Archive for ‘Technology’

03/09/2015

The Successful Indian Tech Companies You’ve Probably Never Heard Of – India Real Time – WSJ

The lofty valuations of India’s consumer-focused startups like Flipkart and Snapdeal have gotten a lot of limelight lately, but the country’s up and coming software product technology firms are also growing rapidly, says iSpirit Foundation, a Bangalore-based technology lobby group.

An index capturing the 30 most-valuable Indian software product-makers has risen by 28% in eight months since Oct. 30, a report released by iSpirit, which puts together the index, said Thursday. These companies, as estimated by iSpirit, were worth a total of $10 billion at the end of June. “There has been an acceleration since 2010 in the pace of creation of B2B (business-to-business) companies,” the report said.

More In Technology The Successful Indian Tech Companies You’ve Probably Never Heard Of Are You Addicted to the Internet? Take the Test Internet Addiction: How to Help Protect Your Children 5 Things to Know about Foxconn’s Ambitions in India Uber to Invest $1 Billion in India Indian techies and venture capitalists often rue that though Indians occupy top positions in global tech companies like Microsoft Corp.MSFT +3.55% and Oracle ORCL +2.05% Corp, the country hasn’t produced a major software firm up to the caliber of these multinationals.

In December, a Silicon Valley-based entrepreneurship trade body, the Indus Entrepreneurs, launched a program to help grow a select number of Indian product companies to become worth a billion dollars or more each. To help garner attention for software-product makers, iSpirit created its index last year. For this, it considered more than 300 Indian companies that make and sell software or provide applications that support other businesses. The index doesn’t include technology outsourcing firms like Infosys Ltd.500209.BY +3.56% and Tata Consultancy Services Ltd.532540.BY -0.08%, or consumer-oriented technology companies, like Flipkart and ANI Technologies Pvt Ltd.-owned Ola, a taxi-hailing application, which use technology to sell products to individuals. Companies included are firms like Bangalore-based InMobi Technology Services Pvt. Ltd., which competes with Google Inc.GOOGL +2.69% and Facebook Inc.FB +2.96% globally to provide a mobile advertising platform, and Delhi-based Wingify Software Pvt. Ltd, which analyses web-user data to enable companies to create more effective webpages.

Other companies are Capillary Technologies, which creates software that helps retailers manage customer data and counts shoemaker Nike NKE +1.91% and Pizza Hut among its customers, and Druva Software Pvt. Ltd., which provides data backup and other services to companies like Dell Inc. The index also has a few companies which have been around for more than two decades, such as Delhi-based Newgen Software Technologies Ltd, and accounting software-maker Tally Solutions Pvt. Ltd.

These software companies have also caught the eye of international investors in recent years. “There’s a consistent amount of capital going in…I wouldn’t say it’s a flood,” said Dev Khare, managing director of Lightspeed India Partners Advisors LLP, a venture-capital firm. Mr. Khare volunteers with iSpirit and helped put together the report on technology firms. In rupee terms, the 30 most-valuable companies as estimated by iSpirit were worth 655 billion rupees ($10 billion) at the end of June, versus 375 billion rupees at the end of October. The composition of the index has changed, to include some companies whose valuations have grown rapidly since the fall. To be sure, these valuations pale in comparison to that of Indian consumer companies. Flipkart alone was valued at $15 billion in May following a round of capital raising, up from $10 billion in December. Mr. Khare said that though consumer-focused tech companies have gotten a larger share of investor capital in recent years, historically, both consumer and software-product companies have provided good returns to investors. Many of the new Indian software companies are creating products for the tech consumer companies, such as software to manage customers who buy online, or software to manage logistics. Two-thirds of the 30 companies in the iSpirit index are based in India, while others are domiciled in Singapore and Silicon Valley. Most of the companies sell their products to clients globally. “As the conditions become more favorable, more capital will flow into these companies as well,” said Mr. Khare.

