China bans use of Microsoft's Windows 8 on government computers

A Microsoft Surface tablet is seen during the launch of Microsoft Windows 8 operating system in Hong Kong October 26, 2012.

Credit: Reuters/Bobby Yip

(Reuters) - China has banned government use of Windows 8, Microsoft Corp's latest operating system, a blow to a U.S. technology company that has long struggled with sales in the country.
 
The Central Government Procurement Center issued the ban on installing Windows 8 on Chinese government computers as part of a notice on the use of energy-saving products, posted on its website last week.
 
The official Xinhua news agency said the ban was to ensure computer security after Microsoft ended support for its Windows XP operating system, which was widely used in China.
 
"We were surprised to learn about the reference to Windows 8 in this notice," the company said in a statement. "Microsoft has been working proactively with the Central Government Procurement Center and other government agencies through the evaluation process to ensure that our products and services meet all government procurement requirements."
 
"We have been and will continue to provide Windows 7 to government customers. At the same time we are working on the Window 8 evaluation with relevant government agencies," Microsoft said.
 
Neither the government nor Xinhua elaborated on how the ban supported the use of energy-saving products or how it ensured security.
 
China has long been a troublesome market for Microsoft. Former CEO Steve Ballmer reportedly told employees in 2011 that, because of piracy, Microsoft earned less revenue in China than in the Netherlands even though computer sales matched those of the United States.
 
Last month, Microsoft ended support for the 13-year-old Windows XP to encourage the adoption of newer, more secure versions of Windows. This has potentially left XP users vulnerable to viruses and hacking.
 
"China's decision to ban Windows 8 from public procurement hampers Microsoft's push of the OS to replace XP, which makes up 50 percent of China's desktop market," said data firm Canalys.
 
~ Paul Carsten and Beijing Newsroom        

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HP to Stock Ubuntu Laptops in 1,500 China Stores

HP are the latest hardware vendor to increase the number of their China stores selling Ubuntu laptops.
 
The PC manufacturer began stocking two new Ubuntu laptops in over 1,500 of its Chinese stores as of September 16th.

The news comes nearly 2 weeks after Dell also expanded the number of its retail outlets carrying Ubuntu devices.
 

Consumers unfamiliar with Ubuntu will be given ’information packs and marketing materials to help with their purchase,’ say Canonical of the deal, adding that ‘over 4,000 in-store sales staff have also been trained to use and demo Ubuntu to help explain the benefits,”

 

Two laptops will be carried in HP stores:

• HP Pavilion G14
• HP Pavilion G15

Both are relatively similar in specifications, offering Intel i3 to i5 processors, 2GB of RAM and between 500GB to 1TB of HDD storage.

The laptops, which went on sale September 16th, start at ¥3,799 (CHY)
 
It seems hardware companies are betting big on Ubuntu in China despite industry experts expecting a sharper drop in PC sales in China than other markets. 
 
~ Joey-Elijah Sneddon 

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iPhone 5c not cheap enough for emerging APAC markets

Summary: Compared to its rivals' offerings, the new iPhone targeting emerging markets is a "disappointment" for consumers in developing markets such as China and India, and Apple is losing its "wow factor".
 
The iPhone 5c is not cheap enough to attract consumers in emerging Asia-Pacific markets, especially with the lack of reliable 3G and 4G networks in the region, while the incremental improvements in the iPhone 5s do not appeal to customers of the developed markets.
 
According to Phil Harpur, senior research manager of Frost & Sullivan's ICT practice, the iPhone 5c is a "disappointment" for emerging markets in the region such as China and India. These markets are price-sensitive and look for cheaper options, and this does not fit with Apple's brand, Harpur said, speaking to ZDNet Asia in an interview following the iPhone launch on Wednesday.

Apple unveiled the iPhone 5s, its lower end iPhone 5c, as well as the latest version of its mobile platform iOS7. With a 2-year telco service contract, the iPhone 5s 16GB model costs US$199, while the 32GB is priced at US$299 (32GB), and the 64GB is US$399. The iPhone 5c 16GB model costs US$99, while the 32GB model is priced at US$199. Within Asia, the new iPhone 5s will be available in Japan, China, Hong Kong, and Singapore from September 20, 2013.
 
Harpur pointed out that the lack of reliable 3G and 4G networks in emerging Asian markets also made it less compelling for consumers to pay a premium price for smartphones.

It is becoming difficult for Apple to have any real competitive advantages, he said, adding that rivals such as Samsung, HTC, and LG all offer smartphone models at lower pricepoints and which are taking off in emerging Asia-Pacific countries.

