The progressive loss in consumer robotics company in the West to their Chinese counter parts has been disappointing. Much like drones, I suspect this is short sighted as the underlying technology eventually have national security concerns.
Now maybe these companies are likely just mismanaged and the cost of North American engineering is too high? That said, it still seems like there is a structural problem here that very few hybrid software-hardware companies succeed.
The problem is, Chinese consumer tech is full of extremely competitive and cut-throat companies. Some countries don’t like how their government is giving a tons of subsidies for them to progress like crazy (see BYD in 2012 vs now), but they’re delivering results. Combined with their low cost of engineering, the prices in the products are also pretty low, so it’s a no-brained for an average person to buy something for double the price for half of the functionality, just because it was designed in US.
It's competition. Competition made US what it is and now the US economy has moved from competing on product quality to competing on who buys a better lawyer and politician to block competing companies from existing. Or just buying them.
I wonder how much money is burned in the economy just paying people to write EULAs, laws and service agreements to more effectively avoid liability and screw over customers vs. how many is actualy going into improving products and services?
You're exactly right. I'm not asking for people to choose an inferior, pricier product. My thoughts is that China has the environment to have extreme competition which is leading to better product. This is distinctly not the case here. This is the structural problem that will eventually lead to a loss of competitive edge.
Your call out to BYD is a good one, because it is conceivable that even western-made cars will be made non competitive in 10 years and it seems that we are sleeping through the news (or even encouraging it). I hope I'm wrong, but the road ahead is filled with challenge because the direction is fundamentally wrong, and it will take a lot of effort to reverse course, if that is even possible.
A lot of western companies do not compete anymore - established european countries are basically oligopolies and their lunch is slowly eaten by the more aggressive chinese companies and Tesla. American companies - aside Tesla - is in the same situation. Rich on government contracts and control over their home market.
Basically a lot of established manufacturers are IBMs of this era.
Uh, Tesla got tons of money direct via carbon credits and indirect via consumer EV credits. They're actually in trouble for possibly lying about their range and getting more credits than they should have.
Yeah it sucks. We’re trying to play catch up game for manufacturing industry, but it’s abysmally hard to get it going. I don’t think we can easily pour down money and the talent and processes would just reappear in a couple of years either. So, my assumption is high-scale tech protectionism wars are going to start.
I think people focus on protectionism because that is the traditional tool to fight things like foreign government's unfair subsidy practices. However, you cant just have protectionism without fostering competition and innovation in order to succeed in creating a more competitive product/market. Example would be USA protectionism against Canada's bombardier. It only protected Boeing but didn't actually make Boeing make better planes, as we can see from all the recent issues.
So I think protectioism is fine as long as we properly setup an environment that allows for and encourages competition and innovation. However, that doesn't seem to be a path we are used to taking .
Absolutely agreed. I do think it will go the Argentina way if/when we start mass banning imports of Chinese consumer tech. Well, unless, as you mentioned we start heavily investing and encouraging local competition. I guess, time will show, but I hope we don’t cut ourselves out of good products just because “they’re foreign”.
It's hard to call it mismanaged when they did the playbook that is expected by prevailing finance and economic views since the mid 70s: paring down to one thing and increasing what you give to shareholders over time. Or perhaps that is the structural problem.
The problem is Chinese companies are subsidized by their government to manufacture things of little or no intrinsic or critical value. Automated vacuum cleaners and consumer drones are niche electronic novelties. Electric cars using solid state batteries are also novelty that will be obsolete once electric engines that use liquid fuels become mainstream (fuel-cells).
The purpose of subsiding what are zombie companies is to maximize employment to ensure internal stability. The wins these companies show are propaganda wins only and don’t make the country more competitive. Foreign manufacturing is also migrating out of China at an alarming rate as shown by falling exports and GDP growth.
None of the development in the Chinese technology sector is sustainable. These companies would never survive on their own without subsidies and are dependent on them. It’s a cascading failure waiting to happen in the Chinese economy and will likely be a global shock. At least the Americans may appear to take longer to develop winning companies but once they do they tend to be sustainable and long lasting as organic enterprises.