Source: The Successful Indian Tech Companies You’ve Probably Never Heard Of – India Real Time – WSJ

24/08/2015

Are the Best Days Over for China Tech Startups? – China Real Time Report – WSJ

Over the past year, China has seen a boom in its startup scene, thanks to plenty of capital flowing into the sector.

But some investors and entrepreneurs say that could be changing as Beijing struggles to restore confidence in its economy and faltering stock market.

In Shenzhen, hundreds of entrepreneurs and investors gathered on Sunday at an event called Big Salad, where local startups talked about their business ideas, including high-tech underwear and affordable smart glasses. Everyone was full of enthusiasm and the mood was upbeat throughout, but some of them were also bracing for tougher times.

“Raising new money is difficult now,” said Mosso Lau, vice president of Shenzhen-based Firebird Institution, which runs funds that invest in early-stage startups while also serving as an incubator that helps startups develop their business ideas.

Firebird set up its last investment fund two years ago by collecting 12 million yuan ($1.9 million) from local businesses and wealthy individuals. It invested that money in tech startups such as mobile apps for food delivery and massage services.

As Firebird is now preparing to set up a new fund for next year, Mr. Lau expects it will be a lot harder to collect money this time, because potential investors have been hit by the recent stock market turmoil. “From last year until this June, there was so much money in venture investment. It was unusual,” he said.

Last year, venture-capital investments in China’s tech sector more than doubled to $6 billion from $2.8 billion in 2013, according to Hong Kong-based AVCJ Research, with both foreign and domestic funds putting in more money than the prior year. Total early-stage funding for Chinese tech startups surged to nearly $2 billion last year from $313 million in 2012 as deals increased to 299 from 172, according to AVCJ.

In January, when Jerry Dai founded a startup in Shenzhen that operates a crowdfunding platform similar to Kickstarter, there was nothing but optimism.

Entrepreneurs around him who had already raised capital told Mr. Dai that fundraising for his new venture wouldn’t be a problem because angel investors — individuals or funds that provide capital for early-stage startups before formal investment rounds — were financing just about any business idea.

But now, just as his startup is trying to find an angel investor, things are looking tougher.

“There are still many angel investors, but they are getting more selective,” he said. “Some investors think there is a bubble in China that may break in one or two years.”

Mr. Dai said he expects the process of securing funds to take longer than it would have several months ago.

“Last year was crazy. There was so much money in China,” said Heatherm Huang, a cofounder of MailTime, which makes emails easier to use on smartphones. Even though his startup is based in San Francisco, it raised much of its early funds from Chinese investors. “In some ways, things are going back to normal now.”

via Are the Best Days Over for China Tech Startups? – China Real Time Report – WSJ.

23/08/2015

Spectacular Images of Mars From India’s Most-Ambitious Space Mission – India Real Time – WSJ

Next month, India’s mission to Mars is expected to complete a year in orbit around the red planet and its photo album so far is out of this world.

The spacecraft, named Mangalyaan, Hindi for Mars craft, has already completed more than 100 orbits since it arrived at the planet on Sept. 24, 2014.

At a cost of $74 million, the Indian Space Research Organization’s mission to Mars was the cheapest of recent missions to Mars mounted by other space agencies.

The satellite is healthy and continues to “glean data,” Debiprasad Karnik, a spokesman for ISRO, said Friday.

Apart from a few days in June when it lost touch with Earth after moving behind the Sun in a phenomenon called “solar conjuncture,” Mangalyaan has remained in contact and been sending photographs taken by the Mars Color Camera back to scientists in India.

The photo above, taken in July, is of the Ophir Chasma, part of what the National Aeronautics and Space Administration describes as the largest canyon system in the solar system, known as the Valles Marineris.

NASA calls the geographical feature the Grand Canyon of Mars. At a length of more than 1,800 miles, it is almost 3.5 times the length of the Grand Canyon in Arizona. The walls of the chasma, that is described by the International Astronomical Union as “an elongate steepsided depression,” are multi-layered, the floor too contains large deposits of layered materials.

via Spectacular Images of Mars From India’s Most-Ambitious Space Mission – India Real Time – WSJ.

