Good move! China!--"Technology Firms Risk Losing Advantage as China's Influence on Global Standards Reaches Critical Levels
Deloitte & Touche LLP Identifies Four Strategies to Exert Influence on Chinese
Standards and Generate Long-Term Opportunities
NEW YORK, Aug. 4 /PRNewswire/ -- China is no longer content with just
being the world's pre-eminent manufacturer: it is increasingly active in the
development of global technology standards, Deloitte & Touche LLP finds in a
study released today. The report, "Changing China," details how China's
standards initiatives will shape global competition in the technology, media
and telecommunications (TMT) sector for years to come.
China's current position as the leading consumer and producer of many
technology products -- along with its healthy long-term growth prospects -
puts it in a strong position to influence standards in its own market, as well
as the global markets. As China's standards become more widely accepted,
Chinese firms will increasingly direct the global technology sector.
"Technology vendors that misjudge the impact of China's standards
revolution could find themselves at a significant disadvantage, with their
position in the market increasingly overtaken or encroached upon," says
Clarence Kwan, National Managing Partner, Chinese Services Group for the
Technology, Media & Telecommunications practice at Deloitte & Touche. "China
is able to use the lure of its massive markets and spectacular growth as
leverage in the standards war. Global technology and telecommunications
companies need to review China's standards initiatives and collaborate, where
appropriate, with Chinese companies in standards development."
Deloitte identified four practical strategies for technology firms to
consider as China's technology standards develop:
...
Examples highlighting China's impact on standards include:
Technology:
Operating systems
* The Chinese government recently announced a major commitment to Linux
and announced it was drafting a new "standard" specifically for the
Chinese market that might be made compulsory for all IT vendors and
service providers.
* The Chinese software industry is still in its infancy and China wants to
source software or create its own software that is affordable to the
masses.
RFID
* China established a working group to draft and develop national
standards for RFID tag technology. Some reports indicate the group is
adhering to international standards, while others suggest the group is
planning to go its own way. An incompatible RFID standard could pit the
interests of China's emerging IT industries against the interests of
major purchasers of Chinese products.
Media:
EVD
* Chinese companies are trying to promote a successor to the DVD optical
disk standard, called Enhanced Versatile Disc (EVD), which has better
sound and picture quality than DVD.
* Chinese companies are constrained by hefty DVD royalties, which range
from $15 to $22 on players that today often retail for less than $60. A
consortium of China's leading makers of DVD players holds the EVD
patents and collects royalties.
Audio video coding
* China is developing its own standard technology for compressing audio
and video. The new standard, calls AVS, is competing with MPEG-4 and
H.264 to replace the current worldwide compression standard, MPEG-2.
* EVD is currently based on MPEG-2, but a switch to AVS is expected -
allowing Chinese manufacturers to produce state-of-the-art video players
based entirely on Chinese technology standards.
Telecommunications:
Cellular networks
* China has its own globally approved standard for 3G, and as the world's
largest market for mobile communications, is well positioned to take a
lead role in defining the 4G standard.
Satellite positioning systems
* China has recently chosen Europe's Galileo system over the U.S.
military's Global Positioning System. The push into satellite
positioning systems has significant commercial and geopolitical
ramifications.
..."
SOURCE Deloitte & Touche LLP
Web Site: deloitte.com
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