Edit: The American free market is working as intended because it rightly values robotic vacuums as useless devices.
> Electric cars using solid state batteries are also novelty that will be obsolete once electric engines that use liquid fuels become mainstream (fuel-cells).
This seems like a big statement, can other experts comment?
Current battery tech has a slow and steady progression of improvement. There is bound to be a market disruptor at some point in the future, but it’s far from a guarantee that it’s going to be hydrogen.
I believe the biggest hurdle to any changes to current battery tech is that it costs so much to develop an entirely new process and build factories. Most innovation is in the form of small adjustments. For hydrogen to overcome this hurdle it would have to either be extremely cheap or have some unique property. For cars I don’t see hydrogen having that much of an advantage, but maybe electric planes would be feasibly powered by hydrogen due to the much improved weight to energy ratio.
you have so much incorrect views of Chinese companies, the technologies these companies have, what is actually happening on the ground in China. You also vastly underestimate the real complexity of making today's products, even as mundane as a hair dryer or a toy. Chinese manufacturing makes making them look easy, people think all you need is bunch of cheap labor and you are set. No it's not. Also, for white label products, examples like hair dryer, washing machines, air conditions, its the Chinese companies who design, build and test, the entire lifecycle of the product, importers buy them and slap on their own brand.
Think what goes into a hair dryer? Exterior design, looks good and functional. How you make the plastic cover, do the plastic injection molding? How you design all the internal parts, fan, motor housing, heating wire, power circuits, micro-controllers etc, and make sure everything fits. Some companies even do individual components themselves, like the brushless motor, or there is a Chinese supplier that makes them, which provides much faster time to response. Then do the testing for each component, electric, heat, water, moisture testing. Then design a mass manufacturing system with automation and human labor that achieves really high yield and low wasted materials. This is the hardest part, its easy to make a hair dryer by hand taking 100 human hours and make sure it works. It's much harder to make 1M hair dryers per month, that is going to be used in all sorts of environments and with all kind of abuse, make sure they work well for a number of years so customers don't return them, or you go bankrupt from recalls and warranty, and make sure you only have to throw out the absolute smallest number of manufacturing defects, and really control your cost structure so you still make a profit when importers are squeezing your price. Then the supply chain and logistics, shipping from suppliers and shipping to customers. Then create a number of products for different markets. China can manufacture for cheap, but people don't realize manufacture for cheap and at massive quantities is a technology itself. It's also management, business process, even company and worker culture. China doesn't have the cheapest labor cost. It's the combination of everything that produces a physical product with the level of quality, fit and finish at the price point.
It’s only disappointing if you care about the relative power of national economies.
As someone who doesn’t care at all about stack ranking or any nation’s “national security”, as a consumer, more competition, and more and cheaper products is a simple and uncomplicated win.
Almost all of my favorite companies are in Shenzhen presently. I would move there if I could do so easily.
> Almost all of my favorite companies are in Shenzhen presently.
All my favorite devices were designed/engineered either in Japan or in the USA. I'd take good engineering over cheap manufacturing every time. And we could do with lower number of devices. While they are probably made in the same factory, I'd love a focus on quality instead of price.
Following your own logic, you'd never have had any Japanese engineering if everyone thought the same thing about japan in the 60s and 70s. It used to be considered the place where cheap stuff and knock offs were made, but it evolved from there. Same seems to be happening to China right now
As someone who actually care about those but not a US citizen, I welcome all of these! It's just funny seeing the free trade principles that's been repeated over the ages getting reversed like this. Now this is the end of colonization.
unless you are a descendant of Chinese or at least Asian people, if you move, you may find what "national security" is about.
countries compete, albeit on different rules - having a monopoly on violence and a centrally controlled money printer tends to do that - so your dream of 'just pure free market competition' can only ever be that - a dream.
With China's policy being what it currently is, we're going to feel the economic consequences, in the US and in Shenzhen alike :( Good thing if it's going to be only limited to economic consequences.
Now maybe these companies are likely just mismanaged and the cost of North American engineering is too high? That said, it still seems like there is a structural problem here that very few hybrid software-hardware companies succeed.