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Wage Inflation Drives Foxconn Out of China

Wage Inflation Drives Foxconn Out of ChinaFoxconn, the largest exporter out of China and a major assembler of Apple (AAPL) products like the iPhone and the iPad wants to set up shop in BrazilReuters reports the company is considering a $12 billion investment in Brazil manufacturing.

The company, the quintessential Chinese manufacturer, is known for its brutal conditions and plant suicides according to Business Insider. Foxconn finds itself at the vanguard of Chinese labor problems, notably inflation and shortages.

Inflation is driving Foxconn out of China

Apple Computers logoThe inflation is driving Foxconn out of China. Reuters says that the Brazilian government and Foxconn are now negotiating a range of details, including facilities location, financing, taxes, broadband infrastructure, and logistics. “We’ve been talking to them for three months,” said Aloizio Mercadante, Brazil’s science and technology minister.

Mr. Mercadente also told reporters Foxconn is planning to begin assembling Apple’s iPad tablet PC at its plants in the South American country by the end of November. “The negotiations are far from complete but I’m confident,” said Mr. Mercadente.

Calls to Foxconn’s spokesperson went unanswered. Apple declined to comment.

Wage inflation in China has raised questions over the country’s future as the preferred outsourcing destination for multinationals in search of cheap labor. Financier George Soros recently told the SFGate that Chinese wage inflation is “Somewhat out of control.” And the Financial Times cites a recent US Bureau of Labor Statistics report which shows that between 2002 and 2008, real hourly wages in China’s manufacturing sector doubled, while they rose by barely 20 percent in the U.S..

Wage inceases in China outpace US wages

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The race to the bottom continues, apparently, Apple believes that $0.80/hour is too expensive for Chinese workers to build iPads. Who is going to buy a shiny new iPad when nobody can afford to buy them because we are all working a McDonald’s?

What do you think?

Could you afford an iPad3 at $0.80/hour?

Will America ever make anything again?

Related articles
  • Foxconn in Talks on $12 Billion Brazil Expansion, Rousseff Says (businessweek.com)

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

IDC Predicts MSFT Smartphone Comeback

IDC Predicts MSFT Smartphone ComebackThe prognosticators at research firm International Data Corporation (IDC) have looked into their crystal ball and predicted that by 2015 Microsoft (MSFT) will take second place to Google’s (GOOG) Android in the smartphone market. IDC claims that in 2015, Windows 7 will pass Apple (AAPL) iOS as the alternative operating system to Android. Android will have about half the market and what is left will be divided between Research In Motion’s (RIMM) Blackberry and Apple.

TechEye points out in their indubitable way:

For that to happen, Apple followers will have to suddenly have a realisation that Jobs’ Mob’s walled garden of delights is not all it’s cracked up to be and would have to defect to the arch-enema of the Apple cargo cult – Steve Ballmer.

Symbian market will blindly follow Nokia to MSFTThe latest stats show how far Ballmer’s Boys have to go to meet IDG’s projections. MSFT has 5.5 percent of the market, apparently, IDG believes that all the Symbian market will blindly follow Nokia to MSFT because the firms made a billion-dollar deal. Sometimes it is also about functionality, copy and paste, multi-touch.

IDC Smartphone Market Share Predictions

20112015
Android 39.5 %Android 45.4 %
Symbian 20.9 %Windows 7 / Windows Mobile 20.9 %
iPhone 15.7 %iPhone 15.3 %
Research In Motion Ltd. BlackBerry 14.9 %Research In Motion Ltd. BlackBerry 13.7 %
Windows 7 / Windows Mobile 5.5 %Others 4.6 %
Others 3.5%Symbian 0.2 %

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Well good for IDG, TechEye says they failed to see the rise of the iPhone or Android in 2006. History says that a full-frontal assault on a firm’s core business is not effective. MSFT has to create a market to make iPhone and Android irrelevant. I think the MSFT for MSFT sake opportunity is long gone.

What do you think?

Is IDG dreaming?

Can Windows Phone 7 reach second place on the market by 2015?

Related article

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Car Tech

Car TechThe self-interests of the auto industry and the electronics industry have aligned. The car has become the ultimate mobile computing platform. The carmakers and OEMs have begun competing to add better Internet-computing applications. These are some of the most interesting to me.

