ETech Preview: Inside Factory China, An Interview with Andrew Huang

You may also download this file. Running time: 00:21:57

Subscribe to this podcast series via iTunes. Or, visit the O'Reilly Media area at iTunes to find other podcasts from O'Reilly.

China has become the production workhorse of the consumer electronics industry. Almost anything you pick up at a Best Buy first breathed life across the Pacific Ocean. But what is it like to shepherd a product through the design and production process? Andrew “bunnie” Huang has done just that with the Chumby, a new internet appliance. He’ll be speaking about the experience at the O’Reilly Emerging Technology Conference. In an exclusive interview with Radar, he talks about the logistical and moral issues involved with manufacturing in China, as well as his take on the consumer’s right to hack the hardware they purchase.

JAMES TURNER: Andrew “bunnie” Huang is the Vice President of Hardware Engineering and Founder of Chumby Industries. He’s pretty much the consummate hardware geek who has used his doctorate from MIT in electrical engineering to do everything from designing opto-electronics to hacking the Xbox. The Chumby, an internet appliance that delivers a cornucopia of information, is his latest endeavor. And he’ll be talking about the process of getting it manufactured in China at O’Reilly’s Emerging Technology Conference in March. Thank you for taking the time to talk to us.

ANDREW HUANG: No problem.

JT: So I have to start by asking, were you one of those kids who took everything apart in your house?

AH: Oh, yeah. Yeah. My parents had a problem with that. There was lots of stuff taken apart. Not everything got back together again. Most things did. But there’s definitely a few things that got hidden underneath the couch for a few days hoping my parents wouldn’t notice, while I tried to find the last few screws and whatnot. They eventually figured out that the best way to try and contain me was to just give me other things to play with. So I got a computer and they got one of those 201 kits from Radio Shack for me to play with, so I would stop taking apart all of their alarm clocks and stuff.

JT: You know, you can’t get those kits at Radio Shack anymore. It’s very disappointing.

AH: I know. That is really sad. I mean those were really good kits. I mean I really learned a lot from the one that I had, and a couple other ones that were donated to me through friends or my friends’ parents also were really engaging.

JT: So you used to spend a lot of your time deconstructing the security infrastructure that manufacturers put in place. What in particular drives you in that direction?

AH: The deconstruction of security infrastructure?

JT: Yeah.

AH: I mean a lot of it is just — it’s more like if you just put a Rubik’s Cube in front of me, I’ll play with it. It’s kind of the same thing. A lot of it comes from the fact that I’ve actually been taking apart consumer electronic devices for decades now. And I always look at the construction and how it’s built to learn something from it, because that’s basically what I read to figure out the latest techniques for constructioning and costing and part selection.

And when I start seeing someone mentioning security features that have some relevance to the hardware level, I start poking at it some more just because it’s really interesting and you can learn something from it.

JT: And have you ever run afoul of the DMCA or anything similar when you were poking around?

AH: Yeah, the DMCA did create an unfortunate barrier to what was previously legal before it was passed. I had no problems doing this. And then all of the sudden, something that I’d always done and thought was legal and thought was a healthy activity became illegal. And like for example, when I took apart the Xbox in, I think it was 2000, 2001 time domain, DMCA was just been out for like a couple or three years at that point in time. No one had really heard of it. And, of course, the Xbox is a fairly high profile platform. So eventually, I had some help from the EFF and from some very friendly professors at MIT, which was the school I was at the time. And we managed to sort of get me in compliance with DMCA, I guess you could say.

JT: There seems to be a running battle between the users of equipment and the manufacturers, be it jail-broken iPhones or hacked Xboxes. How much control do you think a manufacturer legitimately should be allowed to have over the use of their hardware?

AH: Well, I think that a manufacturer, basically once the hardware leaves the factory, and someone’s paid whatever the market price is for it, then the user owns it, right? So I mean you could take that piece of hardware, melt it down and use it for the component metals if you want, use it for a doorstop. You could use it for something completely other than the computer, that you had not imagined it to be used for. So the hardware itself is pretty much — I kind of believe you buy it, you own it.

And you have all the rights to it that you could possibly want with it, to be applied all the way to the Chumby as well. So we do have a security system in the Chumby, but you have the ability to completely wipe all security keys off of it if you want to. You don’t have to use a Chumby with a Chumby network if you don’t want to. You can go ahead and wipe all of our software off of it. That’s fine. I don’t care.