20/08/2015

What Stands in the Way of Modi’s Digital India – The Numbers – WSJ

Indian Prime Minister Narendra Modi has grand plans to expand the reach of the Internet to his country’s most far-flung citizens.  But some big numbers stand in his way.

1.06 billion

The number of Indians who currently don’t have access to the Internet. India’s offline population is greater than that of China and Indonesia–home to the next two largest unconnected groups–combined.

1 million

The number of miles of fiber optic cable needed to connect 250,000 village clusters in India to the Internet, according to a committee set up to get the project into gear. The original plan estimated that 370,000 miles of cable would do the job.

1%

The proportion of clusters of villages that up to June 30 were fully connected to Internet services in community centers, hospitals and schools under the National Fiber Optic Network that was launched in 2011.

2013

The original deadline for completion of the network. The date has since been shunted back twice and now stands at 2019.

$11.2 billion

The revised budget for the fiber optic network. Almost four times what was originally planned.

via What Stands in the Way of Modi’s Digital India – The Numbers – WSJ.

14/08/2015

‘Car suit’ keeps vehicles high and dry during floods, Chinese inventor says | South China Morning Post

A man in eastern China has invented a “suit” for cars he claims protects them from water damage during the floods that regularly inundate the mainland’s coastal cities, an online newspaper reports.

The cover consists of a copolymer thermoplastic material and waterproof zippers. Photo: SCMP Pictures

More than 3,000 vehicles were flooded when Typhoon Soudelor hit Taizhou in Zhejiang province on August 8, Thepaper.cn reports. One photo of the storm that has drawn particular interest online shows a car wrapped in a heavy, water-proof material.

The man behind the idea is Huang Enfu, a businessman who deals in car parts. “News about damaged cars during urban floods regularly appears. Our costal city often sees such floods. That’s why I invented the suit,” Huang was quoted as saying.

The cover consists of a copolymer thermoplastic material and waterproof zippers. A car owner puts the suit down in an empty space, parks the vehicle over top, pulls the sides up and zips it closed.

Huang said he spent more than 1.6 million yuan (HK$1.93 million) and two years coming up with the idea. He has patented the design and sells them for between 1,500 yuan and 2,500 yuan

Residents in mainland cities have long complained urban sewage systems cannot cope with heavy rainfall during the wet season. Drains easily become overloaded and the water levels on flooded main streets can quickly rise past people’s waists.

Huang says his invention will even allow a properly zipped-up car to float if the water levels become too high. Owners can secure the car suit by tying the four attached ropes to a stationary object.

via ‘Car suit’ keeps vehicles high and dry during floods, Chinese inventor says | South China Morning Post.

12/08/2015

India’s Smartphone Market Is Booming – Especially at the Low End – India Real Time – WSJ

Xiaomi Corp., which announced Monday that its some of its phones are now being assembled at a factory in India, isn’t the only Chinese smartphone maker with its eye on the subcontinent.

With the Chinese economy slowing and demand for smartphones picking up in India, Chinese handset makers including Lenovo Group Ltd.0992.HK +1.70%, Huawei Technologies Co. and Gionee Communication Equipment Co.  are looking to produce and sell more phones in the world’s second-most-populous nation.

But Indian consumers prefer cheaper phones than their Chinese counterparts. Roughly half of smartphones sold in India for the three months ended in June cost less than $100. In China, these low-end smartphones accounted for about 20% of the market over the same period, according to research company International Data Corp. IDC predicts the average selling price of Indian smartphones will fall to $102 in 2018 from $135 in 2014.

The $100 Galaxy J1 and other inexpensive handsets drove sales for Indian smartphone market-leader Samsung Electronics Co.005930.SE 0.00%, helping to increase its share of sales to 23% of the smartphones sold during the quarter ended June 30. In other markets, including China, sales are driven by its flagship Galaxy S6 and Galaxy S6 Edge, which sell for around $600 and $700, respectively, in the U.S.

