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Computex 2005 Taipei, Taiwan Last year the WAVE noticed that Computex had changed from previous years. That change is even more pronounced this year. Recall that Taiwan gained its market position originally as a low cost producer. That has been completely supplanted by China. What is Taiwan to do? It had to go up market and diversify. That is exactly what we see here. What Taiwan has now become is the manager and engineering side of the mainland China supply chain. Yet, China is moving to overtake Taiwan here. We wonder how long the Taiwanese advantage can last.
This is the best PC hardware show in the world. But it is more than this. For example, the single topic pavilions included:
In some areas, such as security, the depth of product was light. But, just the existence of so many pavilions indicates the changes happening in the Taiwan supply side market. We noted other trends this year.
The WAVE sees this as a direct reflection of how Taiwan is adapting to the shift to China for both design and manufacturing. Yet, what is missing?
On the first day of Computex, Agilent announced its laser mouse chips. In booths were posters that said – LaserStream “A whole new experience in optical navigation.” Also on the poster was “tracks over any surface.” Yet, in booth discussions with mouse companies this was blown away. We only surmise that Agilent needs the sales from LaserStream in the competitive mouse chip business – a little hype is ok to promote new technology, so goes the logic. The announcement read:
In the same announcement it was said:
Yet, Agilent was not at Computex 2005 as it was the previous year. What we did notice were the LaserStream posters in a number of booths, mostly the major mouse suppliers. We were dismayed to see the claim that the technology “tracks over any surface” when even the press announcement would not back the claim. The real issue is pricing. Does the market want a technology which is a tracking improvement over LEDs but not a show stopper. At $5 to $7 it seems expensive. Note we found complete optical mouse products in this price range in China.
The market is littered with companies seeking to make a better CPU chip. Underdogs can win, however. AMD is on a roll after being an underdog for years. The announcement of the Athlon 64 x2 by AMD is an example of how a company is keeping Intel on the run. But these X86 products are about doing better in the same market – the core notebook, desktop and server markets. One of the issues is that AMD was able to out innovate Intel where its business model, or pride, would not let it. Specifically, innovating in 64 bit X86 space was counter to the massive investment it was making in Itanium. Intel, only when the market had spoken, switched positions and announced defeat when it embraced X86 64 bit computing. Of course, Intel never announces defeat. This is at the core of disruptive technology. It bites the hardest those which have the most to lose. They are also the ones most unwilling to change. The WAVE came away wondering – is VIA doing the same thing to Intel and the market from the bottom end? As we commented earlier, power is a big issue – what might be called innovation in FANS. Via, via its Centaur Group, has long had a focus on driving power consumption down. In fact, CJ Holthaus, stated that power consumption has been the reason that the X86 architecture has been kept out of handhelds. Using impressive technology to support power states and rapid switching of CPU clock and voltage VIA showed how it can manage power and still do MPEG movie playback. But this technology goes deeper than just power. The C7-M is also about die size 0 30 mmXmm. Thus, there is the opportunity to drive the cost from PCs and portable devices. Eric Chang, Strategic Business Director, VIA, made reference to accomplishing PC penetration in countries such as India and China in his presentation. The WAVE spoke with Eric after his talk. He conceded that to drive these markets, the PC must be priced at $200. The notebook market will be more of a challenge due to the cost of the case, battery and display panel. In order to drive costs out, it is unlikely that we will see the core logic chips combine with the CPU. The reason being that the CPU is always at the leading edge of the process technology and the logic chips are not. Thus, in terms of cost, it will be cheaper to see independent CPU and logic chips. The bottom line is the VIA sees the $200 PC as a reasonable goal. What is important from Computex is that we have seen the first serious prospect of very low cost computing devices that have the power of today’s PC and compatibility. This is very close to the technology which Clayton Christensen studied so extensively in Innovator’s Dilemma – the disk drive by platter diameter. As with most disruptive innovation this will not come from today’s dominant players, be they hardware or software. The other aspect is that with radically lower PC prices, and compatibility with existing software development environments, it is hard to assess what the use of these computing devices will be. Thus, the C7-M announcement today was less about the details of the announcement but more about the disruptive potential of the technology. It tells us we are only at the beginning. As AMD struggled to make X86 clones some 5 years ago it is hard to believe that they would have carved out portions of the market based on innovation. VIA is attempting to do the same. If is succeeded the impacts will go well beyond the PC market we see today.
Last year we spoke at length with Ton Verloop on their voice bridge products. We linked up with Ton again and considerable progress has been made. The product is basically a GSM phone with VoIP that works over a WiFi network. In the booth, Ton made a phone call to his office in Malaysia by just dialing an extension. This was done via a WiFi router they have placed in the booth. One of the problems with such a product is – who will buy it? Ton was quick to respond – it is the enterprise. What they have found is that employees are even calling over the cell phones to other employees also on cell phones while in their offices. When a company has WiFi within its infrastructure the G-Tek phones save money. The phone is just an extension of the corporate phone network. As a result it saves connect time. The phone can be used over any WiFi network. Ton did mention that the WiFi routers should have a SIP server in them and they are working with partners to see that this is available. G-Tek is involved in a major project in Europe where the whole country will be wired with WiFi. The G-Tek phone will be used in this program. They plan on extending the product into new application areas with the addition of e-mail capabilities but Ton stressed that the phone has its strength as a first class audio device.
At Computex there was excitement in the air. Some of the factors that contributed to this include:
Computex is, of itself, a Test Market. Given that few Taiwanese companies have direct markets, Computex is one example of a test market for them. CeBIT is another. That is, they create products which they hope to sell to OEMs or ODMs. These are either shown to existing customers or openly at Computex. It is always fun to look for new products at Computes. This year was even better given the transition spoken of earlier. What do we bring away? Listen to Computex – it is the future and the future is now. |
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