JT: Isn’t there kind of a fuzzy area though, especially when you get into wireless devices, where some of the restrictions put in place on the devices are there for monetary reasons, but some of them are there for legitimate network control reasons?

AH: Well, I mean a service is a service; a device is a device. Right? There’s two different things we’re talking about here. When you buy a device and you own it, you can do whatever you want with it. The fact that I’ve bought a device doesn’t mean I’m entitled to its service for free. So if you bought a cell phone and you’re subscribing to a service, I mean there’s some network access keys and whatnot. And I mean I can hack my device to get it off of your service. Right? So I’m not tied to AT&T or something like that. But AT&T put up some towers and gives you a service. And you have to pay whatever they believe is the market value for that. Right? I don’t have rights to that tower that’s sitting two miles away from my house to use that without paying someone some fee for using that.

JT: Those of us who have been around the internet enough can remember numerous failed attempts to commercialize internet appliances such as 3Com’s Audrey. What do you think is going to make the Chumby different?

AH: That’s a good question. I’m not an expert at the lore of the failed internet appliance devices. There’s a couple things I think that’s in our favor though is that — we’re more open than a lot of the previous internet appliances, where I’ve seen some of them where they try to create these walled gardens of content that you have to subscribe. You have to do this. You have to do that. We’re sort of more user-centric and we have sort of an open development philosophy for sharing content.

So in other words, we don’t tell you what to do with the internet appliance. It’s exactly what you want it to be. You can hack it and do what you want with it which makes it more useful intrinsically to users. Right? Our business model is more focused on licensing our design out and getting it out there and letting other people who are good at hardware build hardware. And we’ll focus on the service and making sure that your hardware’s actually useful and can do something. So these are different things that other people didn’t do before. And I think it is sort of a cognition that users know what’s best for themselves, right? And also sort of understanding that there’s the hardware piece and there’s the service piece. And they have very different demands on the business. And we’re trying to separate those two so that we have sort of a rational business model around that.

JT: It’s kind of interesting that the space that that device would sit in is being crowded a little bit because when I think about something I might plop down in the kitchen or on a desk, I can say I could get this, or I could spend a little bit more and get one of these new fairly inexpensive Netbooks and get the keyboard, still have the streaming audio, still have all of that. Where do you see the differentiation there?

AH: I think there’s a couple of areas. One anomaly I guess right now is that especially the Chumby device is actually made in fairly low volumes, so the pricing’s not that good on it. The pricing puts it in more of a novelty area. Chumby is in the process of getting its design license to some fairly large hardware manufactures who can get the volume scale necessary and the capital required to get the price down to even lower price points, price points where these Netbooks can’t hit because our architecture’s a lot simpler and our base cost is a lot lower.

And the other thing is also sort of an ease of use issue. I mean people who are, I guess, more on the geek side of things will always be able to take an old PC or a low cost laptop and convert it to do exactly what they want it to do because they know how to install the right bits and pieces, right? One of the things that Chumby really offers to end users is that it’s easy to use. It’s a sort of widget-based service. You have this drag and drop building of channels and the internet radio’s right there. And the services get updated to your computer automatically. You don’t have to deal with these complex updating protocols. There’s no keyboard. It’s a touch screen-based interface. So one of the — I think, the big differences between this and a keyboard-driven appliance is that we do have an easier to use experience. And the other important thing is that the Chumby device, and this is going to get more important over time, all the content’s in the cloud, right?

So it’s sort of like you have this virtual — you yourself are virtualized from the hardware. So if you buy a Chumby picture frame and you stick it in your kitchen and you have a Chumby alarm clock and you have a Chumby account in your computer, they actually all work together with the same Chumby account. You don’t have to configure three separate devices with three separate widget fees and three separate sets of content, each of them unique to that device. Right? We actually run across multiple platforms very seamlessly. And you don’t even notice that you’re on different devices. And that’s another kind of ease of use thing that we have going for us.

JT: The Chumby’s made in China. And you’re going to be discussing the logistics of that at the Emerging Technologies Conference. What are the biggest challenges to producing a product in China?

