Smartphones, tablets and other gadgets aren’t just changing the way we live and work. They are shaking up Silicon Valley’s balance of power and splitting up businesses.
Long-established companies such as Hewlett-Packard Co and eBay Inc are scrambling to regain their footing to better compete against mobile-savvy trendsetters like Apple Inc and Google Inc, as well as rising technology stars that have built businesses around “cloud computing.”
That term covers a swath of Internet-driven services that shifted technology from the days software users paid a one-time fee to buy and install programs on individual machines that had hard drives on which they also stored all their data.
With the advent of the “cloud,” people can now rent software to use over the Internet. This enables customers to access documents, pictures and other vital information from any kind of Internet-connected device, a convenience that’s become a necessity during the past few years as people increasingly rely on smartphones and tablets instead of laptop and desktop computers.
Business software makers such as Salesforce.com Inc, VMware Inc and Workday Inc built their entire business models around the cloud. All have delivered impressive revenue growth that turned their stocks into hot commodities.
Online storage services Dropbox and Box have yet to go public, but they have been minted with big valuations from venture capitalists who believe they will thrive amid the increased usage of mobile devices and cloud-computing services.
Meanwhile, Apple and Google are prospering from the rise of mobile devices now that their respective rival software systems — iOS and Android — run most of the smartphones and tablets in the world. Apple now reigns as the world’s most valuable company, worth about US$600 billion, while Google ranks third at about US$400 billion.
Google is developing another way to make money off the cloud-computing movement: leasing some of the servers in its data centers to mobile application and Web service providers. Amazon.com Inc has been doing the same thing for an even longer time, enabling providers to develop and introduce new cloud computing services without having to spend a lot of money on servers sold by the likes of HP, IBM Corp and Oracle Corp.
The rise in mobile popularity has taken a big bite out of PC sales. Since Apple ignited the tablet market with the 2010 release of the iPad, the annual revenue in HP’s PC division has plunged by more than 20 percent.
That downturn is a key reason why HP’s market value has fallen by about US$55 billion, or 40 percent, since the iPad’s release. In an effort to adapt, HP on Monday last week said it will spin off its PC and printer operations to form a separate company tailored to business software and services for the cloud-computing age.
HP and other large companies are “struggling to compete against younger upstarts,” long-time Silicon Valley observer Paul Saffo said. “Once upon a time, scale and size were a competitive advantage. Now, they are a problem.”
Last week, online marketplace eBay announced a similar spinoff. After rejecting the notion earlier this year, it decided to unleash its online payment service, PayPal, to give it a better chance to compete against threats posed by other mobile payment options. Most analysts believe Apple’s decision to introduce its own mobile payment service, Apple Pay, on the new iPhones released last month prompted eBay’s decision.
“Is this the beginning of a trend?” asked Bob O’Donnell, chief analyst at TECHnalysis Research. “We saw a lot of tech firms become conglomerates. At a certain point in any market, the pendulum starts to swing back the other way. You start to sell off pieces because it becomes unmanageable as a business.”
Yahoo Inc, a long-struggling company that built one of the Internet’s best-known brands, currently faces pressure from activist investor Starboard Value LP to make changes such as spinning off its lucrative stakes in two Asian companies, Alibaba Holding Group Ltd (阿里巴巴) and Yahoo Japan. Since Starboard urged the company to take action in a letter late last month, Yahoo has only said it will explore its options and maintain an “open dialogue” with all shareholders.
Even though both HP and eBay dawdled with their spinoffs, it is probably a good sign that they both finally got around to doing it, technology analyst Rob Enderle said.
Investors evidently think so too.
“The companies are at least trying to evolve to address the threat, which is a good sign because the change in technology is accelerating,” Enderle added.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained