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Category: China

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Chinese Tech and Startup Scene

“Zhongguancun” may not sound as familiar to you as “Palo Alto” or “The Valley,” but, one day, it might.


Zhongguancun, located in one of Beijing’s northwest districts, is deemed by many to be the “Silicon Valley of the East.” While such “Silicon Valley of the <Insert Place Name>” claims seem to multiply faster than bloggers write articles, there is some merit to the hopes that Zhongguancun will emerge as a leading center for technology, software, and innovation.


Among the masses of office buildings and coffee shops, a thriving entrepreneurial community exists where young and ambitious techies meet, drink and do business with wealthy investors. These investors are increasingly becoming a source of capital that, at one time, was closed to all but the biggest companies. These startups are partially powered by a university system that pumps out between seven and eight million graduates per year. Many of China’s top universities are located very close to Zhongguancun, providing a constant supply of top talent into this business-incubator.


Among the thousands of would-be mega-companies in the TMT fields (Technology, Media and Telecommunications) are actual mega-companies. Firms like Google, IBM, Sun, Oracle and Sony Ericsson, among many others, have a presence in Zhongguancun. These firms are, no doubt, doing their own R&D, but are also interacting and cross-pollinating with entrepreneurs. In a world where buyouts of smaller firms and startups are common, any meeting or interaction could mean big bucks and tech glory for this new generation of entrepreneurs.


China has its fair share of large companies that dominate their respective markets and the R&D scene therein. Tencent and Alibaba, two of the most prominent internet-centered companies have been on spending sprees for the better part of the year. Where one firm invests, be it in eCommerce payment gateways or taxi-hailing apps, the other follows suit as if to counteract any growth in the market share or industries served by its rival. For tech startups around China, these two internet giants represent receptive audiences as well as the type of aggressive growth strategies that can help an app achieve national prominence and become the standard by which similar apps are measured and judged. Although WeChat was developed in-house by Tencent, its success indicates what is possible when a good app meets a huge company with substantial marketing budgets. Internet search engine giant, Baidu, recently acquired a company called 91 Wireless for a cool $1.9 billion. 91 Wireless was China’s third largest app store from which consumers can purchase apps for the roughly 420 million smartphones in China. As Google Play is largely inaccessible in China, local providers like 91 Wireless have filled the void, offering a place for Android-users to download games, apps, and other digital goodies.


Baidu’s acquisition of 91Wireless was widely acknowledged as a strategic move by Baidu to capture more of China’s booming mobile dominated- economy. While Baidu dominates the desktop search engine market, “it is not as well established in the mobile internet space,” noted Andy Yeung at Oppenheimer & Company. In addition to posing challenges for Baidu, the mobile realm is seeing the entry and rise of several local firms that are beginning to challenge companies like Apple and Samsung for market share. Xiaomi, which recently hired Hugo Barra to serve as vice president of its global division, is an up-and-coming player in the mobile realm and a producer of premium smartphones at bargain prices that has a knack for publicity-spawning sales and promotions. Huawei, based in Shenzhen, sells huge quantities of telecommunications equipment all over the world (the U.S. market being a major exception). Currently, it is the third largest smartphone manufacturer in the world, a peak it has reached on the back of strong sales on the Chinese market.


From where will the next Chinese technology giant emerge? Likely from one of the numerous coffee shops, like Garage Café or 3W Café,, that populate the streets, corners, and alleys of Zhongguancun. Fast internet connections and a plethora of power strips make Garage Café a location of choice for teams of entrepreneurs who work there around the clock to bring their ideas and apps to life. The café even draws its name from the birthplace of some of the world’s most well-known startups. Apple, Harley Davidson, Hewlett Packard and Amazon, and many others that make a long list of guts-to-glory firms—all started in garages. The Café’s founder, Su Di, wanted his coffee shop to be “a utopia for business startups.” It seems likely he has met and exceeded his goal, a startup-related victory in itself. 3W Café even allows patrons to register their startups using the café’s address and rents workspaces on a monthly basis. It has become a haven for internet related events, meetings, and brainstorming sessions.


The unique environment of universities, technology giants, entrepreneurs, and investors helped make Zhongguancun the dynamic and exciting place it is and has led many observers of the global tech and startup scene to begin whispering the “Silicon Valley” moniker in an effort to describe it. As for us in China, we’re content to wait and see what great app or product emerges from Zhongguancun next.


