Expert Advice: Little Tigers versus Wolves

July 1, 2013  - By
Greg Turetzky

Greg Turetzky

By Greg Turetzky, Intel

I recently attended the Fourth China Satellite Navigation Conference (CSNC, held May 15–17 in Wuhan, China), as an invited speaker and panelist. I had attended the third CSNC last year in Guangzho, and as expected this year’s was a little bigger and a little better. The Chinese GNSS industry is growing quickly, as evidenced by the more than 2000 attendees with as many as 10 simultaneous sessions at some times, with more than 200 presentations over three days, and nearly 150 exhibitors on the show floor. The conference is mainly attended by Chinese, but they are working hard to attract an international audience by providing simultaneous translation of all presentations, and dual-screen projection for slides in English and Chinese if the author chooses.

I couldn’t possibly see everything, so I chose to spend most of my time in a series of sessions on industrial policy, regulations, standards, and intellectual property. I thought those sessions would provide the most unique information this conference had to offer. I expected to hear a lot of standard or official position statements without much audience discussion, but I was pleasantly surprised by the level of information from personal experience that the speakers offered and the amount of lively debate that often followed the presentations. The simultaneous translation was essential and not only allowed me to follow but created the opportunity for multi-language Q&A which allowed more complex questions to be asked.

I was particularly interested in understanding what changes were going to occur since the full release of the BeiDou Interface Controld Document (ICD) in December. One thing I noticed right away is that the term Compass has pretty much gone away. The official name, and what everyone used in their presentation, is BDS. I am not quite sure I follow the methodology, but it’s an abbreviation for the BeiDou Satellite System. I would certainly recommend to anyone meeting with Chinese business associates that you appear very up to date by using BDS instead of Compass in all your presentations, oral, written or PowerPoint.

The changing of the official name is just the first ripple in what I expect will be a wave of changes in the BDS industry (see, I learn fast). One of the most interesting talks was given by Hua Xu, whose affiliation was given in the English program as “BDS specific policies and regulations expert team, ex-director of the policy and regulations Division of Development and Reform Commission.” His talk was entitled “Thoughts of perfecting China’s BDS Industry System Construction.” He related several interesting anecdotes about the history of the satellite program, going back many years, all the way to the Cultural Revolution of the 1970s. As an example of how different the Chinese setting is for legal issues, he told us that in China, if a car hits a pedestrian, the car driver has to pay damages regardless of fault, because since he is driving the car, and the car damaged the pedestrian, he must accept responsibility. Mr. Xu spent more time talking about how China’s GNSS industry must grow in terms of industrial capability, intellectual property, and mass production, and how the government is encouraging that growth.

To date, that growth has been very rapid, as embodied by a vast array of small companies focusing on domestic Chinese applications of BDS, in particular in survey and mapping and in search and rescue. The growth impetus now moves to the automotive sector, where there is continued investment by both the national government and regional governments to promote the use of BDS in transportation projects involving trucks, taxis, and government vehicles. Some may view this as protectionist, due to the approved vendor lists and subsidies that are provided, but I think it is just a natural effort to create local centers of excellence and jobs in a new technology; this process occurs all over the world. The companies that are in this business are the 150 or so who exhibited on the CSNC show floor, and they are the little tigers of my title.

Most of the names of the little tigers are not that familiar outside of China: unicore, BDstar, Olinkstar, and many more. They have developed their own GPS+BDS chips and are selling them in moderate quantities of thousands for domestic customers. At CSNC, they presented lots of results that clearly show the advantages of multi-GNSS (GPS+BDS) within today’s BDS regional coverage area. Furthermore, the accuracy and time-to-first-fix performance of their solutions is comparable to the overall market. However, as market needs in China grow from thousands of units to millions of consumer devices, the little tigers are not quite ready yet to support the Lenovos (computers), HTCs (smartphones) and Huaweis (mobile phones and tablets).

But China wants to see BDS in all those consumer devices, to demonstrate to the world the benefit of BDS; hence the ICD was released in December. The ICD release opened the gate to China’s domestic market that previously was solely hunted by the little tigers. The wolves were waiting at the gate and they have charged in. Broadcomm, CSR, Trimble, NovAtel, and others have already publicly announced BDS support in their mainstream products, in the first few months following the release.

This was the topic of the discussions in CSNC that were most revealing for a foreigner like me to hear. I was ready to ask the tough question of what the future holds in the consumer market, because I figured no one else would. But much to my surprise, the moderator of the session put up a slide that translated to: “B1 ICD was released while Regional System is officially operational, will affect domestic BDS receiver industry? Pros? Cons?” (See opening photo.)

The ensuing discussion was quite lively but polite on both sides of the issue. Would subsidies continue for domestic suppliers? How could local companies hope to attract investment to scale up with international competition? Where could Chinese companies carve out intellectual property to protect their inventions? What could that government really do without running afoul of the World Trade Organization?

Many more questions were raised than answers arrived at, and I think most of the really interesting discussions took place away from the microphones and the simultaneous translation. So I cannot provide them for you.
Even without answers, the act of discussion was enlightening. I think the fact that these discussions are happening in public forums indicates the growth and transformation of Chinese society. There were finance people, engineers, businessmen, government regulators, all debating a difficult topic.

I don’t know the answers, but the little tigers know that the wolves are coming. And they are not running in fear. The openness of the internal debate within China indicates that the little tigers are working on a new plan, and no one should assume that the wolves are going to win. The competition in the domestic Chinese market — the very largest market, by far, of any in the world — is going to be very interesting over the next few months and years.

Greg Turetzky is a principal engineer at Intel responsible for strategic business development in Intel’s Wireless Communication Group focusing on location. He has more than 25 years of experience in the GNSS industry at JHU-APL, Stanford Telecom, Trimble, SiRF, and CSR. With this issue, he joins GPS World’s Editorial Advisory Board.

The statements, views, and opinions presented in this article are those of the author and are not endorsed by, nor do they necessarily reflect, the opinions of the author’s present and/or former employers or any other organization the author may be associated with.

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