Weibo: Conspiracy Theorists Chat Up Microsoft Defection, iPhone 6 Delay

Execs speculate on Zhang Yaqin’s jump to Baidu

Conspiracy talk was buzzing through the microblogging realm this past week, as numerous executives weighed in on 2 major news events in the China tech world. One of those saw Apple (Nasdaq: AAPL) finally unveil its new iPhone 6, only to mysteriously yank China from its global launch map without any explanation. The other saw executives speculating on the significance of and reasons behind the surprise defection of Zhang Yaqin, a longtime China-based Microsoft (Nasdaq: MSFT) executive who abruptly left the company for a job at leading Internet search company Baidu (Nasdaq: BIDU).

I’ve previously written about both of these stories with my own thoughts on what was happening behind the scenes. But these tech executives are more familiar with the local industries, and their observations almost certainly come closer to the truth of what was really happening with these 2 big stories. The first of those came when Zhang Yaqin announced his departure from Microsoft, where he had previously worked for 16 years, most recently as head of the software giant’s Asia R&D operation based in Beijing. (previous post)

I previously remarked that Zhang’s defection reflected the rise of a new generation of homegrown Chinese tech firms that could offer competitive employment opportunities to match the big multinationals like Microsoft. Zhang himself wrote about his decision, but was diplomatic and simply said that he had finished his mission at Microsoft and was ready for a new challenge. (microblog post)

Several other tech executives pointed out that Zhang was just the latest high-profile Chinese to leave a big multinational for a domestic company, and pointed to former Google (Nasdaq: GOOG) executives Lee Kai-fu and Lin Bin as examples of similar defections. Lee was Google’s former China head who left the company 5 years ago to start his own technology incubator, Innovation Works, in Beijing. Lin was also a high-ranking Google official who left to co-found fast-rising smartphone maker Xiaomi.

Wang Xiaochuan, president of search engine Sogou, had the most to say about Zhang’s departure in a series of posts, and even published his own list of other Chinese executives who had left big multinationals to work at domestic companies. (microblog post) He theorized that Zhang’s departure reflected a major shift in technology innovation, as Internet service companies like Baidu took over many of the R&D functions traditionally dominated by software companies like Microsoft. (microblog post)

Zhang Hongjiang, CEO of Kingsoft (HKEx: 3888), one of China’s leading homegrown software makers and himself a former Microsoft executive, concurred that Zhang Yaqin’s defection marked the end of an era. (microblog post) Fu Sheng, CEO of Kingsoft’s security software unit Cheetah Mobile (NYSE: CMCM), predicted more such defections to come, likening Microsoft to a dinosaur destined for extinction. (microblog post) It may be a bit premature to forecast Microsoft’s demise, though I do expect we’ll see a rising wave of similar executive defections from big tech multinationals as the number of major homegrown Chinese tech firms gets bigger.

Meantime, executives were also buzzing about Apple’s mysterious and conflicting signals about plans to release its new iPhone 6 in China. The company unveiled the newest iPhones in the US last week, and initially said that China would be included in an Asia launch set for September 26. But then it mysteriously deleted China from the Asia launch announcement, leading many to speculate it had run into problems with the Chinese regulator that must test and approve every new cellphone before it can be used in China.

Most of us who watch the industry concurred that the bureaucratic Ministry of Industry and Information Technology (MIIT) was behind the delays, but few of us speculated more specifically on the source of the problems. Several tech executives have stepped in to fill that gap, forwarding posts and venturing their own guesses on the issue. One of the most intriguing of those says the obstacle involves a new iMesssage feature on the iPhone 6 that allows users to send video and audio clips to each other.

Xu Lei, a vice president at e-commerce giant JD.com (Nasdaq: JD), said the MIIT failed to approve the new iPhones because the servers that hosted the iMessage service were all located outside China. (microblog post) The use of offshore servers for a China-based service could violate the nation’s strict censorship policies, and perhaps was behind Apple’s surprise announcement last month that it would use China-based servers to provide faster service to some of its customers in China. (previous post)

Another JD.com executive Xie Yongzhi gave a more benign explanation, saying MIIT tests were taking longer than expected, and that the approval could come later this week. (microblog post) Clearly Apple has run into some unexpected delays, though I doubt the company will comment directly on the nature of the hold-up. But the iMessage theory certainly sounds plausible, especially coming just a month after Apple announced its controversial decision to us China-based servers for some of its Chinese customers.

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