The US government is gripped by Huaweisteria. That’s made it do a very good thing—block the dismemberment of Qualcomm by Broadcom—for a very bad reason, which is the government building Huawei into a foreign tech bogeyman and proxy for the Chinese government.

Based in San Diego, Qualcomm is a great American technology success story that employs tens of thousands of people and throws off innovation like the sun throws off light. It also annoys its customers by charging them high rates to use Qualcomm’s innovations, but that’s neither here nor there at the moment.

Ben Thompson at Stratechery has an in-depth explainer on Qualcomm’s business models, and why the Broadcom acquisition was seductive to shareholders. But my quick summary is that Qualcomm has become for 2018 what the RAND Corporation and Bell Labs were to the mid-20th century—a privatized way for the US to do basic scientific research that then benefits our government, our entire economy, and the world.

Unfortunately, basic research involves a lot of long bets, some of which fail, and it isn’t optimized for maximum shareholder value. Broadcom, formerly Avago, is a technology chop shop designed to squeeze profit out of its acquisitions. Some Qualcomm shareholders were reportedly rubbing their hands in glee at the prospect that Broadcom could make maximum bank on current and near-future products by ditching those long bets.

So the government’s decision doesn’t have to do with Broadcom being based in Singapore—in fact, Broadcom was in the middle of moving its headquarters back into the US. It has to do with Broadcom’s business model of being a technology Dollar Tree, and how that would cause the merged company to lose leadership in 6G. (Yes, 6G. 5G is pretty much baked at this point.) The government just had to act now because it could only legally make this move while Broadcom was still based overseas.

This is all good, actually. The problem is the underlying motive of the government trying to amp up a technology Cold War with China.

Most reporting is saying that the deal was killed because the government doesn’t want Huawei—specifically Huawei, not anyone else—to gain an upper hand in 5G development, much as that insane “nationalized 5G network” proposal in January was specifically about fighting China.

This isn’t the only similar deal that’s been blocked recently. According to Bloomberg, the government has blocked nine foreign purchases of US companies in 2017 and 2018, and eight involved Chinese buyers.

Yellow Peril Strikes Again

Make no mistake: China is protectionist and does a lot of really obnoxious things. Its government nurtured its tech industry through the first half of the ’00s by essentially ignoring Western intellectual property, and it set hurdles for US tech giants that were designed to protect and nurture local Chinese competitors. The Chinese government plays dirty. It’s also an undemocratic regime that may soon be run by a president-for-life.

But hey, call me an idealist. I was hoping that we were a little more open than that. Or at least, pragmatically, that we could take a broad nationalist view of things, as opposed to a specific “China scary!” view of things, because singling out China as The Big Enemy invites a trade war where everyone would lose.

There’s a broad nationalist reason to protect Qualcomm. Ericsson, Nokia, Intel, and Samsung are all making big swings towards 5G. Protecting US technology leadership means protecting it against Samsung and Ericsson, too, but our government seems scared only of Huawei.

At Mobile World Congress 2018, Samsung’s home 5G solution looked more mature and functional than Huawei’s, with a working handheld tablet and a sleeker home modem. Ericsson showed off a broad range of industrial 5G solutions, with a big focus on smart city applications. Nokia told us how it’s working with Sprint on 5G technology.

Ericsson is Swedish. Nokia is Finnish. Samsung is South Korean.

If you’re a technology nationalist, then yes, absolutely, it’s important to keep Qualcomm intact, especially because the other major US 5G player, Intel, is strong on patents but weak on products. At the show, Intel’s clunky 5G products appeared to be a year behind other players.

But to do it because you’re worried that specifically Huawei is going to control the world like some inscrutable operative of the evil Red Star Regime makes my skin crawl and invites a tit-for-tat cycle of retaliation.

I’m very glad that an independent, US-based Qualcomm will be able to develop new technologies that will benefit all of us for decades to come, as opposed to being stripped for parts by shareholders looking for short-term profit. But ginning up anti-Chinese hysteria, which will reduce US consumer choice and invite retaliation, is a bad and unecessary way to go about making a good decision.



Source link

Content Disclaimer 

This Content is Generated from RSS Feeds, if your content is featured and you would like to be removed, please Contact Us With your website address and name of site you wish to be removed from.

Note:

You can control what content is distributed in your RSS Feed by using your Website Editor.   If you are looking to make money from running your own business at home, visit the links below.

Tech Shop Offers


Music & Hifi Offers


Shop Categories