Did get Oracle the Tiktok deal because it cozied up to the US president more than any of the other US companies, wonders international trade expert Harry Broadman at CNBC. Many questions remain after Microsoft was replaced by Oracle.
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Coinspeaker:
ByteDance will be the overall decision-maker on who to sell its product to. Preferably, one that will offer the best cash deal, which both Oracle and Microsoft are capable of anyway, or one that will not pose a direct competition threat in future for its venture, where Oracle highly wins.
“The perfect company for Bytedance to sell to is one with deep enough pockets to pay a good price,” said Matthew Brennan, a social media analyst in Beijing.
Brennan added that the buyer should be “good enough at tech to actually run all the advanced AI (artificial intelligence that TikTok has)” but weak enough at consumer mobile that they would avoid arming a future competitor. “By these measures, Oracle sounds like a good fit,” said Brennan.
Oracle is actively providing the CIA with its database software solution, and the acquisition of China’s huge tech company might be a gateway to spying the Chinese market.
In addition, Oracle’s acquisition of TikTok will be a plus for the struggling company to venture into new markets and presumably the social media industry.
Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers' request form.
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Arnold Ma is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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| William Bao Bean |
Startups and investors in China are more sympathetic toward ByteDance. Many agree that if the Microsoft deal goes through, it could be the least bad outcome for TikTok.
“They are stuck between a rock and a hard place,” said William Bao Bean, general partner at Chinaccelerator, a cross-border accelerator backed by SOSV. “We are in a fast-changing regulatory environment. I think the consumers would probably want to continue using the service, and this is one potential way to make that happen. Obviously, I don’t think it’s what ByteDance really wants.”...
The tech community is well aware that TikTok is a rarity. Although the backlash will have a chilling effect on Chinese companies expanding to the US, and potentially other Western markets, there simply aren’t many internet companies going from China to the West in the first place.
“Most solutions that are built for China don’t solve problems that people have in the West,” observed Bao Bean.More at Techcrunch.
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| William Bao Bean |
Chinaccelerator MD William Bao Bean explains why he took a chance on the Indian entrepreneur.
“Every virtual fitting room I’ve ever seen makes the consumer look bad. Amazon and Microsoft make the person look like a plastic dummy. The consumer is not going to buy something if she looks bad in it," he says.
He says TryNDBuy’s computer vision solution does a better job of making a 3D virtual avatar that won’t make a consumer cringe while getting a sense of how she will look in a dress. Chinaccelerator is helping the startup with the tough act of business development outside India.
“It’s a B2B (business-to-business) sale, step by step. There’s interest from brands in China and then we just have to navigate Alibaba, which is never an easy thing," he says.
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| Shaun Rein |
Apple is a good example. In 2009, the company made just 2 percent of its revenue from China. Today, a quarter of the company's global revenue — more than $46 billion — comes from its business in China. That’s why Apple's Tim Cook will be among a group of CEOs who will meet president Xi Jinping in Seattle.
But there will be a lot of forced smiles around the table. "It puts a lot of American CEOs in a difficult position because they’re almost like supplicants," says Shaun Rein, author of The End of Cheap China. "They’re all flying to Seattle to meet with president Xi as if he’s an emperor, and it’s clear that he’s going to dictate to them what opportunities exist for them in China."
Rein says the business environment for U.S. tech companies in China is the worst he’s seen in 20 years, and the Obama administration has done little to improve the situation. But that may change later this week, when the presidents of the world’s two largest economies meet face-to-face.More in Market Place.
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| +Mark Schaub |
China has effectively blocked gaming consoles since 2000. To put this in perspective the PlayStation 2 was released way back in 2000. In 2000 China banned the manufacture and sale of gaming consoles due to the possible adverse effects of violence and explicit content upon China’s youth.
However, this fourteen year blanket ban is seeing a slight unraveling as the new FTZ will, uniquely for China, allow console manufacturers to produce games and consoles for China’s domestic consumption. Naturally enough, the game manufacturers have not been given a green light to produce anything they want as they will still have to submit products to regulators for approval. Accordingly, do not expect to see a Chinese version of Battlefield 4 coming out of Waigaoqiao but non-controversial games will be able to be sold directly to the China market from the FTZ.
