Chinese Encryption Standard

By Eric Nee  |  Posted 2004-03-26 Print this article Print

?"> Because China is rapidly becoming one of the largest wireless markets in the world, most foreign firms will probably support Chinas encryption standard as well as the IEEE standard—dispute increasing pressure by the U.S. to relax the requirement. Broadcom Corp., for example, plans to support WAPI but wont have a chip ready by June 1. "Broadcom intends to comply with the law," says Jeff Thermond, vice president and general manager of Broadcoms home- and wireless-networking business unit.

Of course, Chinas efforts could backfire. Instead of boosting Chinese firms, the new standards could isolate them, and the Chinese market, from the rest of the world. But as long as China concentrates on markets where it has a sizeable presence, such as wireless, that is not likely to happen.

Regardless of the outcome for Chinas technology companies, the impact on CIOs is real. Companies with offices or manufacturing plants in China will have to support multiple standards, one for China and one for the rest of the world. Users who travel between China and the rest of the world will be faced with the same challenge of buying devices that support multiple standards. And vendors will be forced to divert scarce resources away from innovation.

Just when it looked like the world was moving away from multiple proprietary standards to fewer industry standards, we now seem to be heading in the opposite direction, thanks to the Chinese. That is bad for IT companies, and bad for users.

Eric Nee, a longtime observer of Silicon Valley, has served in a variety of editorial positions at Forbes, Fortune and Upside magazines. His next column will appear in May.


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