 

In markets that are less price-sensitive such as Singapore, Australia, and New Zealand, while the price tag does not make the latest iPhones less attractive, the new smartphone models do not have anything new to offer the market, Harpur pointed out.

 

Even though the iPhone 5c is slightly more price-competitive, there is a lack of innovation so it is "equally disappointing" to developed markets in the region, he said.

 

Singapore-based engineer Shawn Lee, too, told ZDNet Asia the incremental changes in iPhone 5S were expected, apart from the fingerprint sensor and large-camera sensor, and hopes iPhone 6 will come with more major changes.

 

"Apple is already pretty far down the path of incremental improvements. They seem to be losing the innovativeness and the 'wow' factor that was key to their rise," Lee said.

 

"There's no denying Apple takes the cake in industrial and product design, but I'm an advocate of change and the lack of change in Apple's design is a turn-off for me," said the engineer, who is a Samsung smartphone user. "The iPhone 5s looks good but boring after being in the market for so long. And even though the iPhone 5c adds color, it sticks to the same design language." 

Higher security could offer enterprise potential

However, the iPhone 5s offers increased security which can offer enterprise potential, observed Carolina Milanesi, Gartner's research vice president of consumer technologies and markets, referring to the new biometric function as an example.

Jan Dawson, chief telecoms analyst of devices and platforms at Ovum, added that the new fingerprint scanner should make the device more appealing as it marked the first time a big-selling device offers such a feature.

 

However, overall, there are no other features that make the phone better or more attractive than its predecessor the iPhone 5, especially when BYOD and the use of high-end devices already have been generally accepted by most organizations, Harpur pointed out. 

Consumers unimpressed, unwilling to switch

Consumers with Android devices and older generations of the iPhone told ZDNet Asia they had no plans to switch over to the iPhone 5s or 5c.

 

Lin Surong, who currently owns a HTC phone, said while the iPhone does not become laggy after prolong use, it still has features that "irk [her] as a consumer" such as the non-expandable storage and built-in internal battery. And she is not impressed by the fingerprint sensor, which she described as "dodgy" since such features often do not work properly on laptops that offer them.

 

Lee added he would not switch over to iOS as he liked the customization and open source nature of Android.

 

Peace Chiu, an iPhone 5 user, too noted that while Apple made an effort to make iPhone 5s more visually appealing and added features such as the fingerprint scanner, she would not be considering an upgrade. "I don't think it's enough to convince me to switch to iPhone 5s since I find my current phone adequate. The switching process tends to be quite troublesome as well," Chiu said.

 

Joey Chapman, another iPhone 4 user, added the changes to iPhone 5s and 5c were insignificant and her current phone still works well.

 

"It [also] looks like a phone for kids because of the stupid colors," Chapman said.

~ Ellyne Phneah

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Software developer outsources his job to China, makes good money goofing off all day

In this economy you'd think there aren't many six-figure jobs that let you wander aimlessly throughout the web all day between cat videos and catching up with social networks. And you'd be right. But one software developer in his 40s was living the dream nonetheless thanks to the magic of outsourcing.

A Verizon Business report recently detailed one the case of an employee at a U.S. based infrastructure company who was outsourcing his entire job to China for a fifth of his salary. The man in question, referred to as Bob, had gone as far as physically shipping his RSA security token to China so that the third-party contractor could go through the two-factor authentication and log-in under his credentials during the workday.

But eventually the scheme was discovered when Verizon received a request from the unnamed company asking for help in understanding anomalous activity it was witnessing in its VPN logs.

Upon seeing an open and active connection from Shenyang, China, the companies initially suspected some kind of unknown zero-day malware had been able to infiltrate the network. However, further investigation  proved otherwise, Bob had simply outsourced his own job to a Chinese consulting firm.

A look at his browsing history revealed what his typical work day consisted of surfing Reddit for a couple of hours, having lunch, browsing social networks, then emailing his end of day update to management. Evidence even suggested he had the same scam going across multiple companies in the area.

Amusingly, it seems that Bob at least chose his developers carefully. Performance reviews cited his clean, well-written code, and even regarded him as the best developer in the building.

~ Jose Vilches

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Those sexy Samsungs: Why iPhones are no longer cool in China

After a long delay, China finally approved the domestic launch of the iPhone 5. Apple shareholders would expect this to be a major event, but signs are it won’t be.

According to technology research house Gartner, Apple’s share of the mainland Chinese smartphone market slumped to below 7% in the third quarter of this year. That was a big drop, down from 12% in the second quarter.

