Companies spruce up R&D capabilities, bullish on long-term earnings prospects
An increasing number of Chinese smartphone vendors are marching into the chip sector, after realizing the importance of in-house research and development capabilities for the semiconductor sector.
Vivo, a major smartphone vendor, for instance, joined hands with South Korean tech giant Samsung to unveil a 5G chip in November, marking the former's latest push to showcase its increasing emphasis on enhanced research and development capabilities.
The Exynos 980 chip, which was jointly developed by the two companies, will debut on Vivo's X30 smartphone later this year.
Zhou Wei, vice-president of Vivo, said the two sides have cooperated closely with each other to improve the efficiency of product development. As a result, the X30 model, powered by Exynos 980, can hit the market two to three months ahead of schedule.
The Exynos 980 chip supports both non-standalone (NSA) and stand-alone (SA) networking modes, making it the second dual-mode 5G chip after Huawei's Kirin 990 5G. NSA and SA are two ways of constructing a 5G network, with the former still relying on existing 4G infrastructure for some functions.
Currently, most 5G smartphones unveiled in China only support NSA mode. But China will kick off the large-scale construction of an SA 5G network soon, so that 5G phones will have to support both modes in the future.
Vivo said more than 500 of its research and development engineers have partnered with Samsung in the past 10 months to jointly develop the chip. It has shared more than 400 features and functions it had accumulated with Samsung to complement the latter's platform.
Exynos 980 has an integrated 5G modem, which can enable a peak downloading speed of 2.55 Gbps in sub-6 GHz spectrum. It also can greatly improve energy efficiency.
Smartphone vendor Xiaomi Corp is also intensifying its inputs in the sector.
In 2014, Xiaomi founder Lei Jun termed the chip segment the "crown of the smartphone sector". Three years on, he has his own jewel in that crown - the Surge 1, Xiaomi's first in-house chip.
The technology tycoon has fond and vivid memories of a momentous instant that signifies Xiaomi's entry into the chip sector.
He recalls a night in September 2015 when, at 1:40 am, in a trial, the Surge 1 enabled the first call between a group of engineers and Lei. "My heart was surging with excitement at that moment. That's how the chipset got its name."
James Yan, research director at Counterpoint Technology Market Research, says that although the Surge 1 is still at the entry level, Xiaomi's attempts to make inroads into the competitive industry highlight its determination to differentiate its products from a crowd of rivals and to seek growth via innovation.
The pursuit of innovation was what drove the Beijing-based tech major in 2014. It coasted on the success of its online-only sales model to establish a chip unit, Beijing Songguo Electronics.
It had figured out that reliable access to chips was going to be the key to success in the fiercely competitive smartphone market.
Xiaomi has also invested into several chip design companies in China, partly in the hope of learning more from these players to better produce its own chips.
Another tech major Oppo is also jumping onto the bandwagon. The company is recruiting chip professionals to beef up its smartphone design department and it is working on a coprocessor, a processor used to supplement the functions of the primary processor.
Such strong motives to double on the chip sector also came after the US government banned Huawei Technologies Co from accessing crucial US semiconductor components. The incident triggered worries that some US technologies on which Chinese companies are heavily reliant will no longer be accessible and alternative plans need to be generated.
But developing chips is a high-tech and cash-intensive business. When Xiaomi was considering chip business, several experts had told Lei that it is a risky business. R&D of chips alone would require 1 billion yuan ($142 million) and making a success of it would require at least $1 billion.
"It is a promising sign that more players want to overcome the obstacles and be a success at chipmaking, but it remains to be seen who could really make it in the end," said Xiang Ligang, director-general of the telecom industry association Information Consumption Alliance.
For many people, the hardest thing about winter is getting out of a warm bed on a cold morning. However, smart technology is helping to make life a little easier.
Xiaoai, a smart voice recognition mini robot, allows users to take control of their lives without having to get up.
From the comfort of their beds, users can tell the device to turn on the lights and play some music. Using their smartphones, they can even instruct a smart cooker in the kitchen to start making breakfast.
Thanks to these smart home products, life is becoming easier, and the internet of things has been a major driver of these achievements.
Only a few years ago, IoT was just a concept. Since the beginning of this year, however, it has become a mainstream technology that is being commercialized.
IoT has not only found its way into smart homes. It is also being applied in a wide range of industries including manufacturing, agriculture and healthcare.
For example, at an intelligent warehouse of menswear major HLA, employees no longer need to search for required garments in a mountain of clothes. The 5G-enabled IoT dispatches smart robots to identify and pick up the required e-tagged garments.
Such innovative applications are also simplifying work at vineyards. Farmers no longer need to pick grapes. Instead, using a smartphone, they can operate remote-controlled unmanned aerial vehicles (or drones) to do this for them.
The industrial internet, in particular, has witnessed rapid development in the past few years, and assembly and production lines have started to operate using IoT, greatly improving production efficiency.