Ford Seeks to Make Cars That Talk to Each Other

Ford logoXconomy Detroit reports that Ford Motor Company (F) based in Dearborn, MI is designing vehicle-to-vehicle communication systems designed to prevent accidents. Ford’s “intelligent” vehicles can wirelessly transmit data between each other, such as location, speed, proximity, and brake status. Guided by sensors and cameras, the system can alert drivers to nearby accidents, or signal if they risk colliding with another vehicle at an intersection. “It’s like having a 360-degree pair of eyes,” says Mike Shulman, technical leader for Ford Research and Advanced Engineering.

Ford’s goal is to have intelligent cars on the road by 2016. “We kind of like to get it out as soon as we can,” Mr. Shulman says. CBS News reports that Ford’s demonstration vehicles will hit the road this spring, starting at major technology hubs across the country.

Ford’s work is part of an effort spearheaded by the U.S. Department of Transportation called IntelliDrive (Which I first wrote about in 2009). IntelliDrive’s goal is to develop a common communications platform for all vehicles to talk to each other, using 3G and 4G broadband technologies. IntelliDrive also envisions building infrastructure across the country that allows cars to “communicate” with roads, highways, and bridges, exchanging information on traffic patterns, road conditions, and weather. “IntelliDrive will help drivers bypass congestion, and it will cut crashes by providing advanced safety warnings,” according to a report by the Center for Automotive Research (CAR), a research group based in Ann Arbor, MI. “It will even be able to take over the vehicle when there is not enough time for the driver to react.”

Eventually, the technology could lead to cars that drive themselves, Mr. Shulman says. Google (GOOG) is already testing such a car.

Microsoft Wants to Be in Your Car

Microsoft logoRon Miller at Internet Evolution recently posted an article that shows how Microsoft‘s (MSFT) reputation in the auto industry has changed. Several years ago, there was a joke being emailed around about what would happen if Microsoft built cars the way it built Windows. At the 2011 CeBIT technology fair, there were examples of Microsoft in cars according to Mr. Miller.

The author points out that MSFT was showing off a Microsoft-centric, fully electric Smart Car with its control center as an app on your Windows 7 phone and not on the dash. The WP7 devices would display metrics such as the amount of power left in your battery, the expected distance you can travel for the amount of power on your battery, even the distances based on current battery life that are safe to reach, possible to reach, and questionable — all color-coded on a Bing map. Since it’s a phone the car can be monitored from anywhere there is a cell signal.

The Internet Evolution article points out a second example of bringing Microsoft to the car. At CeBIT, Ford (F) CEO Alan Mulally was touting Ford SYNC, powered by Microsoft, the communications solution now being installed in Ford cars. Mr. Mulally wants to see the Ford automobiles be the “ultimate mobile device” according to the article.

Mr. Mulally described a system based on Microsoft’s next-gen unified communications product Lync using Nuance (NUAN) voice recognition to enable users to interact with the car and the mobile telephone sitting in the car’s cradle via voice commands, letting drivers keep both hands on the wheel while accessing features. It will also eventually offer direct access to emergency services, not a call center as with GM’s (GM) OnStar service.

Mr. Mulally says Ford made a conscious decision not to embed the Microsoft Lync system with the car’s other systems. He was careful to point out that the systems that run the car are separated from Lync by a firewall. The author says that most of us who have used Microsoft software appreciate that separation continues I don’t think we are ready to go there just yet.

Automakers Want Vehicles Talk to Each Other

Talking carsThe Detroit Bureau reports that a consortium of eight manufacturers has set up shop in Farmington Hills, MI to work on car-to-car “Intelligent Vehicle” communications systems that would help stave off accidents. “If every car had it, it would be like another pair of eyes,” Ford Motor Co.’s (F) Mike Shulman, a technical research leader, stated.

The technology consortium would work to supplement, not replace, other high-tech safety systems. While Ford and others have worked on car-to-car communications systems for a number of years, the consortium reflects the fact that vehicles from different brands must be able to speak the same digital language. “We need to get messages from Hondas, Hyundais, Kias and send them all messages,” said Mr. Shulman.

