Technology in China, and Great Sex
December 28th, 2007
A number of firms enter the Chinese market primarily because it’s a wide open place to test, gather feedback and refine their technology. Case in point — people in the PRC change cell phones much more often than is the case here in the US; yet, many Chinese may make less money. Why is that? Is this openness and fixation with new technology and gadgets cultural? Historical? Economically driven? Other? Whatever the reason, it makes China a haven for testing new cell phone ideas, styles, brands and technologies.
Here are two good pieces that touch on the topic of technology adaptation in China:
Wall Street Journal, Motorola Dials In To China’s Under-30 Set.
China Business Network Podcast, Interview with Cat Rust, Founder and Director of Catalist Group.
Self-explanatory pieces. Good stuff.
Oh, and the “great sex” part of the title of this post? I just put that in there after reading a recent article that suggests that the word “sex” pulls in more readers to a blog post than other monikers. If that was the reason you read this post … gotcha.
Entry Filed under: Pre-Departure, Beijing, China
8 Comments Add your own
1. Lonnie | December 28th, 2007 at 11:23 pm
Great articles…
Wished I smoked because they were as good for me as they were for you….
2. Rob Belloni | January 4th, 2008 at 4:08 pm
My first year at Poly as an undergrad was the first year they had high-speed internet in the dorms. There were 12 guys on my floor. Six of them became addicted to the internet, whether it was IRC chat or online gaming.
When I say addicted - I mean staying up until 6am in the morning drinking cases of Pepsi, not going to class, and in one guys’ case - meeting a girl online, moving to Canada and marrying her a week later. Three of them failed out of school after two quarters.
I’d venture a guess that those six guys hadn’t had much exposure to the internet before they moved in to the dorms. I know that myself and one other guy had already used it. Neither of us became attached to it beyond normal use.
In my view, what happened in that dorm is a microcosm of what is happening now in China. You take millions of people who have never been exposed to new technology, immerse them in it, and the result is that they in turn immerse themselves in it.
For some the outcome is good, but for others they go overboard. More people are likely to go overboard when they have little exposure to the new technology. You could watch “The Gods Must be Crazy” for a more absurd example.
I’m not passing judgment here, because I think all human beings are all susceptible to this kind of thing. I’m sure if someone handed me an amazing communication device or put me in front of some 2050 internet technology - I might become engrossed in it.
One statistic I question in the first article was, “Compared with America’s youth, members of China’s under-25 set have higher rates of at-home broadband Internet access, ownership of computer phones and digital and video cameras.” When they say rate, I can only assume they mean percentage usage rates. I find this impossible to believe, and question how you could gather such statistical data through all of China with any accuracy or statistical significance (t statistic with a 95% confidence interval anyone?) What is your take on that factoid Dr. Carr?
I also found the videos humorous - for example when they visit the city that only makes toilets. And later when the kitchen guy from England is negotiating with the Chinese, and the Chinese guy has a Budweiser on his desk. Different… definitely different. I can’t wait to see for myself.
3. Jesse Bilsten | January 4th, 2008 at 5:33 pm
Well I have to say, “You got me.”
In relation to the article however I think both yours and Robs sentiment’s are spot on. The Chinese are addicted to technology.
But my response is to question if that’s really a bad thing. Their addiction has provided them with a better internet infrastructure than we have and we’re driven by capitalism. Instead we have corruption and a stagnant internet structure to show for it. Our telco’s are also lobbying for complete control over the bandwidth provided to both corporations as well as end-users again restricting our speed and usage by the all mighty dollar. We only have 2-3 politicians even fighting for net neutrality as every other one is bought and paid for by the telco’s or some big business who has vestments in restricting internet usage.
Cell phones play off this same theme. The Chinese have all the best cell phones (of which if you know the right websites and are on a GSM network you can import to here). We’re about 2-3 years behind in cell phone technology and instead of saying it’s due to their culture I’d say instead it’s more likely due to corporate America. The economics of a cell phone contract are so complex and maxed out here in the U.S. that buying a cell phone has always been a part of picking your provider rather than a separate consumer choice. Something China has over our cell phone market here in the U.S.
