Page 133 - How China Is Winning the Tech Race

the Cultural Revolution even though China was a fairly backward third
world nation, suffering famines and civil wars, with little progress from the
late nineteenth century until economic reforms began in the late 1970s.
Not everything Lingtu does is so high-tech. To map remote spots in the
countryside, for example, Lingtu sends out two-person teams on bikes to
record sights with small video cameras. Such a juxtaposition of low tech with
high tech would be hard to imagine in the United States, but is not out of the
ordinary in the emerging economy of China, where high-speed bullet trains
exist side by side with carts pulled by donkeys.

Surveying the market

Computerized maps went commercial in 1985. It is an exacting art; every
bridge, tunnel, and bend must be recorded precisely. Today the digital map
business is enormous: $60 billion from data, software, and traditional geo-
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graphic information systems largely for professional logistics use. The wild
card is the consumer segment because of the proliferation of mobile phones
with GPS receivers.
The Chinese digital map market is soaring as car ownership picks up and
mobile phones become as ubiquitous as house keys. By 2012, privately owned
vehicles in China with GPS navigational devices will reach almost 25 million,
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up from nearly 1 million in 2006, and China will narrow the gap between
itself and the United States with comparable numbers of 7.2 million in 2006
and 46 million in 2012. Even faster growth is coming for smartphones,
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PDAs, and cell phones with built-in GPS technology as prices for a standard
handset with navigation functions fall from a current $350. By 2012, China
will have 19.4 million phones and PDAs with navigation tools, up from
540,000 in 2006, nearly reaching the 2012 U.S. forecast of 23.7 million. 4
Despite these huge growth numbers, the technology may not go mainstream
soon. Reading maps on small-screen mobile phones with short battery lives is
not for everyone, says analyst Stuart Jeffrey at Lehman Brothers in London. 5
On a global scale, Lingtu is overshadowed by two large publicly listed
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mapmakers: Amsterdam-based TeleAtlas and Chicago-based Navteq. Both
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digital mapmakers entered the Chinese market in recent years, Navteq
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through a joint venture and TeleAtlas with a licensing agreement. Tiny
Lingtu is ramping up quickly in China, its only market so far. Projections for

Lingtu—China’ s Navigator 107