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China's Totalitarianism: What's In It For Us
Electronics | Feb 27, 06
As Google and its brethren accede to Chinese government demands for censorship and information on dissidents, the debate in this country has centered on the tension between the need to do business in the world's most populous nation and the desire to, well, "do no evil." What's been lost in all this is the competitive advantage the PRC is ceding to the U.S. as it pursues its strategy of repression. Indeed, what China is doing may well mean that more of the high-tech items you find on PriceSCAN.com will be designed in the United States, if not actually made here.
As low-skill, low-pay jobs migrate to China and other vast foreign pools of cheap labor, America finds itself locked in a global battle for brainpower with the rest of the world. This is a struggle for which we are well armed, sporting an arsenal of research universities second to none and an economic system that handsomely rewards entrepreneurial innovation. Yet rising nations can build excellent schools; consider the Indian Institute of Technology system, for example. China itself is investing massively in an effort to pull its research universities into the first tier, and has announced plans to increase R&D spending from 1.4% of GDP in 2004 to an estimated 2.5% of GDP by 2020. Further, the blistering growth seen in emerging economies (when they're not going through one of their periodic bust phases) presents a fertile and tempting environment for the gifted and ambitious. Nowhere is this more true than in China, which combines ferocious growth with a gargantuan internal market potential and a ready supply of inexpensive workers.
So where is the United States to find an added competitive advantage? Where it always has: in the repressive policies of its rivals. Numerous academic studies demonstrate that, throughout our history, U.S. economic expansion has been powered by immigration. Those waves of newcomers invariably include some of the most talented, creative minds in the world, driven from their homelands by noxious governments strangling freedom of inquiry and expression.
And that's where China's "Google policy" comes in. Censored searches can restrict more than just what the government sees as ideologically unacceptable, since its not so easy to separate such information from discussion of policy and technology that impacts business decisions and competitiveness. Monitoring of searches can have a further dampening effect on commerce, since now one has to worry one's inquiries might be seen as subversive, or perhaps even passed on to a competitor with superior government connections. And, even beyond the merely pecuniary, as people become better educated and wealthier, their appetite for new knowledge and experience tends to sharpen, and it is precisely this desire which the PRC’s restrictions will make difficult to satisfy.
Search censorship is just one facet of barriers to the free flow of information that makes life less pleasant for China's best and brightest, and frankly, that's great for us. Because the less attractive China makes itself for such people, the brighter the prospect of coming to this country shines. And every time a Chinese grad student in Cambridge or Palo Alto considers sticking around here, the U.S.'s potential GDP growth rate rises. A calculation of this nature was in the mind of most of America's forbearers, save for the fact that the oppression they faced was often more acute, if not life threatening. There is, after all, a reason economics is called the dismal science, and political economy tends to be more dismal still. China's actions may violate human rights and basic decency, but the fact is that a formidable competitor is voluntarily handing us a rare advantage. And just think: we didn't even have to impose protectionist tariffs or mess around with the WTO.
Posted by jeffrey.trester at 3:23 PM | Comments (0) | TrackBack
Hackers To Apple: No More Hiding Behind Your Puny Market Share
Computers | Feb 23, 06
There was a time when the Mac faithful could console themselves that there was safety in their iconoclastic choice in computing platform. As part of only five percent of the market, there just weren't enough of them to attract the attention of hackers, a point even the Pentagon was said to take into account in its choice of servers. But having a Tiger on your hard drive may no longer guarantee your security.
This week, three different worms were discovered boring into Apples, including one specifically targeting iChat, as well as a zipped graphic e-mail attachment and one that zeros in on a Mac's Bluetooth connection. Why the sudden interest in tormenting Cupertino's loyalists? Maybe the rise of another Apple product with far more formidable market share (and perhaps more importantly, mind share) has something to do with it, that being of course the iPod. While not all iPod users have Macs, a great many Mac users have iPods, and messing with the machine on which those iTunes are accessed and backed up may now be too tempting a target to ignore. And now that the iPod has reminded the world that the Mac OS exists, perhaps that operating system's architecture will make it attractive prey, given that it's built around the Unix kernel that old-school crackers know so well. So, oddly, even those Mac users who've never listened to music on little white earbuds may wind up paying a price for the ubiquitous iPod.
Posted by jeffrey.trester at 4:48 PM | Comments (0) | TrackBack
iPod Shuffles To The Cheap Side
Electronics | Feb 9, 06
Back on 1/18 I noted that Apple iMacs were selling at surprising discounts to Sony VAIOs, indicating an apparent willingness on the part of Cupertino to compete with other high-style manufacturers on the basis of price, as opposed to charging a premium for Apple’s unique design (Apple Cool Selling At Surprising Discount To Sony Style). Now, Apple may be extending that strategy to music players as well. The firm has just cut the price of the iPod Shuffle 512 MB to a mere $69. As of this writing, only SanDisk 512 MB MP3 players are offered for less by vendors on PriceSCAN.com. One of these, the SanDisk Sansa M230, does have an FM tuner (another player, Creative Lab’s MuVo Micro N200 512 MB Digital Music Player Recorder with Radio, offers FM with in-line recording for $69.99).
Now I happen to be a big fan of being able to listen to radio on a portable, but something tells me its going to take more than the ability to listen to the local "morning zoo" broadcast on a digital player for consumers to forsake iPod "sleek and cheap" formula (not to mention iTunes). Of course Apple may be cutting the Shuffle price partially to overcome cannibalization of its own line – the new smaller Nano and the iPod with Video are the new hotness, after all. Rival manufacturers had best come up with something cooler if they want to survive. And the record labels should also be wary, lest they find themselves subject to a new commandment: thou shalt sell no music without the consent of Steve Jobs. Perhaps we're to be treated to that most entertaining of contests: a conflict between a monopoly and a cartel.
Posted by jeffrey.trester at 4:05 PM | Comments (0) | TrackBack
For Flat Screens, Popularity Equals Price Stability
Electronics | Feb 6, 06
Now that the Super Bowl is behind us, will we finally see the most popular flat-screen television models fall in price? Late last year many pundits predicted that increased production would lead to significantly lower post-holiday prices, and a casual inspection of vendor prices on PriceSCAN.com appears to confirm such a decline. However, when it comes to more popular models, demand seems to be strong enough to overcome any supply issues and we are actually seeing some price increases. Going into the holidays I noted that some Panasonic plasmas were actually rising in price, and for some models this trend has continues – see the chart of the 50 inch Panasonic TH-50X50U below.
Time Period: 4/18/2005 through 1/30/2006
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
However, we're also seeing firmness in the price of the most popular LCD set on PriceSCAN, namely Sony’s KDL-V40XBR1 40 inch BRAVIA XBR High Definition LCD WEGA, with the lowest offer price creeping up around $200 over the last few weeks (though the average price has fallen by about that much). So watching those soon-to-be-Clio nominated beer ads on the most sought-after high-def panels cost you at least what it would have before they dropped that ball in Times Square.
(Editor's note - this graph has been updated - see "Spring LCD Television Price Slide")
Time Period: 9/19/2005 through 4/17/2006
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
Posted by jeffrey.trester at 9:32 AM | Comments (0) | TrackBack
