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Tech giants scramble for lead on 'Internet of Things'
by Staff Writers
Washington (AFP) June 08, 2014


Acer boss says 'no regrets' as he prepares to retire - again
Taipei (AFP) June 06, 2014 - It's deja vu for Acer's founder Stan Shih as he prepares to step down again later this month -- he retired 10 years ago, but returned to take back the reins of the struggling Taiwanese personal computer maker.

Since his comeback as chairman and interim president late last year -- which he always billed as a temporary measure -- the company has gone through a painful restructuring, after two top executives quit over the firm's poor performance.

But with Acer swinging back to profit in the first quarter of this year, following three consecutive losses, 69-year-old Shih says he is looking forward, not back.

"I don't like to waste my mind on regret, I don't have time," he told AFP in an interview at Acer headquarters in Taipei, where industry leaders from all over the world are gathered for Computex, Asia's largest tech trade show.

"You have to always look ahead, always be positive. It's your choice, your destiny. You have to enjoy life."

Shih founded Acer in 1976 and built it into the world's second-largest PC maker in its heyday, and one of the best known Taiwanese brands internationally, before retiring in 2004.

But its fortunes have worsened in recent years as sales have been hit by competition from Apple and other rivals, as well as shrinking demand for PCs.

Ahead of Computex, Acer launched its new Build Your Own Cloud (BYOC) service, touting it as the future of cloud computing, whereby individuals can access information stashed online.

It also revealed a fitness-tracking wristband, its first ever wearable device.

With this new vision Shih has predicted the company will "return to glory" by 2017 -- still with a clear commitment to its PC-making roots.

He says there is now a better sense of teamwork and entrepreneurship at Acer, where senior executives took voluntary salary cuts of 30 percent as part of the overhaul.

- Sailing into the sunset -

"Before I made the decision (to return) it was a headache -- my wife didn't agree, but no one accepted my invitation to the chairmanship. I asked many people. We tried every other possible way, but there was no choice," says Shih.

"The main reason I came back was my personal social responsibility, not my investment.

"There are so many shareholders, so many employees and partners under Acer."

The father-of-three and grandfather-of-eight will step down as chairman at a board meeting on June 18, but will remain a board member. Co-founder George Huang will take his place as chairman.

Chip expert Jason Chen became president and CEO in December and Shih's son Maverick heads up the company's BYOC and tablet group.

"I have a new chairman, new CEO, new management team. Of course it's just beginning, but it looks as though everything is shaping up," says Shih.

"I think all our efforts have had a good result -- it's too early to claim an achievement, but we're encouraged."

And his wife of 43 years, Carolyn Yeh, is also happy despite her initial reservations.

"She supports me and she can see it's (the company) stabilised and turned around gradually," he says, crediting her for looking after his health.

"I get up in the morning and walk with my wife. After dinner we also walk again -- 10,000 steps together every day.

"It's good for us because we chat a lot when we walk."

In September the couple will be taking a cruise on the Danube with friends and Shih says he is relishing the prospect of taking his foot off the gas.

"I still have a personal social responsibility, but I won't have any criteria imposed from outside, from my peers, Wall Street, quarterly results. I like to release the psychological pressure," he said.

"At some point, you have to retire."

It's not just smartphones and tablets anymore. The world's tech giants are now battling over a wider array of connected devices, from refrigerators to cars to wristwatches.

Announcements in recent days from Apple and Samsung made clear they are staking their claim to the "Internet of Things" following Google's announcement earlier this year that it was creating a new Android platform for wearable electronics.

"The Internet of Things is the next big platform," said Roger Kay, an analyst with Endpoint Technologies Associates.

"These are potentially billions of devices. That's a big market, so every consortium is lining up for that."

A study released by research firm IDC said the market for the Internet of Things (IoT) will grow from $1.9 trillion in 2013 to $7.1 trillion in 2020 as businesses and consumers adopt smart technology for homes, cars and a variety of accessories.

Apple unveiled Monday its new mobile operating system iOS 8 along with HealthKit software to manage personal healthcare and HomeKit for home appliances, while encouraging developers to create services for the iOS operating system used in iPhones and iPads.

- Apple opens up -

"Apple iOS 8 has the beginnings of a full-fledged platform supporting IoT, you can see it with their health and fitness hooks and their ability to entertain more third party devices," said Compass Intelligence chief mobile analyst Gerry Purdy.

But Apple is following its own path, aiming for tighter control and with less interoperability by limiting connections with non-Apple devices.

"It may be that Apple will just colonize a few areas and do it well," said Kay.

Samsung, meanwhile, is jumping into the fray with Tizen, an open-source operating system that could take on iOS and Android for connected devices.

Frank Gillett at Forrester Research said Samsung -- by far the most successful maker of Android phones and tablets -- wants to distance itself from Google in the next phase of technology.

"I think Samsung is in a challenging and difficult place," Gillett told AFP.

"They have been successful in building devices but they don't have a software platform or a consumer relationship."

Gillett said that with Tizen, Samsung is aiming for "a multi-part software and services strategy to build sticky relationships with customers to keep them buying hardware."

Still, he said it was "an uphill battle" for Samsung, which is trying to establish a new platform to compete against Android, iOS and others -- including Microsoft's Windows and BlackBerry's QNX, which is widely used in automobile systems.

Richard Windsor of Edison Investment Research says Google has shown it can make money from this strategy of offering Android for free.

"Samsung has mistakenly assumed that it can maintain its 18 percent handset margins by focusing on hardware. Consequently, it has been willing to cede complete control of the ecosystem to Google," he said in a research note.

"This has ensured that Google will grow nicely driven by mobile advertising revenues while we expect Samsung to experience declining earnings."

- A wide open market -

But the Internet of Things will likely be big enough for several platforms and may not see the same platform wars as the PC or smartphone markets.

"I don't put any platform out there in front," Gillett said.

The analyst said that the market is unlikely to be a "duopoly," and that there "is a whole other layer of complexity" to the market for the Internet of Things.

For now, some analysts see Google as best positioned to benefit from the new phase of the Internet.

Bob O'Donnell at TECHnalysis Research said the Apple strategy "is creating a great reason to stick with Apple devices across all their main categories," but added that "most Apple users don't have all Apple devices."

"Their vision could be made much more effective if they could somehow bring other non-Apple OS devices into the group," O'Donnell said in a blog post.

Kay said Google's ubiquity is giving a reason for developers of apps and other products to use Android.

"Android has been widely adopted and it's an adaptable platform," Kay said. "Developers go to the place with the most seats, because they want to sell to the largest audience."

rl/oh

APPLE INC

SAMSUNG ELECTRONICS

GOOGLE

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