Out of the Factory
Asia’s place in the global high-tech industry has broadened and become more sophisticated, a shift from its decades-long role as a cheaper builder of gadgets and software than North America and Europe. U.S. companies such as Apple Inc., Google Inc., Amazon.com Inc., Microsoft Corp. and Facebook Inc. are driving the tectonic change from personal computers to mobile ones, chiefly in the shape of smartphones and tablets. But Asian companies are in the forefront of innovation, designing and building the devices and many of their key components, from chips to screens. Companies in China, a country best known for screwing together gadgets in vast factories, are now leading industry niches such as telecom-networking equipment.
Meanwhile, from Japan to India, the software, entertainment and information being consumed on these devices—from search engines to online retailers to media programming—is coming from local firms rather than the big names of the U.S. or Europe. In South Korea, for instance, NHN Corp.’s Naver search engine accounts for more than 60% of all Web searching. This fundamental change in the importance of Asia’s technology industry was clear from the opening of AsiaD: All Things Digital, a Wall Street Journal executive conference in Hong Kong last week. The event marked the first time that the conference, an annual event for nearly a decade in the U.S., was held elsewhere. AsiaD began with Andy Rubin, chief of Google’s Android product group, describing the company’s latest smartphone software, which was co-developed with Samsung Electronics Co., the South Korea-based firm that is the world’s biggest seller of Android-based phones.
As Mr. Rubin described the cooperation between the two companies to conference host Walt Mossberg, The Wall Street Journal’s Personal Technology columnist, Mr. Mossberg responded, “There are synergies between Asian skills and American skills.” Indeed, amid news that Samsung surpassed Apple in third-quarter smartphone sales, a Samsung executive, Won-Pyo Hong, made the trans-Pacific connection clear. “Our relationship with Google was key,” Mr. Hong said.
That Samsung surpassed Apple in third quarter smartphone sales indicates that there are synergies between Asian skills and American skills. No longer content to just making things, Asia’s tech firms are challenging the established order through innovation and design.
Advances in technology are creating an environment for change in Asia in sometimes surprising ways. Much of the shift in Asia’s tech scene has been driven by the rising education level in Asia and lower costs to start a tech business. As the shift took shape over the past five years or so, many Asian tech companies grew rich simply by mimicking what they saw happening in the West.