The Rise of Chi-T: Chinese IT and the Developing World
Many people already know China represents the largest Internet and mobile user base in the world: CNNIC put usage at just under 340 million midyear last year. Likewise, Chinese mobile penetration is at 54% and climbing. Both trends have fueled a voracious appetite for access devices—PCs, mobile handsets, laptops and now new lighter classes of devices, such has netbooks and early forms of MID/media players. Western device makers have historically been a major beneficiary of this growth, though homegrown OEMs such as Lenovo and Haier have become global names in the electronics business over the past decade. Meanwhile, China's low-cost labor and a growing base of bright engineers and designers have fueled the country's attractiveness as a manufacturing center for the world's gadget fetishes.
This is changing, and Chinese IT is poised to make the leap into a strong position of influence in the next decade, driven by several important factors: the aforementioned growing demand base at home and acquired expertise among its dozens of major contract manufacturers, and a desire to exercise its know-how on the global stage.
While the West remains focused on its own known brands—Intel, Nokia, Microsoft, Sony, LG, Samsung to name a few, Chinese contract manufacturers such as PC makers Founder, Tongfang and Great Wall are producing own-brand product for the domestic Chinese market, including the latest 3G netbooks, e-readers and other portable devices to meet the growing demand. And some are poised to follow other Chinese IT leaders like Lenovo, Haier, Huawei and ZTE into international waters with a wave of new, cheaper devices.
The great leap doesn't stop at hardware, but reaches into operating systems and processors to run these devices. A few weeks ago Wired covered the emergence of what it called the People's Processor, a government funded push to develop an alternative, "open" processor called the Longsoon chip, which has already found its way into a number of Chinese notebooks in recent years, and forms the cornerstone of a push toward domestically created open computing that frees Chinese developers and consumers from having to rely on high-price Western software, namely Microsoft Windows and other software dependent on x86 architecture.
The implications of this rise of "Chi-T," or IT formulated and brewed in mainland China, are potentially far reaching. Like Brazil's push into open source in the last decade (also partially a move to enable the people to attain technology with fewer licenses, and costs, attached), China's drive to create a multipolar IT world won't s top at its own borders. As it has done with automotive, energy, and other important sectors, China is looking to fill the gaps left by Western companies in the developing world, and sees an opportunity to be the provider of IT to these areas. The head of the Longsoon project himself recognizes this potential:
“Compared to Intel and IBM, we are still in the cradle,” concedes Weiwu Hu, chief architect of the Loongson. But he also notes that China’s enormous domestic demand isn’t the only potential market for his CPU. “I think many other poor countries, such as those in Africa, need low-cost solutions,” he says. Cheap Chinese processors could corner emerging markets in the developing world (and be a perk for the nation’s allies and trade partners).
This parallel IT world will be much more driven in its definition not by Western-style early adopters, but by the wants, needs and behaviors of a much greater proportion of what we might refer to as traditional late adopters—rural, less educated, lower income users, with functionality, applications and design dictated more strongly by these groups from the beginning. China-grown technology will be a central part of the fabric of the BoPNet, just as Chinese and Indian vehicles make up more and more of the wheels on the road in the BoP.
And, as open source technology gains further in the West with the rapid rise of new operating systems and new classes of devices that platforms like Windows can't evolve fast enough to keep up with, not just components but processors, software and applications of Chinese origin (and Brazilian and Indian) will become more prominent as companies seek to innovate freely, quickly and flexibly in the West, and take advantage of all of the building blocks that are available globally, not just from Redmond, Mountain View, Seoul or Espoo.