卦Trigram 2.0
Asian Snowcrash

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?

So… the Spice phone, with no screen or non-voice call functions will cost the equivalent of RMB 141? With basic but full-featured phones available at RMB 199, or even RMB99, new - where’s the market, again?

RMB99: advert next to public newspaper board. These boards are still pretty common around Beijing, with the day’s paper there for passersby to read.

RMB 199, in the window of a phone shop at Wudaokou. With a constant influx of new students - Chinese, Western, and (in large numbers) Korean - the phone market is intensely competitive here. A cluster of shops make it a great place to look for that new phone, regardless of budget.

A Cylon Centurion:

A Motorola Smart Rider Phone:

Mao Zedong’s famous dictum says that “the guerrilla lives amongst the people like a fish lives in water”. Without the people, the guerrilla cannot live.

To survive, a large-scale guerrilla movement, or insurgency, must have a message, a purpose, that resonates to at least some degree with the feelings and beliefs of the population in which it exists. There must be enough people who are broadly sympathetic, in order to supply recruits, shelter, and material support.

What does it take to turn the people against the guerrilla?

The people of Afghanistan know what the Taliban are like. The Taliban used to rule the country, and their treatment of women, their bans on popular culture, their public executions, and so on, were not enough to make the people turn against them and stand up to them.

After the American-led invasion, the Taliban were forced to retreat to their heartlands, and the areas of Pakistan where they had deep support. And yet, people there are suddenly prepared to stand up to the Taliban, with force if need be.

What happened?

The Taliban destroyed mobile phone masts.

Claiming that the Pakistani military, and Western armed forces, were tracking militants by locating their phones, the Taliban opted to take down the network - and provoked an immediate and forceful backlash from the ordinary people, for whom the mobile phone has been a life-changing technology. Even the Taliban’s own fighters are angry.

According to Afghanistan’s Minister of Telecommunications:

“The people said please … repair the infrastructure and we will guarantee the security of the tower,” Sangin said. “We believe that if the Taliban continue with these kinds of activities the hatred will increase against them, and as a result we are awaiting a change in their policy.”

Of course, mobile phones are no panacea. We’ve seen plenty of examples of their use to enable terror and death. However, this example clearly shows how the mobile phone is successfully improving the lives of impoverished communities in developing countries, and bringing them the benefits of integration with the wider world.

Just a few photos, taken to test my new Nokia N73; I decided that what I wanted was an affordable phone that can take good quality pictures, and the N73 seemed to fit the bill.

The very first, taken at the counter where I bought the N73. Note the prices of the local-brand phones; even cheaper ones were also available.

Brand names are so important.

Construction and (not so) clear air.

Why are some wrapped, and others not?

A little behind the pack, the IHT has run a feature today on the Spice phone (previously discussed by the Times and Reuters). Niti is worried about the phone, and is concerned that it is patronizing the poor.

I don’t think that’s the case. Niti’s points about the value of the screen, and of data services are all valid. However… let’s remember that the purpose of a company, a business, is not to offer goods or services that ought to exist, but to offer goods or services that will sell… That’s over-simplistic, of course, but it will serve for now.

So, will the Spice phone sell? I think so… but to whom? The people Niti has in mind are, I think, economically-active adults at the bottom of the pyramid. Even if it’s being billed as “the People’s phone”, I don’t think it’s intended for that niche. If it is, then maybe it’s a case of Spice spectacularly misunderstanding the market, rather than being patronising. This segment does need the data services and are more likely to buy a second-hand but more versatile phone for the same price - or so I would have thought, but let’s not underestimate people’s liking for “new and shiny” versus “second-hand and grimy”.

So who is a more likely market? The IHT article backs up and extends my musings when I wrote about this before - a rather more affluent segment, who want a call-only phone for:

• the older generation, eg my parents, who simply want a phone they can use just to keep in touch - usually with friends or family whose numbers they have memorised anyway, from long usage with a landline (or which, more likely, are stored in a battered old paper address book that they certainly are not going to painstakingly copy into a phone);
• parents, who want to give a phone to their school-age child for safety, or for general contact needs, but don’t want the child to get immersed in games, constant SMS exchanges with friends, etc…
• … and who else?

Of course, these markets extend far beyond India. And perhaps I’m wrong - perhaps even at the bottom of the pyramid there is a demand? After all, who exactly is making the enquiries from Africa, Indonesia, etc?

So, some options:

• There is no market at the BoP; Spice are patronising the poor, with the attitude “These people don’t need anything more”;
• There is a market at a slightly higher income bracket, but a niche one (caveat: People’s Phone does not necessarily mean “for the poor”; the original Volkswagen - ie People’s car - was, after all, designed for the aspirational working class/lower middle class. BTW, I invoke Godwin’s Law here: no mention of That Name, please.);
• There is a market at the BoP, and I’ve misjudged the needs of this segment.

As I said before, the proof of the pudding is in the eating. The phone hasn’t actually hit the market yet; let’s see how it sells…

I made some enquiries about the Hedy WP812, that waterproof phone I mentioned recently. Apparently it only costs RMB1000, and it’s available in a store in Zhongguancun, literally just down the road.

Hmmm. I’ll certainly go and look at it. The waterproof feature is of no use to me whatsoever in Beijing, where it almost never rains… could be useful in Singapore’s monsoon seasons, though…. Anyway, it’s billed by Hedy as a part of their business phone range, and the features look pretty good to me; the only drawback is the camera, which is only 1.2 megapixels.

The delivery date for the Meizu M8 has constantly been slipping. Amongst the faithful waiting for the phone to reach market, doubt has been setting in - will the M8 ever actually enter production, or will it become a might-have-been?

For me, it’s already too late. I need to buy a new phone soon and, once I have, I won’t need the M8. Pity, I was looking forward to using a really innovative, China-designed phone.

Anyway, for those who can still afford to wait, Engadget have released these clips of Meizu’s semi-functioning prototype:

 Update:

According to Phone magazine, the people at the Meizu stall are saying that the M8’s launch is 6 months away. Hmmm. I think that’s a killer. By then, the established phone manufacturers will have come up with something better, I would have thought. Perhaps Meizu should have been less ambitious with their first phone….

Just to note this very interesting article in today’s IHT: Making next popular cellphone can be study in psychology. How do we design a phone to make it not just desirable, but also so that it adds maximum value to the user’s lifestyle? Through observation…  I like the point about noting that Chinese users were observed using the light from their phone to help unlock doors in unlit areas (but is this in any way unique to China? Doesn’t everyone do this?). It reminds me of something I read somewhere, now forgotten, saying that where rock fans once held their lighters in the air at concerts, they now hold up their mobile phones. Not something I would know from personal experience, but it makes me wonder what a phone designed for rock fans might be like!