Smartphone penetration is growing rapidly. While Internet penetration levels in India resemble China’s numbers from six years ago, smartphone penetration is only four years behind, according to a Credit Suisse report. The skyrocketing growth has even caught the attention of Apple Inc.AAPL -5.49%, which recently started offering financing to make its iPhones more accessible to Indians.

That might be bad news for smartphone manufacturers who operate on already razor-thin margins, but it’s potentially good news for Indian consumers and the Indian economy.

It also helps explain why contract manufacturing giant Foxconn says it intends invest billions of dollars setting up factories in India, and why Xiaomi recently announced its first made-in-India smartphone, the $107 Redmi 2 Prime. Changes to tax rules now make it cheaper to manufacture electronics in India. It also shortens the supply chain, meaning phone-makers can get their products to consumers faster and reduce inventory costs.

via India’s Smartphone Market Is Booming – Especially at the Low End – India Real Time – WSJ.

10/08/2015

5 Things to Know about Foxconn’s Overseas Ambitions – WSJ

Foxconn, Apple Inc.’s major assembler, has signed a preliminary deal with India’s Maharashtra state to invest $5 billion in factories and research facilities in coming years. But the company, officially known as Hon Hai Precision Industry Co., has a history of making ambitious statements and floating investment ideas that haven’t materialized. Here are five things to know about Foxconn’s overseas ambitions.

Deutsch: Foxconn Logo

Deutsch: Foxconn Logo (Photo credit: Wikipedia)

1 India isn’t its first billion-dollar bet

In 2011, Foxconn agreed to invest $12 billion in Brazil to create a new supply chain that it had hoped will generate jobs. But four years later, Foxconn’s investment in Brazil has been much smaller than the pledged amount. It is still struggling to improve the manufacturing operations at its plants for iPhones and iPads there citing its inefficient labor force. The company has also been in talks for a new plant investment in Indonesia for years.  The Indonesian government once said that Foxconn would invest up to $10 billion, but plans remain in limbo due to political snags.

2 Why India?

While China remains the world’s largest smartphone market by shipments, India has the biggest growth potential for the next 5 years, says Bernstein analyst Mark Li. India recently raised taxes on mobile phones imported to the country to 12.5% from 6%, spurring global handset makers to look at ways to manufacture devices locally.

3 Sign of shift in manufacturing to India from China?

Analysts say it is unlikely that India will overtake China to become the company’s main production base in the next few years as China has an well-established supply chain ecosystem. India still lacks good infrastructure and favorable tax and labor policies, making it a less attractive destination for tech manufacturing.

4 Foxconn Chairman Terry Gou always aims for the best deal

The agreement with the Indian government is non-binding. Foxconn Chairman Terry Gou usually gives a rosy picture about the company’s potential investments when he negotiates with government officials. But only a few investment plans materialize as he wants favorable terms including big tax incentives and free land that most governments can’t accommodate.

5 Foxconn seeks other investment opportunities in India

The company and Chinese e-commerce giant Alibaba Group Holding Ltd. are in talks to jointly invest about $500 million in Snapdeal.com, a five-year-old Indian e-commerce startup. The deal would give Foxconn a retail foothold in India where it has experienced booming demand for smartphones. Foxconn is also setting up a new production site for Chinese smartphone maker Xiaomi Corp. in India.

via 5 Things to Know about Foxconn’s Overseas Ambitions – WSJ.

10/08/2015

China’s Xiaomi to Make Smartphones in India – India Real Time – WSJ

Chinese smartphone maker Xiaomi Corp. will begin manufacturing phones in the southern Indian state of Andhra Pradesh, according to the state’s highest elected official.

A tweet from the verified account of N. Chandrababu Naidu, the state’s chief minister, said Xiaomi would announce the move today.

Xiaomi’s move follows Taiwanese contract manufacturer Foxconn’s announcement Saturday that it plans to spend $5 billion on factories and research and development in the western state of Maharashtra. Foxconn, known officially as Hon Hai Precision Industry Co. assembles Apple Inc. iPhones and as well as most of Xiaomi’s phones. Foxconn has a plant in Andhra Pradesh.