Top Startup and Tech News Today: 7 Things You Missed Today

1. Google Looks To Help Startups Start Up, Unveils Hub Network


Google announced on Wednesday that it would be partnering with co-working spaces and startup hubs (a place where companies can get access to an office, mentors, and other resources) to create a hub network. This initiative is being overseen by Google for Entrepreneurs. Google already has startup hubs in London and Tel Aviv, but this new network will cover seven less-prolific startup towns, from Chicago to Nashville to Minneapolis. Google says that they will back these hubs financially and technologically. Companies at the hubs will have more access to Google products, which includes cloud storage, Google App Engine credit, and Google Maps API. Google will check in with the hubs once a month and arrange annual events. Startups will have access to many Google marketing employees for mentorship.


Outreach to startups is becoming increasingly common among big companies, as they try to find innovation before another company does. Earlier this month, Samsung created its own accelerator.


2. China To Lift Ban On Sale Of Video Game Consoles: Reports


China is moving to repeal a 13-year ban of the selling of video game consoles. This came through a set of rules issued by the State Council in regards to the new free-trade zone in Shanghai. Foreign companies are now free to begin selling their products in China as long as the companies operates within the free-trade zone. However, each device must be pre-approved by the Culture Ministry. Consoles were initially banned in 2000 over concern that video gaming would be detrimental to the younger generation.


3. App Developers Refuse To Give Up On BlackBerry 10


BlackBerry isn’t in a good place right now, especially not after just having posted a billion-dollar loss for the second fiscal quarter. But, some good news for BlackBerry comes in the form of a report from Digitimes, in which application developers claim that they aren’t going to bail on the Blackberry 10. At the BlackBerry Jam Asia 2013 conference this week, many developers said they planned to continue building and supporting applications for the BlackBerry 10. Some developers say that smaller mobile platforms like the BlackBerry 10 are more attractive, because the iOS and Android app stores are too noisy, and thus harder to break in to. BlackBerry is currently in talks with Fairdox Holdings for a $4.7 billion acquisition. It this buyout goes through, it is uncertain what lies ahead in BlackBerry’s future.


4. Web Site Leaks Images of Gold iPad Mini


Apple is taking note of the tremendous success and popularity that was the gold iPhone 5S. After their numbers blew away Wall Street’s prediction and even their own predictions, Apple has decided that the more gold, the better, and may launch a gold iPad mini. ZOL, a Chinese web site, has leaked images of an iPad mini in the same color scheme as the 5S. There have also been leaked images of the iPad mini in Apple’s “space grey” color, so Apple may be bringing new color schemes to all of its iDevices. In additional to the new color scheme, pictures of the new iPad mini also confirmed that it will also have touchID fingerprint scanning and retina display.


5. Samsung Exec Reportedly Admits Galaxy Gear Smartwatch ‘Lacks Something Special’


When a new product launches, the last thing you want is bad press, whether it be internal or not, and it seems like someone at Samsung missed this memo. According to a report from The Korea Times, a Samsung executive admitted that the company wasn’t happy with the new Galaxy Gear smartwatch. ”We’ve acknowledged that our Gear lacks something special,” said an unnamed Samsung official to the site. “With more investment for user interface and user experience, Samsung devices will be better in terms of customer satisfaction.” Samsung’s new Galaxy Gear smartwatch launches early in October and is seem as a preemptive strike against Apple’s rumored “iWatch.” Galaxy Gear preorders opened just last week.

6. Panasonic Quits Smartphones to Focus On…Feature Phones


Japanese electronics giant, Panasonic, confirms that it plans on stopping development of smartphones for the mass market. This is not new; the company said in July that it wanted to review its smartphone strategy after posting losses due to weak sales of smartphones in Japan; this is the only market where the company had any presence in the smartphone market. Panasonic says that it instead plans on reallocating the resources to manufacturing and selling feature phones (the clam-shell type handsets that came before the smartphone era). Features phones still have a large following in Japan and account for roughly 30% of all mobile phones sold. This figure is, however, shrinking, as time passes.

7. Key dates from Google’s 15-year history

September 27, 1998: is born.
May 9, 2000: The search engine becomes available in 10 new languages
June 26, 2000: The first search engine to index 1 billion web pages is… Google!
April 1, 2004: The beta version of Gmail is launched
February 8, 2005: Google Maps is born.
November 13, 2006: Google purchases YouTube for roughly $1.6 billion.
May 25, 2007: Google Maps Street View is born.
November 5, 2007: Google announces the OS, Android.
September 1, 2008: Google chrome is born.
July 7, 2009: The Google Chrome OS, which is based on Linux, is announced.
January 5, 2010: The “Google phone” is introduced by HTC.
June 15, 2011: Google presents the first Chromebook, equipped with Chrome OS
June 28, 2011: Google+ is born.
June 29, 2011: Google starts testing their cars in Nevada.
April 5, 2012: The first Google Glass prototype is worn.