Iot Transforming Taiwan’s Tech Sector

What do you do when you are a computer vendor from an island-nation responsible for 89% of the world’s laptop computers and three-quarters of its desktops, but the global computing market is heading away from those traditional form factors?

For many computer and gaming companies in that country (Taiwan), the answer will have something to do with the Internet of Things (IoT).

Some Taiwanese companies seem to have figured out exactly what steps they will take in that direction, while others appear to be either scratching their heads or throwing various ideas against the wall to see what sticks. In the process, they are plunging into, or at least dabbling in, everything from wearable technologies to tablet computing tailored for different demographics to three-dimensional (3D) networked gaming intended to leverage the long- awaited arrival of one of the IoT’s more captivating wearable devices: virtual reality (VR) goggles.

That was the upshot of a recent visit to Taiwan, where we met with vendors from the laptop, gaming, networking, and storage industries.

Case in point: Taipei-based Acer has long been among the world’s top vendors of laptops. Last year, its annual sales of laptops and desktops plunged by 20% to 68.4 billion Taiwan new dollars (US$2.1 billion) from 2014’s 85.9 billion (US$2.64 billion). According to research firm Gartner Group, Acer’s unit-shipment decline of 11.2% from the fourth quarter of 2014 to the fourth quarter of 2015 outpaced the general industry decline of 8.3%.

In response, Acer in March reorganized into two units, one dedicated to traditional gear, the other to IoT-oriented categories such as cloud services, smartphones, and wearables. In Taipei, the company showed a few new IoT-oriented projects, such as a tablet computer dubbed the grandPad, tailored to help senior citizens stay connected to family and caregivers, to foster a sense of community, and even to eventually help hail an Uber.

The grandPad is not Acer’s product per se. Rather, Acer has invested in an eponymous Los Angeles company, grandPad, to help add features to the three-year-old tablet and accelerate its uptake.

Perhaps one of the most striking features about the grandPad, and one that signals that the IoT era will indeed require vendors to change their ways, is the manner in which Acer will market it: the company has teamed with Verizon in the U.S. to provide the tablet for "free" (with a $60-per-month service charge).

The grandPad partnership is focused for the moment on the U.S. An Acer spokesperson said "we will share more information in due course" on possible expansion into other territories.

With the IoT, "The business model is very different," noted Maverick Shih, president of Acer’s Bring Your Own Cloud (BYOC) division and son of company founder Stan Shih. The new grandPad and the two-year-old BYOC division are part of a broader push that Acer calls Beingware, aimed at offering hardware, software, and services across different types of connected devices as a way of "improving all facets of life, business, and innovation."

Those connected devices will include bicycles, as Acer has put together an online cycling community called Xplova that includes a cycling app for a handlebar-mounted smartphone that maps out routes, shows road conditions ahead, and allows riders to post and share their trips and times. Xplova wearables should be coming, as Shih said Acer hopes to offer a heart monitor strap, but that will not be the company’s first foray into wearables; Shih said another Acer unit is already offering a fitness band (the Acer Liquid Leap Active, which charts physical activity and also displays social media alerts and lets users control music housed on their smartphones). Also, in February Acer announced it was working with Swiss company Victorinox to offer a hardware add-on that turns the Victorinox Swiss Army Watch into a smart watch.

Acer’s offerings can collect data about cycling locations, taxi rides, heart rates, and more, but Shih said Acer will only collect data when consumers opt in, and would use the data only to observe the performance of its equipment and improve it.

A silver lining for Acer is that its direct competitors are wrestling with the same issues of how to secure a future in a computing world heading rapidly into a services-oriented Internet of Things. That will affect Taiwan’s prolific contract manufacturing industry: Taiwanese companies such as Qanta Computer, Compal Electronics, Wistron, and Hon Hai/Foxconn produce laptops and desktops for many of the world’s biggest computing brands.

It is not just Taiwan’s computer makers that want to tap the IoT and wearables; Taiwanese companies are coming at it from all walks of the IT trade. For example, Transcend, a major player in the storage card and USB drive market, is grappling with a business decline corresponding to the growth of remote cloud storage, which is eating away at sales of USB storage.

Transcend has a couple of IoT ideas in mind, such as new form factors for wearables. However, it is unclear exactly what those will be; "I don’t think anybody can answer that," said Jeff Liu, Transcend’s special assistant to the CEO. One such product might be a wearable camera, which Transcend is believed to be developing with other vendors, that presumably would strap into clothing such as a police vest and capture video in much the same way police dashboard cams operate today.