Each of the eight makers will build eight new vehicles each equipped with the latest technology. Another 2,000 vehicles on the road will be retrofitted with the gear as part of a test program partly funded by the U.S. Department of Transportation.

Transportation experts suggest Intelligent Vehicle systems could also move cars closer to an era of autonomous driving, where motorists would simply plug in a destination and settle back and text or make calls or reading the paper, on put on makeup since the vehicle itself would handle the driving duties.

Autonomous Road Trains

Road trainTraffic Technology Today, reported in January 2011 that the EU-financed SARTRE project has carried out the first successful demonstration of its vehicle platooning technology at the Volvo Proving Ground in Sweden. Vehicle platooning is a convoy of vehicles, where a driver in a lead vehicle drives a line of other vehicles.

SARTRE will use a forward-looking camera and 76 GHz radar. Each vehicle must also be equipped with a local control system. To achieve global control over the platoon, a communication system, probably using the 5.9 GHz radio channel would interconnect the vehicles.

Project backers say that platooning is designed to improve and cut fuel consumption and CO2 emissions while it reduces traffic congestion.

The technology development is underway but public acceptance of the system and legislation by 25 EU governments will likely hinder acceptance for a while.

Related articles

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Tablets Notes

Forrester Report Casts Doubt on iPad Competitors

Tablets NotesThe New York Times cites a recent Forrester (FORR) report on the state and near future of the tablet marketplace titled “iPad Challengers Have Flawed Product Strategies.”

The report’s main conclusion was that Apple’s (AAPL) iPad competitors have not addressed pricing, distribution, and product differentiation adequately to make a case to consumers.

  1. The new tablets are too expensive. Apple has, unexpectedly, kept iPad prices comparatively low. The Motorola (MSI) Xoom starts at $100 more than the iPad and Samsung’s Galaxy Tab can be had for $250, but that does not include a two-year contract with a mobile carrier. Someone should be coming in to undercut this market, but that has proved harder than it looks.
  2. The wrong stores are selling tablets. Forrester’s research shows that one of the least desirable places to buy a tablet is at a cellphone store. But many tablet makers continue to rely on wireless carriers as a primary retail channel, which Forrester’s report concludes is a bad bet.
  3. The new tablets are not distinguished enough.  The average user does not care about specs because it’s about the apps that run on these toys.
  4. The new tablets are not Windows. Forrester’s survey said the number one operating system people want on a tablet is Windows. If Microsoft (MSFT) is not going to release a true tablet-ready OS until late-summer 2012, those who want a Windows tablet may have to wait for two generations of tablets.

Forrester speculates that an Amazon (AMZN) tablet could change the market. Amazon could offer more attractive terms to media partners than Apple. It already has scads of credit-card numbers for easy one-click app purchases. It has media offerings like streaming video. It now has some experience designing, marketing, and selling its own hardware with the Kindle.

Cisco Cius

CiscoDoes anyone remember Cisco’s Cius? In case you don’t No Jitter has an article from June 2010 by Zeus Kerravala of the Yankee Group. The Cius was purported to be a tablet that can dock into a base station and can act as a video phone. When undocked the device operates like a tablet computer that can be carried around and shared between workers.

Mr. Kerravala says the Cius tablet isn’t really meant to be a replacement for a laptop or an Apple (AAPL) iPad type of tablet. It’s a communications-centric tablet that can provide an easy interface into vertically specific applications, make videoconferencing portable and create a new way for people to interact with one another. The Cius will be centered on visual communications and not productivity applications like word processing and spreadsheets.

The Cius uses  Google’s (GOOG) Android operating system, perhaps to attract developers. The article says the Cisco (CSCO) of a few years ago would have chosen to build its own interface. Android is a key to the success of Cius. The likelihood of developers building applications for an Android-based Cisco device is higher than developers creating applications for a Cisco operating system.

According to the article, the Cius is to be priced under $1,000, comparable to a high-end Cisco IP phone. While no network operator partners were announced at the time, Cisco said that the device was WiFi, 3G, and 4G capable.