I’m not saying culture doesn’t have anything to do with the two business models, but I think it’s not the main proponent to the two markets, rather the corporations are in combination with the providers. Verizon, AT&T and BellSouth etc. all have vice grips on the market and restrict it’s usage to the end user and in turn restricting the types of cell phones we can use.
They also claim to have rigorous testing that a cell phone must endure before being offered to a consumer. For instance most phones take 2-3 years after being released to the general public to show up on Verizon’s network due to the CDMA technology requirement as well as their strict QA process.
Could be good for the customer or bad. Depends on what kind of customer they are and comes back to the initial proposition of it being a cultural reason.
This is where our corporations made their decision and I think they misread the american consumer. Instead of american’s buying cell phones based on the provider or judging the provider based on the cell phone they bought, we just want the ability to pick any cell phone and we blame the company who made the cell phone if it’s a poor device, and not the provider.
Verizon has announced that they will be opening their network to all GSM phones in the next year or so. A move that confirms that they have seen that they made a mistake and are starting to let consumers pick their phones. This is also represented by the recent iPhone hacking fad. AT&T and Apple are having a very hard time restricting the iPhone to just the AT&T network as users are finding ways to use the phone on any GSM network. Just like the Chinese.
I think the networks in China realized there was no way they could restrict phones to a specific network, especially with how prevalent hacking and piracy is in China so they opted to let the consumer pick their phones and lose that extra money but not deal with the hassle of battling the hackers.
4. Chris Carr | January 5th, 2008 at 8:32 am
Rob and Jesse raise excellent points.
Rob, I think you are right that it’s unlikely that the under-25 set have higher rates of at-home broadband Internet access than the US, unless their survey was only of eastern seaboard cities in which case then it might be valid. Outside of these cities, though, I would be very surprised if that were the case.
In China (and Japan), my read is that most people access the Internet though their computer-mobile phone and not a laptop or their bulky computer at home, so it would not surprise me if that data point in the article is accurate.
Other:
China Mobile, controlled by the government, holds an almost total monopoly in China re: cell phone service. It has 500 MILLION plus customers (can you imagine that?!). The down side of this from a control and monitoring standpoint, is obvious.
Also, cell phones, and using them are very cheap in China, and text messaging in particular is free, if not so cheap it’s almost free. Most people seem to text each other, rather than burn minutes with a personal chat.
5. Rob Belloni | January 7th, 2008 at 2:49 pm
Well, if I can’t get the latest phones today, at least I can get cheap accessories from China via Hong Kong. I learned this last week while shopping for a car charger for my new cell phone. Verizon wanted $29.99 per charger and I was not interested in paying $60 for the two chargers I needed.
A quick trip to eBay located chargers for $3.97 each. I ordered two, and was out the door for $11.97 including shipping. The package I received in the mail had a return address in Hong Kong, but for that cheap I wouldn’t have returned them even if they were no good. The chargers work just fine.
If Verizon opens up their network to all phones, I don’t see how they will stop the flow of product direct from China or Hong Kong. Then we can stop feeling sad that we don’t have the latest and greatest.
6. Simeon Trieu | January 9th, 2008 at 8:03 am
HK is tax-free for many products. Nice! I got an international power plug adapter (just the plug with no voltage/frequency shifting) from HK.
Rob, one thing about international products, especially complicated electronics like smartphones, is that the product will be in the country of origin’s language. Also, power requirements and plug requirements will be an annoyance to many. The US uses 120V @ 60Hz along with a US standard 2 or 3 prong plug, while China uses 220V @ 50Hz along with a Chinese standard 2 or 3 prong plug (the diagonal shaped one). But if we can get over that, then cheap electronics will surely be coming my way. :>
7. Gary Chou | January 23rd, 2008 at 2:30 am
Hi Rob,
Thanks for providing me with a new angle to look at this phenomenon, and after some thoughts, I think you really hit on some spots there.