AH: I think some of the biggest challenges is just there’s a communication issue and there’s sort of an alignment issue about what the product is supposed to do in the end, the vision and so forth. But Chumby itself was a — it’s a little bit different in terms of its industrial design. It has a soft leather case and has electronics on the inside. So trying to explain something that the Chinese guys hadn’t seen before when you don’t have a really good mastery of the language, even though we had a really good firm helping us out, their PCH doing the translation and so forth. It’s difficult to get the ideas across. You have to basically just go out there and sit down with the guys in the factory and just you know, almost playing kind of a charades game, right?

Sort of putting things together until you’re convinced that they actually understand the vision of the product. And then once they actually understand clearly what they’re supposed to be doing, a lot of magic happens over there. And they actually do really good work. But one of the big fallacies of kind of going over there is you’re sort of like, “Well, I just sent them some Gerber Files and a sketch and I’ll get something back. And it’ll be great.” And that’s kind of true for really cookie-cutter products like if I just want a beige box with a circuit board in it and an RJ-45 jack and a power cord. Okay. You can do that. Right? Because they do this all the time. But if you want to do something really different, you really have to kind of be out there on the ground and working directly with the people.

JT: I’m curious how the — I know that the exchange rates have been changing quite a bit over the last few years. How is that affecting the practicality of doing business in China?

AH: It’s a good question. Well, our price quotes are done in U.S. dollars typically. So a lot of times exchange rates actually come out of the manufacturer’s bottom-line depending upon if it’s going in their favor or against their favor. At some point in time, you have to renegotiate things. But there’s exchange rate, but there’s also sort of the factor that the labor is tremendously cheaper in China. The differential is 20 to 40 X between the United States and China for comparable quality of labor. And the exchange rate would have to change a lot to sort of gobble up that difference.

JT: That leads into my next question which is that many people feel uncomfortable buying products produced in China because they worry that they really don’t know what type of conditions the workers experience in the factories. What’s been your experience with this? And how do you feel about it?

AH: So there’s factories and there’s factories in China. There’s definitely bad factories that you don’t want to work with. And there’s ones that are good. And one of the reasons why I like to go out on the floor to China is I like to make sure that all the people that we work with are treated well and humanely, right? So I actually stay in the factory dorms and eat the factory food. So they can’t — I mean there’s things that guys can do still in China to sort of fool me. Like they have a special day when they know I’m coming to the floor and they’ll give them extra special food or something. That’s happened before. But generally speaking, I like to make sure that the conditions are good. And I sleep well at night knowing that we build Chumby in factories where people are actually fairly well taken care of, right?

The standard of living is overall lower in China, so it’s not like — it’s a far cry from, you know, I was reading the other day Boeing union labor gets paid $110,000 a year for machining parts. And they live in Seattle living conditions. And wow, that’s really great. I mean that’s really phenomenal living conditions for manufacturing. But at the same time, if I was paying machinists $110,000 to build Chumby, the price of the device would be four or five X higher just from the labor cost alone, right? It’d be impossible to build in the United States for the price that we get it at. So there’s some tradeoffs to be made there in terms of the quality of living. But that being said, I’d say the quality of living’s pretty comparable to actually like a college dorm in the United States. That’s about what I have to say for that out there.

JT: So lots of Ramen?

AH: Yeah. Yeah. I mean the food is actually pretty good in China. You get cheap food in China. It’s the crowded living conditions and the fact it’s a dorm living condition. The company gives you housing and medical care. And you don’t get really much of a choice. So you pretty much live in a dorm. And you share it with four or five other people. And it’s pretty crowded conditions. But these people are paid relatively well compared to what they have in the fields that they were working in before when they came from the countryside.

JT: At what point is China going to stop being the production center for offshore companies and become the primary designer of goods in the same way that Japan went from being a manufacturing center to being a design center? And isn’t it in China’s best interest to remain basically focused on production?

AH: That’s a really interesting question. And there’s kind of a couple of facets to it. And Japan’s definitely taken some design leadership in terms of building eye-catching really interesting products. The thing is, China has a very productive design population as well, but they’re a little different. If you look at — and this is eye-opening to me as well, right? As we at Chumby have tried to license our product out to more of the large brands that you’ve heard of. I can’t mention any of them specifically. But basically, it’s kind of shocking. The way it works is a lot of these large brands have almost no engineers on the inside. You go buy a product on the shelf. And the U.S. office consists of some product managers and maybe a couple of product engineers. And what they do is they just write kind of a Word document that’s 10 pages long.

