ChinaWatch: The 'Happy Pad'

Welcome to ChinaWatch, WMB’s digest of news from the country with the world’s second largest economy and our chief rival to global dominance. Our aim is to keep you informed.


Biggest Healthcare Overhaul

As a young Chinese doctor earning 4,000 yuan ($600) a month, Zhang Fei was faced with having to cough up 2,000 yuan for a bill that a patient left unpaid after Zhang removed a tumor from her womb.

Zhang managed to track down the patient after alerting her neighbors and only avoided having to settle the bill when the patient returned to the hospital to sign a promise to pay.

“I'm only a doctor, why do I have to pay for it? I was very, very depressed. I spent many, many days ringing her, trying to track her down and I had to get other villagers to knock on her door,” Zhang told Reuters.


China is overhauling the biggest healthcare system in human history and has made significant changes since 2003: implementing a basic universal medical insurance system and heavily subsidizing a growing list of essential drugs.

In March, it pledged more money to bring more people under the insurance scheme, raise reimbursements and improve services to meet the needs of its 1.34 billion people who are increasingly troubled by costly, chronic, non-communicable illnesses such as heart disease, stroke, diabetes and cancer.

The government also slashed the maximum retail price for more than 1,200 types of antibiotics and circulatory system drugs to cap profits of foreign and domestic drug makers and ward off grumbling over high healthcare costs.

But missing are plans to deal with other entrenched problems in the healthcare system, such as the absence of good hospital management which can often result in health workers being pitted against patients, like the situation Zhang faced.

Zhang and her colleagues often need to confront patients to get payment, or risk forking out for unpaid bills out of their pockets.
“There should be a department that deals with this and post-operation services that have nothing to do with therapy. But in China, doctors do a lot of work that has nothing to do with doctoring,” Zhang says.

The Happy Pad

Lenovo, Motorola and Dell are preparing to launch tablets in China. But can the Happy Pad outsell Apple's iPad?

Chinese PC maker Lenovo, which makes the “LePad,” hopes so. The name translates to “Happy Pad” from Chinese to English, and it is just one of several tablets taking aim at Apple as China's tablet market gets more crowded.

U.S.-based companies Motorola and Dell are also planning to launch tablets in China within the coming months. Motorola says it will release its Xoom tablet before the end of June, while Dell says it will launch its 5-inch Streak tablet in China later this month.

Lenovo launched the LePad tablet at the end of last month. The Android-based tablet is available for purchase online and is gradually appearing in retail outlets.


Apple dominates the tablet market in China, although it has not announced when its second-generation iPad will be available in the country.

The company has a 78 percent share over the market, according to Sun Peilin, an analyst with Beijing-based research firm Analysys International. The remaining 22 percent belongs to Samsung and other tablet producers.

“Apple's advantage is that they have the brand recognition,” Sun says. “When people think about buying a tablet, they automatically think about the iPad.”

In China, tablet sales reached about 600,000 units last year, according to estimates from Analysys. But that number is expected to rise to 4.5 million units this year.

Apple also dominates the tablet market worldwide, with a 73 percent market share, according to research firm IDC.

Analysts say Lenovo's advantage over the competition includes its well-known brand name in China along with its far-reaching distribution network.

Lenovo is currently the top PC seller in China and plans on making its LePad available in 5,000 stores in 400 cities across China this month.

In contrast, Apple has less reach, according to analysts. The company has a total of four Apple stores in Beijing and Shanghai, but also has a Chinese website from which orders can be made as well as from authorized resellers.

ChinaWatch

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Pico Projectors Trend Up

Most people are not even aware of what a pico projector is unless they happen to see one at a trade show. But these small devices, either LED or laser-based technology, are gaining in popularity.

Insight Media , a research, publishing and consulting firm focused on emerging segments of the display industry, notes there are several markets for these new projectors including toys, digital cameras, stand-alone picos, micros for entertainment, and micros for presentation.

There are two major reasons why these markets are not mainstream, at least not yet.

First, if you look at the total number of small LED and laser projectors sold to date (the first “pocket” projector was introduced in 2005), the number is not very large.

Just 6 million units have sold over the six-year period, according to analysts. But forecasts predict another 2 million will be sold in 2011, so things are looking up for this industry. The cost for these devices ranges from under $100 to several hundred dollars.

The second reason why most people have never seen pico or micro projectors in action is their use model.

Forget about publicity photos (for example, using Adobe Photoshop software to doctor real images or create others), projectors have been used to depict everything from bar-room antics and crazy stunts to new clothing styles and the inside of school lockers.

Again, there is a limited audience for these types of uses.

That's Entertainment

Most pico and micro projectors are used for entertainment, mostly video, but also in gaming and still photos. Because of their low output, most pico projectors are used in dim or dark environments.

This includes places such as hotel rooms, college dorms, bedrooms and army barracks, for example. Most of us wouldn’t see them in use.

