Those countries have connection speeds on the order of 10 to 20 times faster than what we enjoy in the U.S.
In a Time Magazine article Gary Rieschel from Mobius Venture Capital says,
"A lot of investment overseas is based on technology that is way ahead of the laptops or desktops that we use. I don't travel with a laptop anymore. My shoulder is two inches lower than other one after 15 years of traveling with it, but it is not necessary anymore. I carry a device made by Danger that has e-mail, a keyboard, phone camera, calender, games, and instant messaging. Only a venture-backed company could be named Danger.
Everyone in Japan uses their cell phones for data; in China, about 70%. Cell phones are fashion statements, and people buy new ones every six to nine months. Shanda Interactive which operates online games, went public last week in New York. It generates $33 million a year in profit just three and a half years into its existence. The funniest example of a niche market is Neowiz, which sells virtual clothing for the virtual person you steer through cyberspace. That's a $100 million a year market. Profit margins are pretty good on virtual clothes. Ring tones for cell phones is now a billion-dollar business. Technology is fashion.
We talk about how great it will be to have high-speed-Internet connections across the U.S. For the moment, the average connection for broadband here is under 300 kilobits per second. Compare that with average connection speeds in Korea of 4 megabits per second and up to 8 megabits per second in Japan. Those speeds are driving innovations that we can't compete with here. So when you begin to fund an information-technology start-up here...and you won't know if you're successful or not for four or five years...it is incumbent for us to understand what is happening in China."
From a Time Magazine article by Eric Roston, "Start-Up Your Engines!" - Time June 7, 2004.