Taiwanese networking company Edimax Technology was more vocal about its IoT plans. "The IoT trend is growing very fast, in the home and also in the public domain," said Kevin Huang, vice president of the company’s IoT business unit, who cited IDC research that the IoT market will grow from $4.59 trillion in 2014 to $7.29 trillion in 2018.

Focused on routers and USB adapters, Edimax is now expanding rapidly by tying new devices into its networking gear, and is striking partnerships to make it happen. For example, with financial backing from the Taiwanese government, Edimax has helped deploy boxes around the city of Taipei to monitor air quality. The so-called "Air Box" tracks fine particulate matter, also known as PM2.5 (particulate matter which is 2.5 microns or less in width, a known health hazard), using sensors from Japan’s Sharp. It allows individuals to track PM levels throughout different neighbourhoods via apps in a system it calls EdiGreen. Edimax hopes to eventually monitor other things, such as carbon dioxide, water, and traffic.

For the home, Edimax is developing wireless networks of cameras and sensors. The company has a strong background in security cameras and is developing different-sized cameras to fit innocuously in places like front-door peepholes to watch for intruders and send messages and real-time video to homeowners should a break-in occur; the same unit can include a sensor that turns on lights inside the house when someone (legitimate or not) enters.

"We’ve named ourselves ‘door experts,’ said Huang – a nod to zeitgeist of the IoT, in which anything that can be digitized, will be. Edimax has developed a proprietary wireless technology that works in the 2.4GHz range and is not Bluetooth, ZigBee, or Wi-Fi, but is designed to work out of the box as a kit. The company already sells some of the cameras, and it is targeting the third quarter for release of packaged sets of plug-and-play sensors, apps, and cloud services.  Edimax refers to it as a "service" although it will sell it as a product.

By the end of the year, Edimax hopes to expand into wearables, Huang said. While he would not specify what the company might introduce, he did say one of the limiting factors at the moment is that the life of the small batteries required for wearables is generally not long enough.

Edimax is also looking into tying lighting systems into networks, allowing users to control lighting levels via apps.

Likewise, networking company ZyXel Communications is pursuing smart lighting as part of its IoT/smart home strategy.  It is talking with a European lighting company about tying that company’s LED bulbs into a network system using a ZyXel gateway, said Chinru Lin, vice president of the smart living business unit.

Lin noted ZyXel is becoming more of a software company as it adds software to its networking gateways to support IoT activity. ZyXel now employs 10 software engineers for every hardware engineer, which he said helps the company strike deals with service providers.

"Software is the value-added to the service provider," said Lin, noting ZyXel will tie its home gateway into networks connected not just to lighting, but also into sensors that help monitor motion, temperature, and many other things.

"You have many different devices in the home, and we want to connect them," Lin said. "The IoT is a huge system. It’s a lot of different things."

Certainly, one of those "things" is gaming. Taipei-based Cooler Master, which specializes in providing cooling products for gaming systems, hopes to embed small, flat specialized cooling plates into virtual reality (VR) goggles and gloves, said Jacqueline Wang, director of the firm’s OEM business unit. The plates, which use a two-phase flow, vapor chamber, and heat pipe design, transfer heat over 50 times more effectively than standard copper heat exchange pipes, she added.

Also on the gaming front, the long awaited emergence this year of VR glasses from the likes of Oculus, HTC, and Sony, prompted Taiwanese laptop maker GIGABYTE to introduce a super-high-spec , $2,999 gaming laptop called the X7 DT which includes GTX 980 Nvidia graphics and a streaming engine from AVerMedia Technologies that, until now, has only been found inside desktops, according to the company. The net effect will be to allow serious gamers to strap a powered-up laptop on their backs, don VR glasses, and play action war games.

"People say that this is the first year of VR," noted GIGABYTE’s Jone Chang, director of the company’s notebook product division. "We think gamers will care about VR very much."

Throughout all these endeavors, vendors will grapple with the question of how to monetize their efforts in a world that is becoming much more about services and data collection and analytics than it is about the hardware Taiwan has for decades churned out so effectively.

Let the IoT games begin.

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Travel to Taiwan was funded by the Taiwan External Trade Development Council, which is backed by the Taiwanese government.

Mark Halper is a freelance journalist based near Bristol, England. He covers everything from media moguls to subatomic particles.