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Archive for May, 2005
For anyone who is interested, the Financial Times Asia Insight series of reports identifying and analysing the forces and trends behind the region’s dynamic growth.
As Paul Otellini prepares to take charge at Intel next week, is the giant chipmaker heading in the right direction?
Many conglomerates like IBM, Cisco, Dell, P&G, GM, etc. are having all something in common. They all face new challenges due changing market conditions (in microeconomic terms, the aggregation of formerly distinct markets, enhanced market clearing and efficiency), changing world economy, competition from emerging markets, changing technology landscape.
Furthermore, the forces of globalisation, technology, and economic liberalisation are combining to make life harder than ever for established companies. Incumbents must understand how powerful forces are aggregating once-distinct product and geographic markets, enhancing market-clearing efficiency, and increasing specialisation in the supply chain. They should respond by adopting a new approach to strategy– one that combines speed, openness, flexibility, and forward-focused thinking. Mature companies must learn to be young at heart. Boundless new opportunities await executives who recognise that the days of slow change are over.
Next week at May 18th, Paul Otellini will take over the wheel from retiring chief executive, Craig Barrett. For several years Otellini was the right-hand man of Barrett. But Otellini is Intel’s right-hand man in another sense, too. For he is the architect of the firm’s new strategy — change of direction that Otellini calls a “right-hand turn”. The world’s largest chipmaker now faces three big challenges — but Otellini believes his plan can address all of them at once. Is he right?
The Economist has summed up the three challenges which are facing for Intel’s new boss, Paul Otellini.
- Intel, along with its rivals, is embracing a new approach to chip design, in which performance is improved not through higher clock speeds, but by adding further processing “cores” to its existing chips.
- The second challenge is that the personal computer (PC) market has matured. Intel still makes most of its money selling the processor chips at the heart of PCs. Mr Otellini cannot, and must find new sources of growth, in the PC market and beyond it.
- The third challenge is the growing competitiveness of Intel’s main rival, Advanced Micro Devices (AMD). In recent months Intel has suffered a string of embarrassments, some self-inflicted (such as the cancellation or delay of several new products), but others at the hands of AMD.
Will Intel keep its dominant position in the chip market? Take position in from them unfamiliar markets? Or markets which aren’t explored yet. As most of you are familiar with technology convergence it seems like that business model convergence is the new thing out there in the business world. What do you get when combining Intel’s and Dell’s product range? When taking a look in the long-term future, it seems like that many conglomerates as we know today have to team-up to adapt with foreseeing new market circumstances.
When writing about consumer power lately is it not that we, consumers, demand a “swiss pocketknife” rather than a range of scattered products isolated from each other?
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I recently started to blog about podcasting because it seems like that major media companies are picking up on this trend. Is it because of the pope’s new hobby? 
Anyway, after Business Week, the NY Times has published an article on podcasting! Love to hear your opinion on this piece!
Bruce Einhorn has a fascinating article on Taiwan in Business Week. Taiwanese companies, he reports, now control 72% of the world’s production of portable computers, 68% of LCD displays, 70% of microchips, and 79% of PDAs - as well as a third of the markets for manufacturing servers and digital cameras. With the most sought-after engineers of tech products, the island is becoming the brains of the world’s IT industry.
An interesting and considerable part in this piece is:
Real reconciliation thus seems a long way off. Yet any serious attempt to lower the tension would hold huge promise for the executives who run America’s IT industry, which depends on Taiwan for so much of its goods. A shooting war between Taiwan and China would be catastrophic in human terms. And for the Western companies that have built their fortunes around Taiwan, the damage would be a direct hit to the global economy and the Digital Age. “It would be the equivalent of a nuclear bomb going off,” says a top executive at a U.S. high-tech giant. Couldn’t U.S. industry develop sources of IT supply that don’t involve the Taiwanese? “That’s like asking, ‘What’s the second source for Mideast oil?’ says this exec.”
My favorite line in the piece comes from Intel’s John Antone he compares Taiwan to long-distance runners who are being challenged but who are still in the lead. “As long as they’re committed to run very aggressively,” he says, “I don’t see anyone catching them.” Competitors be warned: Taiwan will do everything it can to stay in the race.”
Sphere: Related ContentHello there!~^^ Always wanted to know more about Wiki and Pocasting here you can find some valuable information.
Questions still remain!
- Will Wikis spread really into corporations?
- Will RSS replace the way we read news and Podcasting how we consume information?
Within 20 years — possibly far sooner — China will have the world’s largest economy. That will powerfully impact you: your job, your company, your economic future, and your country. In the book: The Chinese Century, Oded Shenkar shows how China is restoring its imperial glory by infusing modern technology and market economics into a non-democratic system controlled by the Communist party and bureaucracy.
Shenkar shows why China’s accelerating growth differs radically from predecessors such as Japan, India, and Mexico — and how it will lead to a radical restructuring of the global business system. Discover why the U.S. is most vulnerable to China’s ascent… how China’s disregard for intellectual property creates sustainable competitive advantage… and how China’s growth impacts every global business and consumer.
Above all, Shenkar shows what you must do to survive and prosper in “the Chinese Century.”
Sphere: Related ContentPublished by Business Week, the ranking of world’s top 100 IT companies. By clicking on this link you can download the complete coverage in PDF format.
The city at the heart of India’s booming information-technology industry is already choking on its own success; but the boom has barely begun. Moreover, Bangalore may be on the verge of overtaking Silicon Valley as the biggest IT employment region in the world on the back of the rise in offshore outsourcing, according to some estimates.
The high-tech Indian city, which is home to major Indian IT outsourcers, including Infosys, Tata Consultancy Services and Wipro Technologies, as well as many Western IT companies, now employs 160,000 people in the technology sector. IT accounts for 100,000 of these jobs, with the rest in business process outsourcing and call centers.
MK Shankaralinge Gowda, secretary of IT and biotechnology for the state government of Karnataka, said that the number of tech workers in the region will exceed 200,000 between 2004 and 2005, as IT and business process outsourcing companies continue to rapidly hire workers.
Gowda claims that Bangalore has already overtaken Silicon Valley, but the latest figures from California’s state government Employment Development Department (EDD) estimate the number of technology workers in Santa Clara County, which is the heart of Silicon Valley, at 175,100 as of June.
However, Silicon Valley is not in danger of losing its stature as a tech leader, and it can benefit from competition overseas, said Sam Haddad, chairman of the Silicon Valley Engineering Hall of Fame and a consulting professor at Stanford University. Haddad said the region is seeing new growth in areas such as nanotechnology. “Silicon Valley is already beginning to reinvent itself,” Haddad said. “I am very optimistic.”
More insight can be found on this webpage.
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Chinese computer maker Lenovo has completed its $1.75 billion purchase of IBM’s personal computer division, creating the world’s third-largest PC maker, the company said Sunday. The deal — one of the biggest foreign acquisitions ever by a Chinese company — is expected to quadruple sales of Lenovo Group Ltd., already Asia’s biggest computer maker, the company said earlier. Complete coverage of this story can be found here and here.
Lenovo was founded in 1984 by academics at the government-backed Chinese Academy of Sciences and first worked out of a small cottage. First set up to distribute equipment made by IBM and other companies, by 1990 it was selling PCs under its own brand name.
IBM now focuses on consulting and software, outsourcing much of its manufacturing. The sale to Lenovo is expected to cut production costs and breathe new life into the PC business, which now accounts for a small portion of IBM’s total sales and profits.
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