Weibo: Google's Schmidt eyes China gadget market
The microblogging realm has been buzzing these past few days with speculation on a brief China visit late last week by Google (Nasdaq: GOOG) Chairman Eric Schmidt, who checked out counterfeit goods at a gadget market in Beijing's Zhongguancun high-tech area. Equally interesting was the inclusion in Schmidt's group of two former Google executives who now work for Xioami, the fast-rising smartphone maker that hopes to someday become China's equivalent of Apple (Nasdaq: AAPL).
The presence in Schmidt's entourage of former Google executives Lin Bin and Hugo Barra must certainly have some people speculating about potential future collaboration between the two companies. Lin was one of Google's former top engineers in China, and later left to co-found Xiaomi. Barra arrived at Xiaomi more recently, after making a high-profile defection from Google in September. Schmidt's interest in China-made gadgets, specifically local knock-offs of famous western brands, also had some people speculating that perhaps Google could be contemplating a roll out for its Nexus-brand smartphones or even its state-of-the-art Google Glass glasses-style device in China.
Schmidt seems to be quickly developing a deep interest in China, as this is his second visit to Beijing this year. He made another brief stop in the Chinese capital back in January, following a personal visit to the reclusive North Korea. This time he traveled first to South Korea, North Korea's archrival, before arriving in Beijing and touring Zhongguancun on Friday. His recent interest comes three years after Google's high-profile spat with Beijing in 2010 over self-censorship policies, which ended with Google's decision to shutter its China-based search service.
Against all that backdrop, a launch of Google's Nexus smartphones in China, or a partnership with Xioami, certainly wouldn't come as a huge surprise. Google has made a big push lately into hardware, first with its smartphones and then its smart glasses. Such products are far less controversial than online search, and thus are far less likely to lead to conflicts with Beijing. What's more, Beijing also prefers that big foreign companies invest in China through partnerships with local partners like Xiaomi.
All that said, it will be interesting to see what Google's next major move in China is. A partnership with Xioami certainly seems possible, especially considering the strong personal ties between the two companies. I could also see Google launch its Nexus phones in China over the next year, though it could face an uphill march due to stiff competition from all the local players, as well as from global powerhouses Apple and Samsung (Seoul: 005930). Whatever happens, the one thing that does seem clear is that China is back on Google's radar screen, and a new push into the market seems likely in the next year.