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Fiscal crisis to be dazzled by IT style

IT'S really difficult to predict what will happen in the information technology and telecommunications industries in China this year as no one knows when the faltering economy will begin to rebound.

But consumers will sure see more new gadgets and services, such as smarter phones, 3D televisions and 3G services.

Technology will continue to evolve in 2009, even faster in the tougher environment, as companies try to appear very different to their rivals.

Technology advancement is rampant in China, where the long-awaited next-generation mobile licenses have been granted and the Internet population has hit 300 million, making it the world's No. 1.

While many businesses will suffer, the financial crisis will also mean opportunities for some IT firms.

The United States financial crisis has spread worldwide and affected China's economic growth, which dropped to 9.0 percent in the third quarter from 10.6 in the first quarter and 10.1 percent in the second quarter.

China's IT market in 2009 is expected to reach US$71.16 billion, from initial expectations of US$74.63 billion. The expected growth rate is down from 13.5 percent to 9.1 percent, while growth for the telecom services market remains the same, an IT research firm said recently in a note.

Manufacturing is the first sector to be affected by the crisis as many export-oriented small and medium-sized businesses have shut their doors. Even giants like Lenovo Group Ltd and Dell Inc are expected to be under pressure.

Lenovo, China's biggest personal computer maker, announced last week it will cut 2,500 jobs globally in 2009.

"The actions we are taking today are not easy," Bill Amelio, Lenovo's chief executive, said in a statement. "We believe the steps we are taking today are necessary for Lenovo to compete in today's economy."

Besides manufacturing, the IT investment in the domestic construction, finance and wholesale industries will be greatly reduced this year, according to IDC.

The IT outsourcing sector, which used to be the growth engine for the domestic software and IT services market, will face a slowdown as firms, like General Motors and Hewlett-Packard, reduce IT investment.

India-based Satyam's financial scandal will also affect the domestic outsourcing industry, analysts said.

On the other hand, China's economy and IT market will be able to maintain a relatively high growth rate, for several reasons.

Unlike Japan and Europe, China's financial industry is not completely integrated into the global market and has thus been spared the most severe impact of the financial crisis.

There is a large domestic market in China with 300 million Netizens with considerable buying potential.

The Chinese government has launched an investment plan involving over 4 trillion yuan (US$585 million) to cope with the economic challenge.

This investment will account for GDP growth of at least 1 percent in 2009, the National Development and Reform Commission estimates.

There will be an obvious impetus in the IT market as IT investments in government-funded health care, education and energy resources will be boosted, according to IDC.

Telecom restructuring and 3G will provide a powerful momentum for investment and create huge opportunities for equipment manufacturers.

After the 3G licenses were issued last week, three major telecom operators will begin wide-scale network construction in 2009.

The three telecom operators will also invest in the construction of core networks, transmission networks, broadband access networks, operational support and business support systems.

Online applications, such as auction Websites, games and advertising, will grow rapidly in China.

"The tougher environment, the more urgent for enterprises to adopt IT tools," Jack Ma,'s chairman, said.

Switched on for a new year

Mobile Phone

After 3G arrives, phones will become smarter and more Internet-oriented.

3G phones will not be around in large volume this year as 3G services based on the international 3G technologies CDMA2000 (code division multiple access) and WCDMA (wideband CDMA) will not be immediately available.

Phones for the mobile Internet, which feature large screens for Internet browsing, Wi-Fi, built-in Internet applications (like HTC's G1 with Google Maps and iPhone with iTunes), will become more popular.

Mobile widgets will become the major forces shifting China's mobile Internet into the fast lane boasting mobile television, mobile multimedia, mobile positioning, mobile social networking services (SNS) and mobile online gaming.

Design and strong multimedia functions will be vital like 8-mega-pixel cameras, touchscreens and motion-sensing accelerometers.

A battery of mobile operating systems will compete with newcomers like Google's Android and Apple's iPhone system. And Nokia and Microsoft will also strengthen their products Symbian and Windows Mobile. The company which provides the better Internet experience to handset users will win.

Personal Computer

In 2009, PCs in China will become cheaper, lighter and with more capabilities for multimedia and mobility.

The netbook, which features a small screen and basic Internet and word processing functions, will continue to expand in China, especially in the second or third-tier markets. A netbook costs 3,000 to 4,000 yuan (US$585.03).

Telecom carriers are expected to bundle services with netbooks. Overseas, people can subscribe to a carrier's outdoor Internet services for one or two years and get a free netbook.

Mobility is a target for laptop makers and it's better to have super-mobility with plenty of battery life but fewer functions.

Dell recently launched its ultra-thin laptop Adamo to join the ultra-light market battle between Lenovo (Thinkpad X300) and the Apple (MacBook Air).

Qualcomm launched the dual-3G Gobi chip for laptop makers recently, which allows laptop users to automatically search for the fastest available 3G networks to access the Internet.

AMD's chipset combined CPU and graphic chip and the popularity of Blu-ray will fuel the demand for high-definition laptops in China.


3D television will be the ultimate goal but at this stage it's just a prototype.

At the world's biggest electronics exhibition CES, TV giants pushed the idea of three-dimensional viewing as a reality.

LG, Sony and Panasonic are involved and they have shown the product and related technologies.

A 3D TV is already on display at Philips China's research center in Shanghai.

TVs with Internet connections are growing in importance.

A couple of companies have displayed TVs with wireless inputs. There's a separate box that connects the wireless to the TV, and you just plug your sources into the box.

In 2009, the standard is WirelessHD. Inputs are connected to the TV via a 60GHz signal, capable of transmitting full bandwidth 1080p (HD) at a distance of up to 10 meters. The transmission is without loss and is sent uncompressed.



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