MediaTek-Android Deal to Grow Shanzhai Further?

According to a Network World article, Taiwanese firm MediaTek has struck a deal with Google to release low-cost chipsets specifically for Android. For those familiar with the Shanzhai concept and market (read here for more info), this could be a game changer in developing markets where this approach continues to grow in strength.

For those that don’t know, MediaTek has for years been the supplier of a “system on a chip” that many China-based handset manufacturers have used to eat away at the market shares of many mobile giants like Nokia, Moto, and Samsung. Collectively, they are labeled as “Shanzhai” and are as much a culture as a business. Some of them are the source of fake name-brand phones, but many develop their own (creative and hilarious) designs. When you have a company like MediaTek who can provide a cheap hardware solution, it becomes easy for new companies to put out their own phone model.

So how does this new announcement affect the Shanzhai ecosystem?

Even though MediaTek partnered with Microsoft, a lower-cost Android platform provides a real weapon. Not only do they make a significant jump in terms of UI and functionality, they get access to a growing developer base. On some metrics, this could allow them to stay on par with other big-brands using Android, and maybe even ahead of Nokia/Symbian. Obviously they lack the marketing and distribution to really go big, but 1000 little guys each carrying a pretty big gun has the potential to do serious damage to existing players.

Not only is the Shanzhai movement strong in China, but their products are making inroads into India and Africa, which are strongholds of companies like Nokia. Africa is a rapidly growing mobile market, one that is still not yet one. If any of the Chinese manufactures (even a Shanzhai one) were to overcome the perceived issue of Chinese-made products, things could change. And in markets like India, where once again Nokia has a huge brand preference, a Shanzhai-Android combination could start tilting the market. As a market that values new features at an extremely low price, this new type of competitor could sway over many of the locals.

Why Apple Has Been Successful

Apple Study: 8 easy steps to beat Microsoft (and Google)

I would argue that the title of this presentation is a bit misleading; Google and Microsoft do employ some of the key points from this presentation, just maybe not always with the same effectiveness. Also, one could also each company  holds a unique view of what constitutes value, progress, and success.
Regardless, they’ve done a nice job distilling the key components of the Apple approach. Many of these have been discussed ad naseum in other places, so the conciseness of this report much easier to digest.
A few of my favorite points were:
Apple re-legitimize vertical integration (slide 10,11): It seems a few years ago “vertical integration” was almost a curse word. Apple has definitely resuscitated this approach. However, I believe its more a result of their strategy to control the user experience that pushes them into this model rather than some innate superiority to this approach. It has failed for them in the past, so time will tell if they can maintain this structure moving forward.
App Store revenues a drop in the bucket (slide 16): I didn’t know this, I was always under the impression this was a huge money-maker for them. Considering the content-providers involved, one could assume they must take a large cut. If this is really a driver for their hardware, as the report indicates, one has to wonder what would happen if they actually started feeling price pressure on their physical products. I guess it will continue to make sense for them not to license out their software assets. Letting lower-cost manufacturers fight price wars with you and others would definitely erode their margins quickly.
Integration reinforced by retail strategy (slide 24): Can we just retire the words “halo effect” sooner than later? I admit it, this phrase is a personal pet peeve.
iPad embodies the transition to post-PC era (slide 34): Gotta love the “truck” versus “car” analogy here. I’m still not on-board with the post-PC era yet, but that may be due to the fact I’m a truck guy.  Unless  new innovations start pushing the boundaries of existing hardware, I might start migrating to a “car”.
Overview of Apple, Microsoft, and Google (slide 39): I’d love to know what the reasons are for the difference in the number of patent filings between these companies. With Microsoft, they do a bit of everything, so I can understand the number of patents, but Google is also involved in multiple markets. So why are these numbers so drastically different?
In the U.S., I think Apple and Google would be lauded as innovative, while Microsoft as stagnant. So to play devil’s advocate, could the number of patents filed and awarded actually be a symptom for lack of focus? I think some of Microsoft’s moves over the past years could make you wonder. I don’t have a strong opinion either way, just food for thought.
What are Apple’s main short-term risks? (slide 43): As I write this, Apple currently has a press conference scheduled where some are debating whether Apple would announce a recall on the iPhone 4 due to its antenna issues. This report could almost be prophetic.
On the last page I noted, don’t miss the the comment about Steve Jobs insistence that an early desktop Apple product not have any fans. As a “product guy”, it’s nice to know that even the most famous have their little embarrassing mistakes they’d like to take back. It’s a good reminder that Apple is still a speed-bump or two away from losing all they’ve gained, although they have been doing more right than wrong over the past few years.

If I had a Hammer…

Google is quickly catching up to Apple’s iOS in terms of professional developer mindshare, so with the introduction of the App Inventor for Android they may have opened up the market to the hobbyist-developer.  It’ll be interesting to see if this tool has the support and flexibility to make this a success, while keeping bloated apps and potential security issues down to a minimum. Regardless, it has to be more capable than the RSS-to-App alternatives.

Good job Google! Here’s hoping for a few heart-warming, garage-entrepreneur stories coming from this announcement…

We Love to Talk

There’s more to be done with voice.

That was said by Nokia’s former CEO, Jorma Ollila. In 2006.

Apple and HTC+Android are getting steady reminders lately about why they are still called phones, and an even bigger reminder that Americans still love to talk more than anything.

But seriously, did anyone else scratch their heads when Jobs explained the new iPhone antenna? While not an antenna engineer, I still know enough of this black magic to wonder, “What happens when you touch the metal?” Sadly, it appears as though I might have a future in the dark arts. Considering the amount of testing that ATT requires, this must have been a known issue prior to market launch. So what happened?  Was this design taking priority over performance at Apple? Was ATT seeing market pressure from Verizon-Android offerings that pushed them to rush this through? Did Apple just succumb to hitting a date expected by the market?

I’m curious. If anyone has some insider info here, please let me know…

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