The Indian government amended its customs rules recently to make it more attractive to make electronic goods in India, as it seeks to boost manufacturing, create jobs and reduce reliance on expensive imports from China.

via China’s Xiaomi to Make Smartphones in India – India Real Time – WSJ.

10/08/2015

‘Silicon Valley’ China

The following was in answer to a series of questions by a journalist from International Finance Magazine.

The specific questions and answers are:

> Do you think China can be the next Silicon Valley? Indubitably

> What are your reasons? See this paper

> What according to you are the differentiating factors between China and Silicon Valley? Longevity, experience and culture including education system.

> Which are the areas where China scores points over Silicon Valley and which are the areas wherein it needs to improve?Whereas the US has a Silicon Valley and the area around Boston, China has several dozen ‘silicon valleys’ though most are in embryonic stage. Whereas the US Silicon Valley has a long history of success, which breeds success, the Chinese ones are all very new, although the oldest Zhongquancun in a Beijing suburb dates from the 80s; and in 2014 launched nearly 50 tech start-ups. See III.

> What steps does China need to take to have more of AliBabas in the country? See this paper which suggests that steps are already being taken.

> Some say that there is no dearth of money in China and hence there are many VCs and private equity firms. However, what is lacking is a disciplined approach. Your take on this. Agreed. However, the two magnets for investment in the past have been real estate and the so-called stock market, which is another name for legalized gambling.  Both have suffered reverses, property for a while and recently the stock market.  The Chinese investor is a quick learner.  Sooner rather than later they will turn to instruments and institutions that invest in innovation.

> How well are the young Chinese embracing entrepreneurship? The young in general are following the old path of secure jobs in government or established industry.  But with 1.3 billion people, there are enough youngsters interested in innovation and entrepreneurship for them to be a real force.

>Does the education system in China foster this? No it does not, See II – 3. last para.

 ==================

I believe that China is rapidly catching up with the US in innovation and entrepreneurship.  I say this for four reasons:

i. China has always been innovative and inventive.

ii. The Chinese government sees innovation and entrepreneurship as the solution to its rapidly dated ‘cheap’ mass manufacturing. It knows that China is experiencing its version of the industrial revolution in a fraction of the time it took the west and needs a new trick up its sleeve if China is not to be relegated to a third-world nation once again.

iii. China is already innovative and entrepreneurial in practice and speeding up the learning curve at the same speed it took up industrialization after Deng.

iv. Some respected ‘guru’s think so too.

I.   China has always been innovative and very inventive.

 We have all heard of gunpowder, movable press, paper making and the compass.  In 1948, Joseph Needham, Cambridge University set out to document Chinese innovation – https://en.wikipedia.org/wiki/Joseph_Needham Needham had heard a lot about this and was slightly skeptical, so he started professional research on it.  Today, his work – Science and Civilisation in China  – is still in progress although he passed away.  Seven volumes in 27 books have been published so far and the end is not in sight.  To help the lay reader, Prof Robert Temple has written a short book on it – The Genius of Chinahttp://www.curledup.com/geniusch.htm

II.  The Chinese government is focused on innovation and entrepreneurship.

It knows that its current USP, inexpensive and mass manufacturing will not last.  In fact, in some low tech areas it is discouraging any new factories.  It has also been steadily pushing up the minimum wage, thereby discoursing such manufacturing. In my view it has done four specific things to encourage innovation and entrepreneurship:

  1. Five-year plans, in particular:
  1. a. the 12th (2011 – 2015) – http://www.c2es.org/international/key-country-policies/china/energy-climate-goals-twelfth-five-year-plan – which included this section:

              Old pillar industries               The new strategic and emerging industries

1 National defense Energy saving and environmental protection
2 Telecom Next generation information technology
3 Electricity Biotechnology
4 Oil High-end manufacturing (e.g. aeronautics, high speed rail)
5 Coal New energy (nuclear, solar, wind, biomass)
6 Airlines New materials (special and high performance composites)
7 Marine shipping Clean energy vehicles (PHEVs and electric cars)

Sources: “Decision on speeding up the cultivation and development of emerging strategic industries,” http://www.gov.cn, September 8, 2010, http://www.gov.cn/ldhd/2010-09/08/content_1698604.htm; HSBCChina’s next 5-year plan: What it means for equity markets, October 2010.

