by Peter Brantley. The points he makes about the way the Millennials (he just says “younger generation”) work - constantly online, social, self-organising, flat hierarchy - are spot on, and remind me of things I was thinking about quite a bit last year: how is this going to work out in Asia? The cultural changes and power shifts that are being driven by ubiquitous multimedia technology, social tools, and mobile internetmean that it’s not just about management styles any more. Here in Singapore, the government is reaching an uneasy modus vivendi with the internet-enabled voice of its citizens, but I’m not sure how it’s going to work out. During the recent protests in Myanmar, we’ve seen how important mobile phone cameras and internet access were - to the extent that the junta were forced to simply cut off all internet access to the outside world. China, of course, will be watching all of this very carefully indeed. However, I’m straying into what’s going to be a separate blog post!

So: I need a new phone, mobile internet, and an mp3 player. To get internet access, I need to sign a new contract. If I sign a new contract, I get discounts on a number of handsets, one of which is the Nokia N73 “Music Edition” which, to be honest, seems to cover all bases, except that it doesn’t have wifi… Seems to be a good choice, though, at S$368, which is what M1 are offering…