"Accelerated steps on the industrial internet are of significance to China's advanced manufacturing amid fierce competition from abroad," said Yang Chunli, a researcher
The Ministry of Industry and Information Technology estimated that there are more than 50 industrial internet platforms with regional or sector-wide influence in the country. Also, an increasing number of applications are being commercialized with each platform owning 1,500 apps on average.
"China is opening a new window on the development of large-scale IoT and also creating an opportune period for related parties to map out and gain a lead in the field," said Wang Zhijun, vice-minister of industry and information technology.
Charlie Dai, a principal analyst at Forrester, a business strategy and economic consultancy, said favorable government policies and increasingly fierce market competition are driving the evolution of IoT in the country.
"The Chinese government has unveiled a string of strategic IoT initiatives for the nation's digital transformation. IoT was also included in its 13th Five-Year Plan (2016-20), which will steer China's economic and social development between 2016 and 2020," Dai said.
Such efforts will put China in the driver's seat with respect to the adoption and use of IoT technology, he said. By 2022, China is expected to spend $300 billion annually on IoT and surpass the United States as the world's largest IoT market, said a report from market consultancy IDC.
A report from the China Economic Information Service said the country's IoT industry reached a market value of 1.2 trillion yuan ($168 billion) last year. And income from services offered by the IoT industry was up 72.9 percent year-on-year.
Huawei Technologies secured an important vote of confidence in its chip research and development capabilities on Friday, with its self-developed artificial intelligence computing platform applied at a key research facility.
Atlas 900 is dubbed by Huawei as the world's fastest AI training cluster and its application in Peng Cheng Lab, Guangdong province, demonstrates the strides the company has made in AI chip R&D.
The move is also part of broader efforts by Chinese companies to reduce reliance on crucial United States' technologies.
Huawei and PCL on Friday announced the launch of an upgraded AI computing system — CloudBrain — an underlying architecture to support a wide range of applications such as smart healthcare, smart transportation and urban management.
Huawei's Atlas 900 can significantly boost CloudBrain's computing power.
"In the first stage, CloudBrain's computing ability will increase five times and it will be enhanced by another ten times next year," said Gao Wen, director of PCL.
Gao believes it will become the world's largest AI computing cluster by then.
CloudBrain has provided services for more than 300 domestic and international scientific research experts, whose experiments require strong computing abilities, Gao added.
To better develop AI solutions for more sectors, Huawei and PCL also inked agreements on Friday with four organizations including the Shenzhen Municipal Health Commission and the city's Longgang district government.
Hou Jinlong, president of Cloud & AI Products & Services at Huawei, said, "We can provide an alternative computing system in the future other than current dominant x86-based processors."
The processors are developed by US tech giant Intel Corp which currently dominates the global market for server chips.
"As AI chips sit in the core of computing technology stacks, this achievement provides another powerful option for enterprise customers to leverage AI computing capabilities powered by Huawei," said Charlie Dai, principal analyst at Forrester, a business strategy and economic consultancy.
Huawei stressed that CloudBrain's hardware and software platform is open to all users while the company itself focuses on processors. In addition, the platform is cloud-based so it is open to global developers.
The platform is supported by Huawei's Ascend AI processors and the Kunpeng 920, Huawei's central processing unit. "Besides the platform, our AI computing processors have powered many applications in many industries, such as finance, smart city, electricity and transportation," Hou added.
Dai said it also effectively helps Huawei build its digital ecosystem around its AI chip hardware portfolio, which is critical to the localization strategy for customers in China to ensure long-term business continuity in the increasingly dynamic economic environment.
Many global chip providers are eyeing the booming AI computing market as market research company Gartner forecasts it will be worth more than $2 trillion by 2023.
Huawei working with telecom carriers for tech, industrial solutions to face the challenge of insufficient sites
As the world is at the tipping point for large-scale 5G network rollout, the global telecom industry faces a common challenge: how to quickly and efficiently find enough sites for 5G base stations.
It is a grave challenge, for 5G technologies use a higher frequency than 4G, and each 5G base station covers a smaller area than its 4G counterpart. Moreover, 5G will see wider industrial use, further increasing the demand for network coverage. As a result, far more base stations, with some estimating as much as three times base stations, are needed in the 5G era than in the 4G era.
To overcome the difficulty, Huawei Technologies Co, the world's largest telecom equipment maker, is working with telecom carriers and tower operators including China Tower Corp on innovative technological and industrial solutions.
"The challenge of acquiring 5G sites and the growing 5G network density represent a key contradiction that affects large-scale 5G deployment," said Qiu Zheng, vice-president of site domain at Huawei's wireless product line.
Also, contrary to public perception that telecom equipment accounts for the majority cost of base stations, Qiu said every $100 that telecom operators invest in base station construction, $60 is spent on site acquisition, civil work, power supply, and other auxiliaries.
The estimated proportion is even higher in the research of the global telecom industry association GSMA Analytics. According to its study, 80 percent of the total construction cost of base stations lie in site acquisition, civil work, power supply, and other auxiliaries.
