Archive for January, 2012

Forget coming, the Chinese are already here

January 25th, 2012 No comments

I haven’t been back to Photonics West, the premier conference and trade show for the photonics industry, in years. I’ve missed it! But being away gave me a chance to notice something that, while obvious, might have slipped by the regular visitors.

Years ago, many of us in the industry debated the role of the Chinese in the photonics marketplace. Low quality, many reasoned, but the rest of us recalled hearing that argument before about Japanese manufacturing, then Korean, Thai, and everyone else. We could guess that today’s low quality were gathering skills to compete directly with U.S. manufacturers.

Only five years ago many companies were already feeling pressure from Chinese manufacturers (indeed, in lower skill assemblies) but today the tradeshow floor wasn’t filled with Chinese made products from American and European designs. It was filled with Chinese people selling Chinese products. From optics to lasers, all the way to complex instruments the Chinese were no longer content to offer cheap labor to product manager’s problems, they were here today to meet with researchers directly, and see how well the fruits of their labor would solve their problems or create the next markets.

This dilemma and what exactly is behind was well documented< recently by the New York Times. While the problems and trends described in that article sound intractably difficult to solve, the photonics industry is different. Unlike Apple’s supply chain which has almost completely translated off shore, from nuts and bolts to qualified engineers, photonics still enjoys a significant infrastructure here in the United States.

The challenge that this high tech industry faces is whether our experts are willing to make the sacrifices that our Chinese colleagues often have. Are we willing to pay for opportunities with a bit more risk and yet still receive less pay off than fellow executives and entrepreneurs do? It’s well known that people value their own wealth only in comparison to their own peer group. That’s too bad, because the U.S. is a rich nation, and making the choices that Chinese companies must do every day feels much more painful to our entrepreneurs. They argue it’s not worth it to them; they’ve invested so much into their small businesses. One of my industry colleagues spoke of the kind of deals he can accept these days; he has to feed over 20 employees in his small business and he’s got to find opportunities that keep them safe, but also provide him a good return. It all made perfect sense, and he’s by no means rich, but I wonder if his Chinese competition would be willing to accept much less.

I hope he’ll reconsider. I want him to be rich: he’s had a business for more than a decade already and he’s grown slowly and steadily. He’s a critical part of the infrastructure that remains here in this very high-tech industry. If he can’t compete with the Chinese at his door, then our industry may mirror what’s already happened in the iEconomy and what could have been a beachhead to maintain our position in the world economy, will go to the far east, just like Apple’s semiconductors and the engineers who support them already have.

Building an eco-system

January 17th, 2012 No comments

I remember buying used books in the college book store. I was amazed how expensive they were, but I remembered most how heavy they were as I quickly learned not to carry them with me to classes. That’s a shame because having the book there to refer to right after a lecture might have made it easier to work out the problems assigned. We actually used books during class in elementary school; keeping these heavy things with us was a necessity. So was a sturdy backpack.

I predict Apple wants to change all that. In the process, they want to improve the way we learn and even the way books, themselves, are created. The Kindle and Nook are both excellent eBook readers. They are light and easy to read in typical light. But textbooks, especially those for earlier grades, are in color. Interacting with textbooks can make them more effective and more stimulating. Have a textbook that’s attached to the internet, so it can be updated, fact checked, compared with other sources, and shared with friends makes it even more powerful. E-readers fall short on interactivity because their beautiful screens are slow to refresh, and their unsophisticated, but perfect just for reading, software is limited. That’s what keeps them cheaper (around a fifth of the price of an iPad) but whypreferred iPadsto Kindles.

The iPad isn’t new, so why hasn’t it already become the text book replacement I suggest it should be? Apple’s been here before, but it’s all about the eco-system. As each new Android phone is released with better and better specs, even than Apple’s offering, pundits predict it will kill off the iPhone. It doesn’t happen because, like buying into a camera system, buying an iPhone is gaining access not only to a nifty phone, but also a huge app-store, and giant accessory market.

In order to bring iPads to classrooms, Apple needs an eco-system. This, I predict, is what Apple will announce Thursday, 19 January. Many are calling it GarageBand for text books. It really means that by making the tools available to develop textbooks, new, interactive textbooks that take advantage of all of the iPad’s features, Apple can crowd-source the eco-system that it needs to build out this market. This is not to say that suddenly everyone will be able to make text books that the Texas Board of Education is likely to accept, but there is still a need for iPad compatible tools that make this development much easier. Tools that expand the interactivity of the book with the rest of the world. Imagine how much better Facebook would be if kids we’re able to share references from their homework instead of just the latest “re-post this if you think….” Apple has a long history of enabling content creators, and not just content consumers. Not a bad strategy if you develop tools to both consume and create digital content. If you want to know where Apple is going in the future, expect them to look for opportunities to enable one side or the other of the content equation.

And check back in a couple of days to see if this is at the heart of Thursday’s announcement.