UPDATED 12:58 EDT / OCTOBER 20 2014

Apple Moves Into The Huge Asian Market NEWS

Investor insight on Asian IoT trends that will gain adoption in the U.S.

Apple Moves Into The Huge Asian Market

Apple Moves Into The Huge Asian Market

Look to the East for technology trendsetters. Asian countries are not only ahead of the West in terms of time zones, but in tech adoption as well. Countries like Japan standardized their cell phone economies long before smartphones even hit the scene, while social gaming is particularly telling of Asian tech trends likely to pick up steam in Western cultures. Does Asia have the same bellwether effect on the Internet of Things (IoT)?

SiliconANGLE Senior Managing Editor Kristen Nicole recently spoke with Toshi Otani, cofounder and managing director of TransLink Capital, about global trends regarding IoT. TransLink, a Silicon Valley-based venture capital firm, leverages proprietary Asia insight to invest in U.S. information technology start-ups, primarily those focusing on mobile, social and cloud applications; infrastructure; and services.

Otani possesses over 20 years of experience in management of and investment in high-tech companies and offered SiliconANGLE insights into Big Data and IT trends in Asian countries, the US, and Europe.

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SA: Why has Asia become a bellwether for tech trends in the US and Europe?

Otani: Our process allows us to see those trends in Asia and hopefully allows us to make more of those investments in the future. We invested in a company two years ago — Chartboost Inc., an in-game advertising network. If you’re familiar with the Angry Birds game at all, the way its developers promote new games is to cross-promote their own successful games.

Similarly, Chartboost provides a platform to optimize that promotion. The founders are gamers, and the value proposition is very straightforward. The platform is free, but whatever inventory is left over can be bid on to push through our network. It’s a direct bidding process for ad space in a popular game. On the flipside, the game publisher has complete control and visibility to see who’s advertising in their game.

Mobile gaming is more advanced in pan-Asia, and we’re also anxious to expand to the U.S. We quickly moved to a series A funding round with Chartboost and took a board seat. In a matter of four quarters the company’s U.S. revenues went through the roof. They grew exponentially, 50 times and 100 times. It caught the eye of a very famous investor from Sequoia Capital and that led to a B round of funding, as well as an uptick in valuation for the U.S. market.

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SA: I’m particularly interested in enterprise security, more specifically for wearables and BYOx trends. Any Asian insight here?

Toshi Otani, co-founder and managing director of TransLink Capital

Toshi Otani, co-founder and managing director of TransLink Capital

Otani: Speaking for Japan, the consumer adoption for gadgets and the willingness to try them out is very high. I’ve seen some data on the consumer adoption, and sophistication on mobile is through the roof. I think this will continue to be a market indicator.

I won’t say everything propagates, but certain trends from leading markets do [propagate]. I’d argue that Internet of Things trends will continue to do the same.

I think Internet of Things is going to be a collaborative effort. Asians are great at developing hardware but not software. There’s going to be a collaboration between US companies that spawn the idea, but work with hardware developed in the hardware region.

Speaking for China, the country is leaping in terms of information technology (Big Data management), because they don’t have the legacy information. This is the baggage that other nations, including the U.S., Korea, and Japan, have. If you go to a Korean apartment complex, all the keys are wireless. That’s a small example of Internet of Things, but how do you retrofit that into U.S. markets? Nest Labs Inc. is a different example. It’s a fascinating business model and it will likely spread through Asia, but it’s unique to the U.S. because of the way homes are set up here.

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SA: How can startups address retrofitting infrastructure for IoT? Any indicators you’ve seen from around the world?

Otani: Setting up for the tech-savvy folks is OK, but for my mother, she’d never be able to set it up. Who’s going to do that? Geek Squad? Crowdsourcing companies? Is there a business opportunity here? Are there other parties that have the information that could move into those types of services? It’s a critical component to adoption, but you have no concrete answer.

As far as Asian trends go, some companies we see here may not be able to do business immediately in Asia because of the retrofitting requirements. Some [technologies] don’t translate immediately, but there can still be an opportunity for growth. What could happen is, look at Nest and transplant that business model into new areas. The Asian companies are great at building hardware, but aren’t good at business models. I expect we’ll continue to see that trend. I think to increase adoption, there has to be something to address that.

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SA: Would you say that we’ll see IoT adopt a services model, as we’ve seen with enterprise cloud services?

Otani: Yes, probably. There’s a demand for a Geek Squad service type, especially as more devices and electronics make their way. The number of electronics going into the home is not decreasing at all. There’s an enormous business opportunity.

Cheryl Knight contributed to this article.
photo credit: samsungtomorrow via photopin cc

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