Further, the new regulations will allow for manufacturers in the FTZ to sell gaming consoles to Chinese consumers. Ironically, although gaming consoles have been produced in China for export for years, sales to the domestic market were banned. Microsoft entered into a $237 million joint venture with BesTV New Media in the FTZ at the end of 2013 to make home entertainment equipment, which could potentially include games and consoles.
The FTZ lifting of the blanket ban will lead many optimists to posit a huge untapped market that gaming console operators like Microsoft and Sony will need to immediately enter. Revenue in the PRC gaming industry grew by 38 per cent year-on-year in 2013 to RMB 83.2 billion. However, this market has been dominated by online computer and smartphone games, with PC games claiming two-thirds of the market in 2013. Due to the ban, gaming consoles have not only been driven to the sidelines but are also comparatively expensive in China...
The different threads of new FTZ policies come together to potentially allow for great opportunities to gaming companies.
On the one hand the obvious opening is the ability for game console and game manufacturers established in the FTZ to sell their products into China. More subtly the liberalizing of restrictions in the VATS sector may provide far greater opportunity for video game distributors to access the China market. China often embraces new technologies quicker than the West and by putting games on the cloud, the game distributors will be able to better meet consumer demands and taste while also confronting the serious piracy problem as games are stored on the cloud rather than individual devices.
Is this all too good to be true? Time will tell but at present it does seem that the video game sector may well have more to be happy about than many other, more heralded sectors.You can read the full paper here.
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| Shaun Rein |
The labor shortage isn’t limited to factory workers. Workers for desk jobs are also in short supply. “There just aren’t enough people,” says Shaun Rein, managing director of Shanghai-based market research firm CMR China and author of the new book The End of Cheap China. Rein points to announced plans by Citigroup,Microsoft, Google, and others to boost their number of workers in China. “That’s creating a huge fight for white-collar workers,” he says. “Salaries are soaring.”More in Business Week.
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| Tricia Wang |
I have several thoughts about Elop's comment:
It would've been more accurate for Elop to say, "previously, 90 percent of the world could not afford a smartphone or a high-end device, but we are going to see affordable smarpthones enter the market and users who will spend more on mobiles...This creates an opportunity."
- There are already companies that are ready to offer the 90% a very affordable smartphone.
- It is misleading to think that this 90% won't spend more on cellphones than they did on feature phones.
- Ahtough this 90% can't afford a smartphone now, it doesn't mean that they don't want one in the near future.
But I suspect that the reason why Nokia's CEO made his statement is because the market has yet to see the flooding of affordable smartphones. This is because Mediatek, the platform on shanzai phones, up until recently has only been able to offer 2G chips, not 3G chips. But Mediatek is beginning to produce Android smartphones with their 3G MTK6516 cellphone chips, the first affordable shanzai smartphone. And now that Mediatek has sorted out legal issues with Qualcomm in a across-patent liscensing deal, they are moving upmarket and ensuring that their 2G customers transition to their 3G handsets.
So this means guerilla warfare on the smartphone market: Chinese cellphone makers will soon be producing smartphonesthat are much less expensive than the current array of smartphones ( i.e. iphones, HTCs, samsungs, and ericssons).Can Nokia and Microsoft together work out a strategy to fight this new development? Tricia Wang:
In my research with non-elite users around the world, Nokia has always been at the heart of every conversation about cellphones. But I've noticed the decreasing ownership and desire of Nokia phones in the last 3-4 years, and it is even more apparent over the last year. The 3G market among non-elite users is already being created by current advertisement for high-end smartphones from iphone to HTC to Motorola. Cellphone vendors are selling 3G phones even in second hand cellphone markets. So even if non-elite users can't afford these phones, their desires for one are being nutured.High-end smartphones are paving the way for shanzai smartphones.More on Tricia Wang's weblog.