They ship it off to China to a factory. And the factory actually does all of the work of taking that sort of sketch and that Word document and turning it into a real product, right? And they’re really good at doing that. And they’re very fast. And they’re very efficient at it. So the thing that sort of the Chinese lack is sort of like market vision. If you ever see a product made by a local Chinese entrepreneur, they’re often times these very nichey sort of almost quirky strange products. You get this kind of Chinglish thing going on where I could see where this could be useful, but it’s just not the right product. So what really is lacking and the reason why China’s sort of viewed as not innovative is they sort of lack the understanding of the American market. And I think they are a little heads down in terms of taking risks in terms of dramatic product design. Like they wouldn’t do quite what some of the more dramatic I.D. companies will do and the really breath-taking good looking things. But they actually do — like a surprisingly large amount of design for very little money.

JT: I have to ask one question just because I’ve been to a fair number of CES’s and there’s always this China pavilion there. And I have to ask, do some of these companies know just how strange the names [of their companies] seem?

AH: [Laughter] You know, I suppose the other way probably goes around as well when the Americans come over and they have really strange names as well. But yeah, they do have some really — Foo King Wah Semiconductor, whatever it is. They do have some really odd names.

JT: I like the ones sort of like the Happy Semiconductor and something —

AH: Oh, yeah, yeah, yeah. Happy and Lucky Semiconductor or Long Life Semiconductor or something like that.

JT: I wouldn’t mind a long life semiconductor, but I’m not sure I need them to be happy and lucky.

AH: Yeah. Yeah. Yeah. In Chinese, those names sound really good. They’re direct translations of the Chinese name to English. It does highlight some of the cultural difference between the U.S. and China. I guess a lot of those guys could use a director of marketing or something like that to figure this out. They certainly don’t have shelf presence, let’s just say, the names.

JT: So why don’t you give us a little bit of a sneak peek of what you’re going to be talking about at the Emerging Technology Conference.

AH: Well, I’m going to try to keep the talk very focused on sort of the multimedia aspect. I’m not going to try and drag you through a lot of the technical details. So it’s going to be sort of a lot of pictures of the line. Some videos. I like to tell stories about the people who are the line as well. Try to humanize these workers. You know, you get these pictures of just like these massive rooms of what looks like just could be robots, but they’re actually people, right? And I like to meet a couple workers and talk to them and get to know them as people. And it really humanizes the whole thing. So I’ll try and tell some stories about that. And try to be candid about the process. And we had some pretty ugly intermediate products.

We had a lot of problems getting the product going. But we also solved all of those problems as well. So try to impart some of that perspective, I guess, on people. It’s really something else to be able to walk in — you know, now when I walk into a Target and I look around, I know like 90 percent of that stuff on that shelf came from China. And I know the kind of machine it came off of, the working conditions it came out of. And it’s a really different prospective actually.

I can’t actually walk through the toy section anymore because toy factories are awful. They’re really — that’s where you get the worst labor conditions these days. And when I walk through a toy section, I can hear the machines cranking away in my head, driving out Tickle Me Elmos or whatever there is on the shelf. And it is kind of a little bit nerve-wracking to see all of that stuff on the shelf and see people just picking them up for $5.00 a piece and not knowing all the effort that went into building it. But that’s sort of the consumer mentality in Americans as well.

JT: I’ve been very good, but I have to ask this question. bunnie?

AH: Oh, yeah. The name. It comes from Monty Python and the Holy Grail where there’s that rabbit with sharp, pointy teeth that everyone runs away from. It was given to me back in middle school because I used to play a lot of roll-playing fantasy-type games. My friends thought it was a hilarious name to give me. It was hilariously inappropriate. That was back in the day when this thing called Bulletin Boards was just coming up and I had to pick a name. So I picked the name then. It was actually Vorpal Bunnie and I had to shorten it to bunnie when I went to college because they didn’t have enough characters for it. And back then, you just never thought that people would call you by your online handle. But it really stuck. And I’ve grown into it, so I like the name.

JT: All right. Well, I’ve been speaking with Andrew “bunnie” Huang, Vice President of Hardware Engineering and Founder of Chumby Industries. He’ll be giving a talk entitled, “Out of China: Manufacturing the Chumby” at O’Reilly’s Emerging Technology Conference in March. Thank you so much for taking the time to talk to us.

AH: Yeah. No problem.

tags: , , ,