I can’t call myself a hard core gamer, but I did play some computer games (online). What I had noticed was the widespread popularity (and addiction) on a massive scale. This is also not exclusive to China.
Yes, the escapism factor from a generally closed society probably played a part, but I have to extend your argument to Eastern Asian people. I argue that, in comparison to Americans, Eastern Asian children and young adults are more oppressed than their Western counterparts.
When I use the word “oppress” I am using it in a very general sense. Not political or social, but a general state of mind. We carry a higher level of burden, expectation, in the forms of duties, shame/face and the norm, originated from a shame based value system (oppose to Western guilt-based Christian value).
Generally speaking, I believe two forces are in play here:
1. The lack of recreational outlets (alternative choices of entertainment) as a result of
a. lack of physical space
b. lack of natural resource
c. pollution
2. The obedience to trend.
Speaking of trend, one can’t understand the magnitude of “trend following” by Eastern Asian unless one has witnesses with one’s own eyes.
In America, 12 hours waiting for a thanksgiving night release is commonplace while a seven days vigil awaiting Wii restocking is heard of.
But let me share with you some examples of the feverant cultish yet short-lasting following by East Asian people.
-Every one in the country fall into month long craving over egg tarts, then Donuts, Hello Kitty Toy from McDonald Happy Meal, then milk flavor ramen, then lottery ticket, etc. People would wait hours, and when I say people I mean all people, and for many month, to buy whatever it is popular at that time. I am talking about white collar workers skip work, use lunch break, or bosses ask chauffeurs, maids, to stand in lines as long as eight hour, just to buy that egg tart or donut.
-Kids spend days (100 hours straight) in internet cafe (which is really smoke filled game room) until cardiac arresting due to fatigue (that they weren’t even aware of). And this happens multiple times.
-Professional cheap labors gamers in China whose jobs are solely to “level up” for American who don’t have time to play their multiplayer game (such as WoW 3 or Everquest).
No better example is my own brother, every time when I ask him to do something else other than playing online game, I realize there really isn’t much for him to do. Not only all his friends, and almost every one (even girl, yes) in his school play those games, there aren’t really that many alternatives. What kids do in East Asia are quite similar to their peers, because East Asian culture encourage assimilation, group unity and “sacrifice for the community that you belong to.” Therefore creativity or out-of-box thinking has little place to shine. As a result of that, kids tend to do what others do, and because of the lack of natural and infrastructure resources, they resorted to KTVs, Bowling alleys, Internet cafe, movie theatres, etc.
In summary, I think the lack of resource/space and the force of assimilation really contribute to the escapist mentality toward the virtual world for East Asian kids. It’s there they find creativity, identity, and recognition.
This reminds me of those West-East comparison slides Dr. Carr showed us in the Business Law class of Dr. Anderson. Dr. Carr showed us a slide of how Western leash dogs as pets, while Eastern “hold the hand of a kid” on the street. While the comparison suggesting the equivalency of pet-kid might seem offensive for a Westerner, as an Easterner I actually understand it and not feel offended at all.
I really agree that when grandmothers take her grandson/daughters to the street, she has a very similar motives/mentality as a Western middle age man taking his dog for a walk. A Chinese saying goes by “Breed a child to prevent aging” basically implies a subtle utilitarian view of children, and these all feel familiar to me.
Sleepy.
8. Nick Chamness | February 13th, 2009 at 4:54 pm
As with everything else, it appears China has the most of something again. Its quite amazing that the number of people with high speed internet is higher in China than it is in the U.S. Talk about amazing infrastructure implementation.
With such a large percentage of the under 30 population on the internet, Motorola along with many other companies stand to make massive profits. Smart advertising will be the key to tapping into these savvy consumers. Cell phones have become such a status symbol here, I would not be surprised if the Chinese take a similar liking to them.
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