By now, millions of Chinese were supposed to be making calls using China's third-generation (3G) standard. Sales were supposed to be ramping up for wireless LANs using WAPI, another domestic standard, and millions were also supposed to be watching movies on EVDs--yep, another homegrown standard. None of this has come to pass. And it doesn't look like much of anything will happen anytime soon.
I've been writing a lot lately about Chinese technical standards, mostly on what hasn't happened. There are so many standards in the mix now that I may soon need a scorecard to keep track of who's doing what and why.
Although I generally agree that China's effort to develop standards and the related intellectual property (IP) is a good idea, I am starting to wonder if the shotgun approach is hitting a point of diminishing returns because of so many simultaneous efforts.
China is undertaking standards in at least 12 application areas: cell phones, Internet Protocol TV, optical disks, operating systems, wireless LANs, digital TV, mobile TV, digital rights management, memory cards, home networking and A/V compression. It is rumored to be developing a standard for WiMax/WiBro, too, and there are probably a few others out there that have yet to pop up on the radar.
At this point, none of the standards has proven a commercial success. China's mobile-phone specification is one of three approved by the International Telecommunication Union, but it's still in the development phase and is the main reason for the delay in the issuance of 3G licenses in China--the government won't roll out services unless it has a hometown favorite in the game.
Some in China see the standards work as the only way for the country to break a cycle of IP dependence on the West that crimps its already pinched margins. Others believe that in many cases it's a waste of resources, given that foreign companies are so dominant. The truth is somewhere in between.
China's approach to standards is a little like venture capital investing. Line up 10 candidates, invest in all of them and hope that a few pull through for big wins. One difference, though, is in the level of due diligence being done for some of the projects: A few of them just aren't remotely realistic.
Moreover, some of these standards are slowing down market developments. In particular, TD-SCDMA is a drag on the 3G cellular market in China, and mobile TV may be the same if China decides to wait on issuing spectrum licenses until its DMB-T/H technology is fully tested by vendors. Numerous delays in the digital terrestrial standard are already imperiling the government's plans to transition from analog to digital. And there will probably be further delays in the implementation side, as has been seen in other markets.
China should look at the bigger picture and focus on a few key areas where it can seriously make a difference in gaining some IP footholds. This will likely be in areas like cellular networks and digital TV terrestrial networks, where China can mandate adoption without running afoul of free-trade rules. When it comes to areas where the market decides, China still has a ways to go, as we are seeing from Chinese standards concerned with optical disks (EVD), wireless LANs (WAPI) and audio/video compression (AVS).
For instance, backers of AVS had hoped to start seeing some deployments in the market, with potential applications ranging from satellite and cable set-top boxes to mobile phones and high-definition optical-disk players. China Netcom and China Telecom are supposed to be testing AVS, but multiple sources reached at both companies either didn't know about the tests or didn't want to say how they are going.
In the meantime, MPEG-4/H.264 are moving ahead with real deployments in some of China's Internet Protocol TV rollouts. It's a frustrating story for some of China's standards drafters, but it will likely be one that continues for some time. That's the game.
I suspect that even though a focused effort might be better at this stage, the country's policy makers are thinking about casting a wider net. That would be unfortunate. What the country needs is quality, not quantity--a few well-placed efforts that can prove its worth as a standards player.
By Mike Clendenin (firstname.lastname@example.org), Taiwan bureau chief for EE Times