Yes, there are micro projectors bought and used for presentations, but the younger generation or road warriors probably would use them at night.

They can watch video streamed from a laptop to a micro projector in a hotel. This would be out of sight for most folks.

Another use model for pico and micro projectors spanning several of the market segments is TV replacement systems, not only existing markets but in developing countries.

For about $1,100 or so, the battery powered or solar charged system can bring the entire family out of the dark and into the modern age.

In the mobile display market, pico and micro projectors face formidable competition from other mobile display products. Number One on the list is direct-view LCD or OLED displays.

These displays are typically 3-inch to 4-inch diagonal when embedded in a handset or 7 inches to 10 inches when embedded in a tablet computer. The point is that a pico projector can make a larger display than the embedded one.

By the way, forget some of the industry marketing claims that a pico projector can produce images up to 60 inches. This is only possible in a dark room.

More than likely, you will be viewing a 20-inch to 30-inch image. However, the viewer needs to be more careful about the ambient light with a pico projector.

Recently, 3M demonstrated its MPro-180 pico projector by using video from an iPad. And now Apple’s second-generation iPad has a pico projector option resident in the device.

The Big View

WMB, along with most industry analysts, believes there is strong interest in pico projectors among product developers.

These include manufacturers of components such as micro displays, scanning mirrors, LEDs and lasers. Systems manufacturers are targeting one or more market segments while service providers see long-term value in an emerging industry.

This interest isn’t sparked by the 2011 potential sales of $2 million or so; it’s driven by potential volumes of 10s of millions or possibly even $100 million or more within the near future.

If these volumes are reached, there will be plenty of profits to go around for all those who stuck by pico or micro projectors in the lean years.

TechMan

Google’s 1-Stop Online Access

Google One Pass has the potential to revolutionize the way publishers keep direct relationships with customers and readers access digital content across websites and mobile apps.

Google CEO Eric Schmidt notes the new service lets publishers set their own prices and terms for their digital content.

“Readers who purchase from a One Pass publisher can access their content on tablets, smartphones and websites using a single sign-on with an e-mail and password,’’ Google says.

“The service helps publishers authenticate existing subscribers so that readers don't have to re-subscribe in order to access their content on new devices.”

Google One Pass is available for publishers in the United States, the United Kingdom, Canada, France, Germany, Italy, and Spain.

Google Vs. Apple

Speculation already has begun about how the Google service will compete with Apple's new subscription service, which it has just made available to all publishers of content-based apps on the App Store.

Apple will keep 30% of the revenue from any new subscribers it brings to the publisher via the App Store. Critics in the media industry say the Apple cut is excessive.

Google says it will keep just 10 percent.

“Our intention is to make no money on it,” Schmidt says. “We want the publishers to make all the money.”

The race to claim attract digital newspaper subscribers comes as struggling publishers seek to boost the money they make from readers who use computers, tablets and smartphones. Some newspaper publishers have stepped up paywall efforts.

As Daily Finance notes, Apple has a major critical advantage over Google.

The App Store has tremendous traffic from owners of iPhones and iPads. There are over 160 million devices that run on the Apple iOS system.

Google does not have a comparable and ready customer base because its Android mobile OS is used by hardware companies over which Google has little control. Google's Apps MarketPlace is smaller in both the number of offerings and downloads than the Apple store.

Google's new project may be more favorable financially to publishers, and may have other benefits for consumers, but the search giant's application “ecosystem” may not be powerful enough to support a robust online subscription service. Apple does not have such a problem.

Dead Tree News

The newspaper industry – still reeling from the one-two punch of exploding Internet growth and advertising drops from the Great Recession – may view Google One Pass as a half-hearted attempt to deflect criticism about Google searches linking to “free” online print content without compensating the original source.

“With Google One Pass, publishers can customize how and when they charge for content while experimenting with different models to see what works best for them—offering subscriptions, metered access, ‘freemium’ content or even single articles for sale from their websites or mobile apps,’’ according to the Official Google Blog.

“The service also lets publishers give existing print subscribers free (or discounted) access to digital content. We take care of the rest, including payments technology handled via Google Checkout.’’

The OGB concludes: “Our goal is to provide an open and flexible platform that furthers our commitment to support publishers, journalism and access to quality content.”

In Our View

WMB applauds the one-stop concept behind Google One Pass and sees the service as a viable alternative to Apple – arguably the runaway leader in developing new tech gadgets that capture the public’s imagination and dollars.

Some have even described Apple CEO Steve Jobs as the Thomas Edison of our time because of product innovations including iPod, iTunes, iPhone, and iPad.

Still, we have a nagging concern, as always, with anything that “controls or regulates” the Internet or the way in which consumers interact with it. Perhaps the best measurement of the new service will be whether the public embraces or rejects it.

WMB will be watching as the rivalry between Google One Pass and the App Store unfolds.

Consumers generally benefit from competition because it prompts innovation and pricing strategies out of sheer necessity.

Ken Cocuzzo