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Monday, October 30, 2006 12:00 AM

Home networking, the Chinese way

Has China finally figured out how to play the technical standards game?

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Monday, October 30, 2006 04:21 PM

Gratias tibi fero...

Thanks for writing "fora." It kind of looks funny in the middle of a bunch of English words, though, doesn't it? Illegitimis non carborundum!

Monday, October 30, 2006 05:38 PM

it's about the brand

I don’t know Andrew…I don’t believe that this IGRS standard will go anywhere. It is not “Who controls the standards controls the widgets”, as you have suggested, but rather “Who controls the brand-name, controls the profit. Who controls the profit controls the standards. Who controls the standards controls the widgets.” And Chinese companies really suck at controlling brand-names.

Sure, Chinese companies will be much more active in the standards-setting bodies. But those groups are always dominated by the big BRAND players. And the brand players (IBM, Intel, AMD, Sony, HP, you name it) have a lot more resources than Chinese companies. For example… ever notice that Intel makes motherboards? They probably 100% sub-contract this out nowadays I imagine. But as late as 1997, they maintained enough motherboard manufacturing capabilities in Puerto Rico and Malaysia to manufacture about 50% of the world’s motherboard market demand. Why did Intel have this spare manufacturing capability for a low-margin component? Because if they needed to, they could flood the market with Pentium CPU boards – complete with their chip-sets, their IP, their CPU – to ensure that Pentium would be the preferred standard instead of AMD.

According to the EE article, and your post, China may be getting somewhere in the standards war because this new standard has domestic popular support. That article in EE times is talking about a technology that has almost no useful installed support. Say it’s installed in PCs and TVs. But currently these two widgets don’t talk to each other and there is not a lot of consumer need for them to talk to each other. Cell phones and computers sometimes talk to each other, and there much consumer demand for that either. Furthermore, it seems that this “standard” is really just a software application that multiple companies have adopted. Not a complex network-layer solution. In short, it’s cheap. Which is good. But the functions are easy to reproduce. For pocket change costs, Sony or Samsung or even BenQ (companies which manufacture phones, TVs, PCs, and home audio equipment) could make the same thing and give it away to Nokia / Motorola / Apple for free. No royalties. End of story.

Well…almost end of story. There is the possibility that Samsung (for example) would adopt the Chinese standard as part of forming a deeper relationship with a supplier. There is the possibility (certainty) the Microsoft will support a standard it likes, and there will be a big War of the Standards. And in such a war, the Chinese standard may sneak on through to acceptance.. Or it may happen that a lot of tech geeks like using the Chinese software (it is an application, so I assume it can be directly used). They then think up some cool, easy things to do with the technology that inspires some companies to make products for this group of market innovators / early adopters. Anyway, it could become popular. But one thing is for sure, it will not become popular based on Chinese consumer adoption.

Tuesday, October 31, 2006 11:16 AM

Property Rights

And will the West be expected to respect those intellectual property rights?

Tuesday, October 31, 2006 05:31 PM

Information Equipment Resource Sharing System Service Standards Working Group

InfERSSSSWoG doesn't sound good to you? :^)

Tuesday, October 31, 2006 08:14 PM

The market will determine the standard.

Whomever have the biggest market will determine the standard(s) because with money rolling in, they can engineered a new and an improved version. Just look at MS's OS. The world is rapidly changing everyday. There is no longer a sure best anymore.

Q

Wednesday, November 1, 2006 10:25 PM

interesting use of the term "protectionist"

When a consortium of Western companies creates a standard that requires the licensing of a pool of patents, giving the companies who created the standard a permanent advantage, for some reason no one uses the term "protectionist". When the Chinese try to play the same game, suddenly the word "protectionist" is used.

Early Chinese attempts failed because they were new to the game, but they'll get better.

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