The heart of the old communications industry is moving from Europe to Silicon Valley

October 22 Nokia chose to release new products in Abu Dhabi, the first new release after Microsoft's takeover. While Microsoft says it will retain the Nokia brand, it is still speculating that it will be the "swan song" for Nokia's new product launches, on the one hand, concerns about the appeal of its products, and doubts about whether Microsoft can make Nokia a comeback. Finland's former pride, Nokia was completely defeated by Apple from Silicon Valley, and failed to save Nokia's former CEO, Elop, for a 18.8 million-euro severance deal, even more annoying the Finnish Prime minister.

What makes Europe angry is not just his sky-high severance payment, but also the threat from Silicon Valley to the heart of the telecoms industry. Once, if you want to say the heart of the communications industry, you may first think of Europe, where most of the thunderclap are in Europe: Alcatel of France, Siemens in Germany, Nokia in Finland and, of course, Ericsson in Sweden. In addition to Europe, there are some other giants: Canada's Nortel, Lucent's on the east coast and Motorola in Chicago.

But now the heart of the telecoms industry is no longer Europe.

In terms of networking equipment, Alcatel and Lucent in 2006 opted for a merger in response to European and American economic difficulties and threats from Chinese manufacturers, but the merger did not completely save two companies, and in October there were news that two companies would lay off 15,000 people in France and Germany. Nokia and Siemens chose to hold tight for the winter, but their situation is similar to that of rung, and layoffs are constantly being exposed. This is not the most tragic outcome, the former scenery unlimited North Power has collapsed, in 2009 bankruptcy, its collapse left only a large number of new giants (most of them from the Silicon Valley Internet manufacturers: Google, Apple) looting of the patent.

In terms of terminals, Apple, from Silicon Valley, has completely messed up the battle, and the inventor of the handset, Motorola, has been seized by Google, another Silicon Valley firm, even when it is on the back of a tree: People are always speculating about when it will end when Google has completed its mission (17000 patents). , the fate of the former giant ship Nokia is similar, the alliance with Microsoft not only failed to save Nokia, ultimately by Microsoft's low price revenue in the bag.

For Apple and Google in Silicon Valley, these former communications giants are no longer formidable rivals but tempting patents and experimental plots of hardware products.

An indisputable fact lies ahead: the brilliance of European communications giants is being obscured by Silicon Valley. The pace of Silicon Valley's subversion of the traditional telecoms industry continues: October 7 this year Google, Facebook, Intel and Microsoft joined the A4ai Alliance (Alliance for affordable internet, affordable Internet Alliance), The alliance aims to reduce the cost of entry-level broadband Internet access globally to less than 5% of individual monthly income. This seemingly beneficial approach is in fact undermining the business model of operators--relying on the internet and the cost of mobile Internet access--to reduce the cost of such costs, in addition to affecting carriers, will affect communications manufacturers.

In fact, because of the global economic recession, operator profits have fallen, the decline in network equipment investment has made equipment manufacturers sad day. Beyond the cost-controlled Chinese maker Huawei and ZTE, which has been able to rely on communications equipment, is the gradual transformation of Ericsson, the only established European communications giant to survive, because it chose to embrace Silicon Valley earlier: in 2009 it chose to set up its U.S. headquarters and research and development institutions in Silicon Valley, Move the mobile interconnection business and research and development to the United States, and actively work closely with the U.S. local operators. And at the terminal level, today's industry leaders, in addition to the vertical integration of the industrial chain is very successful apple, is to master the Android operating system of Google.

The internet giants from Silicon Valley are not going to stop, for them to build a network of the cost is too high, the existing communication mode is the operator to control the tariff and network experience of life, as a service and content provider of Internet manufacturers have not satisfied in their own one Ring of fuss, And to push operators to reduce the rate of increase experience, such as Google in the local area to provide low-cost Internet access services, so that users will be Internet access as a cost should be lower, the experience should be better services, to stimulate user demand, but also make operators have to reconsider tariff settings, In fact, Google is only likely to establish a "stronghold" with a demonstration effect, but it is impossible to really provide basic communications services.

However, in the face of the impact from the Internet industry, no matter how the operator worried about the fate of the pipeline, can not stop this trend of the arrival of the change does not mean that can not survive. The way to change is to be close to Silicon Valley and embrace the Internet. Ericsson survived and found a new business model, thanks to the early realisation that the industry's heart had shifted from Europe to Silicon Valley. The whirlwind of Silicon Valley is rapidly radiating around the world, such as the domestic Tencent micro-letter, which is also challenging operators, borrowing operators ' pipelines and bypassing the value chain of traditional communications, and the OTT business is likely to grow more and more in the future.

Such a fate seems too bleak for former giants, but the brutal business rivalry never gives you more time and opportunity because you are a giant, as is the case with Nokia's collapse.

The upheaval in the face of the Internet will continue to affect the communications industry, and no one can avoid it. Of course, the communications industry is just one of them, foreign media have predicted that the center of advertising is also moving from New York's Madison Avenue to Silicon Valley, and that the emergence of Google and Facebook has been a headache for traditional advertising agencies, who directly provide advertisers with internet-based marketing solutions; and Detroit's car giants are having a hard time, Google and Apple have got their hands on the car, causing much less attention to the car's original Heart "engine", instead focusing on how the car can be smarter to help drive. Of course, there are many examples to enumerate.

It can be said that there has never been a place like Silicon Valley, the technology to change the commercial interpretation so vividly, the new technology is here to change and even constantly create various industries.