Is Taiwan’s last chance at tech survival the connected home?

taiwanI’ve just finished another piece for IDG Connect taking apart the Taiwanese technology industry – it seemed like as good a time as any on the back of Computex 2014.

If you haven’t heard of the show it’s the second largest IT event in the world and is held every year in Taipei as it has been for 34 years.

Well, the island formerly known as Formosa has been punching well above its weight on the tech scene for decades now, thanks to lots of government investment, a booming chip industry and a steady stream of bright young engineers and designers pouring from its universities.

But as I found out, many of its major firms are facing an unprecedented set of challenges which could threaten its long term future.

Firstly the PC market is in decline – which is bad news for 4th and 5th placed global brands Acer and Asus. Whether terminal decline we still don’t know but it has certainly meant Taiwan’s major ODM/OEM firms have had to adapt to a new mobile-centric output.

The two big brands mentioned above, however, haven’t done a very convincing job so far.

“The whole shift to mobility including smartphones and tablets is the new growth curve for the whole industry,” Forrester analyst Bryan Wang told me from Computex. “What I have seen is that Taiwanese companies are losing in this space.”

Gartner’s Amy Teng was not much more optimistic.

“These manufacturers have to rely on brand vendors to consume their production outcome. This business relationship is weak because today’s PC supply chain is advanced and standardised enough to transplant from vendor to vendor easily,” she argued.

Teng added that the move from high volume, low customisation products to low volume, highly customised products is a big challenge – especially when these manufacturers are being asked to be more cost effective and quicker to market.

All is not lost, though. The country’s semiconductor firms are still well placed and there are opportunities in other areas for those ODM/OEM giants like Wistron, Foxconn, Quanta and Pegatron.

“Regarding how to overcome, or thrive in the coming decade, I do not see any opportunity in the smartphone/tablet space now. However, Taiwanese companies still stand a chance in the connected home space, which is set to evolve in the next couple of years,” said Wang.

“Home/smart gateways, set-top-boxes and smart routers – these could be the angles. At Computex here, I do see home grid, smart plugs, smart home solutions are evolving as an interesting area.”

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Computex 2013: chips with everything

windows OEM devicesSo that was Computex Taipei 2013. Asia’s largest IT show and the world’s second biggest was dominated this year by the launch of Intel’s 4th generation Haswell processor family, and to be perfectly honest there wasn’t an awful lot of other news knocking around, but here’s my brief take on events.

Local heroes Asus and Acer kicked things off in usual hyperactive fashion with a bevy of tablets, notebooks, smartphones and other hybrid devices. The most notable was probably Asus’ 3-in-1 Transformer Book Trio, which combines a notebook, tablet and even desktop functionality in one.

Acer’s presser was more subdued and it remains to be seen whether it’s done enough to win back some of the market share it’s been hemorrhaging over the past few quarters. It actually also depends on whether users decide they want 2-in-1 notebook/tablets – as Intel believes they do –  or a regular notebook with a smaller companion 7 or 8 inch tablet (phablet) device like the Acer Iconia W3.

How this market shakes out will be interesting to watch and to be perfectly honest no-one knows how it’s going to play out, least of all the many analysts I spoke to. It’s all about price, performance, and user experience – nail those three and as a manufacturer you’re giving yourself the best chance of success. Intel was marketing the hell out of the 2-in-1 concept at the show on the back of its Haswells and Silvermont Atoms, but I’m not convinced this will work out as intended.

It makes sense on paper – a tablet for tablet stuff and a notebook for work, in one hybrid device – but if you’re a fanboi, for example, you’re not going to want to give up your iPad, so a convertible isn’t going to cut it.

Form factor chat aside, Microsoft held its first public demo of Windows 8.1  at the show – the OS Windows 8 should have been. There are a lot of cool features in there – better search, the ability to view several apps on one screen and resize them, and the long awaited return of the Start icon. However, the experts are pretty guarded about whether it will be enough to a) rejuvenate the PC market and b) help Redmond grab more market share in the mobile computing space – tabs, phabs and notebooks.

“Being able to lock it in desktop mode and having a ‘Start Point’ will remove the chief barriers that people have with Windows 8. But that doesn’t necessarily address the things that are holding back the PC market as it is,” Forrester analyst David Johnson told me.

“Right now, at the consumer and enterprise level, non-Windows tablet adoption is massive, and Windows 8.1, while improving the tablet experience, will still be competing with Apple iOS and Android. Secondly, most enterprises are completely distracted by just getting to Windows 7 before the April 2014 deadline. They’re at capacity with that transformation and few will have the resources to worry about Windows 8.1.”

Taiwan was quite honestly the star of Computex this year.

I mean, it always has been, but the lack of news made it even more obvious. This is a country whose technology producers account for 80 per cent of the global “branded” tablet market and over 90 per cent of Intel notebooks. They might all be physically made in China but they’re designed here. The IP, basically, is Taiwanese.

It raises an interesting point about whether the People’s Republic of China can ever hope to emulate its tiny neighbour the Republic of China. The Communist Party desperately wants it to start innovating, but you can’t just turn on that tap at will after decades of stealing and copying IP.

Rubber ducks perfectly illustrate just how far it has yet to go.

Hong Kongers have been fawning over a new installation from Dutchman Florentijn Hofman for weeks now. It’s a giant, six storey, yellow rubber duck floating in Victoria harbour.

Now reports have emerged that similar ducks have been spotted across China, from Wuhan to Xi’an. They say imitation is the sincerest form of flattery, but in the tech world, it’s going to get China absolutely no-where.