Are the End Days Nearing for PCs (and Macs)

GigaOm‘s Ryan Kim recently wrote that the glory days of the PCs are fading with the rise of more nimble smartphones and tablets. Wi-Fi provider JiWire confirmed this trend over the Christmas holidays. JiWire, which operates 35,000 public Wi-Fi hot-spots in the U.S., saw new iPad connections increase by 33.8 percent and new Android (GOOG) users were up 47.9 percent while new Mac users were down 28.1 percent and new PC connections were down 12 percent over the Christmas holidays. Mr. Kim writes that this trend marks people’s dependence on computers is waning as they find more utility and portability in smartphones and tablets.

This trend is shaking up the computer world according to GigaOm. Gartner (IT) recently predicted that PC sales would decline 10% in the face of increased tablet sales. And as mobile networks ramp up to 4G and Wi-Fi usage grows, it’s only fueling the interest in mobile devices. This is a major shift that is forcing all the big players to adjust. The author points out that:

  • Microsoft (MSFT) re-entered the smartphone game at CES 2011 with Windows Phone 7 with Windows OS on ARM (ARMH) designed chips.
  • Intel (INTC) is working hard to get its chips to run on mobile devices though it’s still an uphill battle displacing ARM-designed chips.
  • HP (HPQ) bought Palm last year and is prepping a line of WebOS tablets and smartphones.

Apple (AAPL) is forcing these changes on the industry according to Mr. Kim. the iPhone and the iPad made mobile computing more user-friendly. Apple CEO Steve Jobs predicted that overall PC usage would decline and suggested that lightweight devices like the iPad would do most of the tasks people needed. GigaOm says that companies that embrace this new reality, are the ones best positioned for the future. The new iFuture means PC manufacturers will have to accept that the switch to mobile devices may come at the cost of traditional computer sales. The article concludes that manufacturers can let someone else lure their PC customers away with a tablet or smartphone or they can build one themselves.

Tablets Are Hammering The Notebook Market: Acer Sales Off 10%

The BusinessInsider reports that Acer (ACEIY) has warned that its 2011 Q1 sales will be off 10%. The Taiwanese PC maker is blaming Apple’s iPad and it tablet cousins for devastating its key netbook business.

Related articles

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

GM Saves Energy Through Smart IT

Andrew Winston at the Harvard Business Review writes that opportunities for improving energy efficiency and saving real money are everywhere. The proverbial low-hanging fruit are actually, in the words of energy guru Amory Lovins, fruit on the ground. GM (GM) recently announced a new way to find easy pickings, a shockingly straightforward change in how it runs its manufacturing plants. The Detroit-based auto giant is saving $3 million annually in energy costs across 10 plants by shutting down equipment when it’s not needed.

General MotorsMr. Winston says the man in charge of the program is Mike Durak, the Global Program Manager, IT. According to the article, GM is using General Electric (GE) Proficy Software to automate the shutdown and restart of its equipment. It started simply enough, GM set the lighting in one plant to synch up with the conveyor. When the manufacturing line stopped, for breaks or between shifts, the lighting would shut off. Seeing the quick payback, the managers added all energy-using systems to this automated network, from heating and cooling systems to pumps and compressed air units. The investment in connecting an entire plant is paying back through energy savings alone in just 6 months.

HBR says that previously GM shutdowns equipment multiple times a day with a combination of manual shutdowns and unconnected, or “dumb”, automation. Basically, energy use would gradually ramp down after production stopped as equipment was shut off, and then it would ramp back up before the next shift. “Energy use was in a ‘V-shape’,” Mr. Durak said, “and now it’s more like a U.” (The author says, the difference between a V-shape and a U-shape is what’s saved).

EnergyMr. Winston calls these sudden wins “headslappers” because they’re so obvious…in retrospect. The reasons we miss these easy wins are varied — from inertia to not being incentivized to find them to the classic problem of always addressing what’s urgent (something broken or a new process) over what’s important (getting leaner). Or perhaps a simple, cheap technological fix was not available until recently. In GM’s case, the big change is economically networking a whole range of equipment that wasn’t connected before. So with the new systems in place, managers can use the GE software to monitor and control the plant to a much finer degree.

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Maybe GM is getting smarter; they are figuring out what a “smarter” factory looks like. the Chevy Volt seems to be a “smarter” car.

What do you think?

What is your organization doing to get smarter?

Related articles:

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.