Things used to be so different. Less than two years ago, wealthy Chinese consumers loved Apple. But they are a fickle bunch, always looking for the latest cool brand to add to their collection. That used to be the sweet spot the iPhone inhabited. Now, Samsung sits there. And at the lower end, consumers are too price conscious for iPhones.

As a young woman posted on microblogging website Sina Weibo: “I wish I could have an iPhone 5 for my birthday, but my parents saved for months just to get me an iPod.”

While there are a growing number of middle-class Chinese, they are nowhere near as rich as middle-class Westerners. There’s no word yet on what the iPhone 5 will retail for in China but consider that the retail price for an iPhone 4S started at around $780 at today’s exchange rates. Meanwhile, Chinese internet firms including Baidu, Alibaba Group and Shanda have all launched smartphones this year costing under 1,000 yuan (US$160)

Apple now ranks sixth in China’s smartphone league, down from third place in the second quarter, according to Gartner. Samsung has been first for the last six months. Chinese manufacturer Lenovo, which sells cheaper products than Apple, is second. Sandy Shen, a Shanghai-based Gartner analyst, told Quartz she forecasts Lenovo will take the first spot by the end of 2013.

Apple may have lost market share because the iPhone 5 launch was delayed in China. But Shen thinks waiting consumers are actually few.

Apple’s real problems are market saturation, consumers not believing the iPhone 5 is much better than the 4S and high-end consumers being more attracted to what they perceive as Samsung’s superior hardware, Shen says.

The majority of people who should have an iPhone have already got one. And in terms of improvement between the 4S and the 5, its not so big. So people have been kind of disappointed. They are either happy enough with the iPhone 4 or the 4S, or looking for another brand.

On the shift to Samsung, Shen adds:

I’ve been observing high-end consumers who have been using iPhone for the last two to three years now looking to switch to Samsung products. These people are not price sensitive. They are always looking for the latest flagship product to add to their technology collection. They have a laptop, an iPad, an iPhone, and now they are going for the Samsung Galaxy S3 or the Galaxy Note.

Samsung probably has better hardware, Shen continues.

In terms of design and hardware specs,  the Samsung products are seen more sexy than iPhones. The Galaxy Note screen is bigger, for example. The S3 has a better display.

Research firm IHS has said the same thing about the S3′s superior display, though Apple enthusiasts dispute this.

Paul French, Mintel’s chief China market strategist, has a different take on why iPhones are becoming less popular with China’s brand-conscious wealthy. He says it has less to do with technical features, which he believes a lot of Chinese consumers do not show interest in, and more to do with being fickle.

Apple just isn’t really that cool anymore. Teenagers aren’t too interested in it. When I see people in Apple stores here, they tend to be late 20s and early 30s.

He adds:

Most Chinese people won’t be that interested in getting the new iPhone 5 because it has better this or that. I don’t think most Chinese people use their iPhones for the apps or the technology. Before, it was all just ‘look, I got an iPhone’, which people then just used for phoning and texting. I ask people what apps they have, and often they don’t have any.

What’s really popular across Asia right now, including in China, are the big phone-small tablet hybrids. Like the Galaxy Note but cheaper versions too. Teenagers especially are mad about these.

That is a source of hope for Apple’s iPad mini, then. But there are also small, cheap tablets on the Chinese market. A $99 dollar Chinese clone of the iPad mini, called the Goopad Mini, surfaced in China late last month, just days after Apple announced its latest innovation.

In China, as in most emerging markets, being neither cool nor cheap is a big problem. There isn’t much of a middle class or a middle ground.

Apple’s business in the country is still huge, representing 15% of its sales. In its last full year results,
Apple reported it made a whopping $23.8 billion in China, a 79% increase from the $13.3 billion earned in 2011. But those impressive results masked the slowing quarterly trend that Gartner’s data has also picked up. Apple made $5.7 billion in China in its fourth quarter, the three months to September 29, which was a 28% drop from the $7.9 billion it made in the second quarter.

And while crowds of Chinese shoppers besieged Apple’s flagship Beijing store on the day the iPhone 4S was launched there—with some rioting and throwing eggs because the store opening was delayed—these may not have been eager consumers. Instead, they might have been what the Chinese media call “scalpers.” These are speculators who buy potentially scarce goods in bulk in the hope of reselling them at a premium later on.

French argues:

That’ll be because maybe about four years ago some people made good money buying up all the iPhones on day one and selling them for more than the retail price. In China, where everyone wants to make a fast buck, these ideas get around.

The question remains whether they’ll find buyers this time..

~ Naomi Rovnick

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