1.b and the 13th (2016 – 2020) – http://www.chinabusinessreview.com/understanding-chinas-13th-five-year-plan/ – one of whose aims is likely to be “to support emerging industries”

  1. “Made in China 2025” policy – http://www.chinadaily.com.cn/bizchina/2015-05/19/content_20760528.htm -The 10 key sectors are new information technology, numerical control tools and robotics,aerospace equipment, ocean engineering equipment and high-tech ships, railway equipment,energy saving and new energy vehicles, power equipment, new materials, biological medicineand medical devices, and agricultural machinery.
  2. “Mass innovation and entrepreneurship” – http://www.chinadaily.com.cn/business/tech/2015-01/29/content_19436562.htm– “Chinawill foster a platform offering low-cost services in a variety of areasto micro businesses and individual start-ups that show

The government will also step up policy support, such as simplifying registration proceduresand giving subsidies, to innovative businesses. They will improve financing systems to givespecial support to start-up companies, according to the statement.

Although China’s broader economy is slowing, China’s young entrepreneurs are driving awave of startups that has become a bright spot for the economic landscape and an importantengine for future growth.

The number of newly founded companies in China surged almost 46 percent year on year to3.65 million in 2014, the latest data showed.”

China is very aware that the current education system does not foster innovation or entrepreneurship; so it is proposing major reform – http://www.chinadaily.com.cn/china/2015twosession/2015-03/11/content_19783458.htm – Current Chinese education has been criticized by many for being rigid and killing students’ imagination. In many exams, students are supposed to memorize the standard answer instead of putting forward their own ideas.

“Innovation requires the ability to seek different answers to the same question, through which they still reach the right destination,”

http://news.xinhuanet.com/english/china/2015-01/28/c_133954148.htm – “China’s State Council pledged to take various steps to create an amicable environment for innovation and entrepreneurship in order to power growth and generate jobs. … Although China’s broader economy is slowing, China’s young entrepreneurs are driving a wave of startups that has become a bright spot for the economic landscape and an important engine for future growth.

The number of newly founded companies in China surged almost 46 percent year on year to 3.65 million in 2014, the latest data showed.”

III. Innovation in practice

In practice, China now leads in world patent filing – http://chindia-alert.org/2015/05/21/patent-applications-lead-the-worldfocuschinadaily-com-cn/ – though in terms of patents filed in the US it is still behind Japan.

Chinese ‘silicon valleys’ – in addition to Zhongquancun, opened in the 80s – 80s –http://www.forbes.com/sites/ruima/2014/10/20/one-billion-chinese-entrepreneurs/andhttp://www.bloomberg.com/news/articles/2015-03-11/china-s-silicon-valley-sparking-49-technology-startups-a-daythere are dozens around the country.  It seems the ‘copycat’ syndrome applies to coy-catting innovation and entrepreneurship!- http://www.bloomberg.com/news/articles/2015-07-23/china-wants-silicon-valleys-everywhere

Chinese innovative products include, of course, AliBaba; but also, according to Forbes, in eight ‘industries –http://www.forbes.com/sites/anaswanson/2014/11/30/eight-innovative-industries-china-does-better-than-anywhere-else/:

  1. Micropayments
  2. E-commerce
  3. Delivery services
  4. Online investment products
  5. Cheap smart phones
  6. High speed rail
  7. Hydroelectricity
  8. DNA sequencing

IV.From ‘guru’s

You do not need to take my word for it, see comments by:

  1. Kai-Fu Lee, Google exec – http://blogs.wsj.com/chinarealtime/2015/07/30/behind-the-surge-in-chinese-tech-startups/?mod=chinablog&mod=chinablog
  2. McKinsey & Co – http://www.mckinsey.com/insights/asia-pacific/a_ceos_guide_to_innovation_in_china
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