The summer of Taiwan tech independence

This summer Taiwan will declare its independence.

Not from China. Not from America.

From Microsoft.

Symbio CEO Jacob Hsu (right) has been working with Taiwanese OEMs for 10 years and says they are finally ready to kick off the traces and become their own brands.

This surprised me. I was at last year's CompuTex show, in Taiwan, looking for Linux, and it just wasn't there.

While many of the Taiwanese businesspeople I talked with expressed a desire to go outside the Microsoft orbit, every booth featured Windows gear, usually with Intel chips.

But Android, the mobile operating system Google has built on top of Linux, is turning heads. "Google put together a complete package" for Android, Hsu said, with "software Development Kits (SDKs) and other things people could use."

Working with programmers on the mainland, Taiwanese companies have spent the last months seeking to innovate on top of the operating system, Hsu said. The result is "holistic, complete packages, customized and differentiated products on top of open source systems."

By June this will become obvious in a wealth of new Android tablets -- Hsu expects CompuTex this year to be a "tablet show" -- followed next year by netbooks running Google's Chrome OS.

This also spells opportunity for U.S. companies like Symbio, which can deliver "market-focused" software designs based on an understanding of buyers, usability, and retail channels.

What Hsu sees as opportunity, however, is also Taiwan taking big risks.

"Taiwan is capacity constrained right now," Hsu said, unable to increase hardware production, which is growing on the mainland. China also has more software expertise than Taiwan, which is hardware-focused. Taiwan has to step up and start building brands.

"An original equipment manufacturing (OEM) business has less than 5% margins. Companies with brands are at 15% plus." Taiwan must march up the value chain.

In that march, the success of HTC, which makes the Google Nexus One phone, is illustrative. "HTC acquired a design shop in California that became their software innovation group," Hsu said, while some competitors built software shops of 1,000 developers on the mainland and are still spinning their wheels.

"Now it's a question of execution," Hsu concluded.

But that means more than it did last year, when you could look at a USB stick shaped like a piece of sushi and estimate its market success. Now reviewers will be looking at user interfaces, and at marketing plans.

Independence is not an easy thing to pull off.

This post was originally published on Smartplanet.com