WCA March 2010

“In contrast, GM is likely to be more relaxed about Beijing Automotive’s acquisition of what it must see as antique technology.” For the Reuters observers, these moves on the part of the Chinese car makers – buyers of last resort for the American producers – underscore the changing dynamics of the global auto industry. They wrote, “It will take time for the Chinese to match the competitive threat posed by the Koreans and Japanese in autos. But that moment is drawing nearer.” And meanwhile? “Those deals, while small, will make a substantial contribution to raising China’s game in this sector.” Its ad growth slowing, Google bets on its Android handset to go the distance with iPhone, BlackBerry According to analysts canvassed by Bloomberg News, the development by Google Inc of a mobile phone utilising the company’s own Android operating system represents a change of focus for the leading Internet search engine. The Android handset – known as the Nexus One, to be marketed by Google to the consumer – is a direct challenge in the smart-phone market to the immensely popular iPhone, from Apple Inc, and the BlackBerry, from Canada’s Research In Motion Ltd (“Google Phone Development Takes Aim at iPhone, Others,” 15 th December) Bloomberg observed that Google (Mountain View, California) is focusing on the mobile market as growth slows in its search-advertising business, centred on desktop computers. Phone makers including Motorola Inc (Schaumburg, Illinois) and HTC Corp (Taoyuan City, Taiwan) already offer handsets that run on the Android operating system. HTC is the maker of the Google Android phone. Like the iPhone, Google’s device has a touch screen, and users can direct their Web searches by means of voice commands. Google first acknowledged that it was working on the new phone in early December, when it also disclosed that Android handsets had been distributed to company employees for testing. While no carrier had been announced for the device by the New Year, the Wall Street Journal reported that it might be available to consumers very soon. Ben Schachter, an analyst with San Francisco-based Broadpoint AmTech Inc, told Bloomberg that Google’s launch of its own device, as well as ensuring the company’s position at the hardware-software interface, was a necessary commercial move. “If all of a sudden everyone is getting on the Internet via a mobile device, Google needs to make sure it has an influence on that,” Mr Schachter said. “They need to make sure they have influence on how the mobile Web will develop.” Telecom

Patrons of Korean Airlines can expect luxury seating, premium entertainment in all cabins, and a selection of organic food including beef and chicken from the company’s island ranch. Hong Kong-based Cathay Pacific is featuring new cabins on long-haul flights, a choice from at least 21 movies, and a new first- and business-class lounge in Kuala Lumpur. Singapore Airlines has also improved its in-flight entertainment systems and is installing new seats in the premium cabins on some aircraft. While these inducements are largely aimed at travellers with deep pockets, lower-fare Asian airlines are also solicitous of the comfort and convenience of their ticket buyers. Travellers with AirAsia must pay for meals and drinks – but the line’s new planes will boast leather seats. For members of its frequent-flier programme, the Australian carrier Qantas is working to cut check-in times in half on domestic flights. The list goes on. But a columnist who recently flew from New York to Arizona and back, in Spartan conditions, prefers to stop here. Last year, which marked the emergence of China as the world’s largest auto market, was not a good one for the auto industry of the US, now in second place. At the New Year, a flurry of reports centring on General Motors and Ford seemed to suggest an enlivened American industry. But how significant, really, are the on-again/off-again transactions that continue to draw so much attention? The Reuters analysts Alexander Smith (London-based) ❖ and Wei Gu (in Hong Kong) see benefits disproportionate to the size of the deals – for China, not the United States. They note that Beijing Automotive’s $200 million payment for the technology of GM’s Saab unit could save the Chinese car group five years of development and help generate billions of dollars in incremental revenue. Mr Smith and Mrs Gu wrote, “For the first time, a Chinese auto maker is getting both full access to Western technology and support from the vendor to help integrate the technology into Beijing Automotive’s cars.” (breakingviews.com, 24 th December). In this view, the technology itself may be dated – it belonged to Saab before that company’s acquisition by GM – and doesn’t overlap with that of other GM cars. But it is still more advanced than what Beijing Automotive commands. The estimated cost of licensing similar technology goes as high as $88 million a year. Presuming it goes through, Geely’s $2 billion bet ❖ on Volvo, being sold by Ford Motor, seems “more ambitious,” according to the Reuters columnists. They pointed out that Volvo has a reasonably strong brand, and a reputation for safety. On the other hand: “[Volvo] lost $1.5 billion in 2008, and its technology is shared with other Ford models. That puts Geely in a tricky relationship with Ford. Automotive

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Wire & Cable ASIA – March/April 2010