With this in mind, Huawei has launched the Open Site initiative to convert utility poles into telecom poles, helping operators with massive 5G site acquisitions and optimized site costs.
Under the initiative, Huawei has collaborated with multiple partners to jointly provide 5G sites quickly and efficiently. Major achievements have been made in promoting site approval simplification, as well as developing open 5G pole site standards, which are essential for preparing public resources for long-term 5G development.
In Shanghai, for instance, Huawei has partnered with the municipal government to draft standards on how to better facilitate large-scale pole site deployment with reduced costs.
Moreover, Shanghai has rolled out plans to provide 30,000 5G sites by the end of 2020 simply by building or turning utility poles into telecom poles along its 500-kilometer roads. That is equivalent to 75 percent of the current total number of 5G sites in Shanghai.
"If without the plan, it takes about 12 months for telecom tower operators in China to find proper sites by going through the sophisticated processes of mapping sites and negotiating with property management companies for good rentals and stable power supply," Qiu said, adding that in the United Kingdom, the process could even take as long as 36 months.
But with the Shanghai plan, telecom base stations can be directly equipped to the 30,000 5G-ready poles, greatly saving time and boosting efficiency, the executive said.
Tong Jilu, chairman of China Tower Corp, which manages most of China's telecom towers, said the company has already prepared more than 10 million towers and poles for 5G by leveraging the existing resources of railway, real estate, power grid, transportation and other sectors.
"About 80 percent of micro 5G base stations nationwide will be hung on existing electric poles, light poles and other forms of towers, which will dramatically lower the costs and quicken the rollout of 5G in China," Tong said.
Foreign countries including Japan, the UK and South Korea are also jumping on to the bandwagon. In Germany, for instance, telecom operators have partnered with seven departments to draft and publish the guidelines in August on how to better open public resources including traffic lights, bus stations and road signs to the telecom sector for potential 5G sites.
Multinationals including Signify, formerly Philips Lighting, Schreder and JCDecaux Group, the largest independent outdoor advertising agency in Europe, are also responding positively to its initiative to address the challenge of sites acquisition, Huawei said.
On top of making it easier to acquire 5G sites, Huawei also has innovated a slate of simplified solutions to lower costs for telecom carriers, including reducing trouble involved in climbing poles to install base stations and offering diversified services and products to help them map network construction routes for different scenarios.
When it comes to the challenge that 5G base stations are extremely power-hungry, the Shenzhen-based company also unveiled a solution called 5G Power. By integrating artificial intelligence into the service, Huawei aims to help telecom operators cut electricity bills and offer stable power supply in a fast and efficient manner.
Organizations urged to focus more on data protection and security controls
You turn on your Taobao app and a list of shopping items comes up.
A lipstick of your preferred color. A dress that matches your newly-purchased top. The next book to read based on your browsing history.
While people enjoy the perks of smart recommendations powered by artificial intelligence, those mind-reading algorithms, if not properly handled, could be manipulated with malware and create new cybersecurity threats.
Diana Kelley, the cybersecurity field chief technology officer at Microsoft Corp, said hackers will increasingly use AI to make malware more destructive. This will emerge as among the top five trends for the global cybersecurity landscape in 2020.
"The rise of AI capabilities provides new opportunities for attackers to create malware that hides from detection while hunting down targets," she said. "It's already in use but often goes un-detected."
According to the 2019 Poneman Institute report, the global average cost of a data breach is $3.92 million. Unfortunately, it normally takes organizations an average of 206 days to identify a data breach, and another 73 days to contain it.
Technology advancement has always been a double-edged sword. AI and cloud computing are revolutionizing the customer experience but they pose new threats to cybersecurity.
Around 55 percent of millennial consumers aged 23 to 38 surveyed by consultancy IDC said they like some websites and mobile apps to be personalized to fit their interests.
As a result, 40 percent of the data collected by companies throughout the customer journey will be used to create a better product and a bespoke experience.
As the internet of things and cloud greatly expand the number of devices and the amount of data they gather, the area of attack by hackers widens just as sharply as well.
"It gives us more signals we could also take in and consume for security purposes too," Kelley said. "And because of the cloud, we can see attacks around the globe, and respond around the globe very quickly."
She said an overarching approach for companies creating customization while protecting customer privacy is to collect only what is needed and be transparent.
"Companies should be clear and transparent with your customers about what you are collecting, how you are using and protecting that data, and ensure that you got consent from them so they have the knowledge that their data are being collected," she explained.
Cathy Huang, associate research director of Services and Security at IDC, agreed. She said: "If your company doesn't have a strong policy, that's going to be a potential problem."
Organizations must build a program that incorporates defense in depth and implements fundamental security controls, Kelley said.
"We must consider how operations will continue after a catastrophic cyberattack and build systems that can both withstand the attack and be instantaneously resilient," she stated.
Microsoft invests over $1 billion annually on cybersecurity research and development. Kelley called for nurturing cybersecurity talents to include people in different trades like law and communications.