Update: China government not expected to issue TD-LTE operating license for the time being [Jan 16, 2012]
While China Mobile has been actively promoting TD-LTE, the China government is not expected to issue a TD-LTE operating license to China Mobile for the time being, according to industry sources.
China Mobile finished initial TD-LTE trials in seven selected cities in China around the end of 2011 and has proposed a second-round of trials, but the China government has not yet approved the plans, signaling the government’s attitude to slow down promotion of TD-LTE in China, the sources indicated.
This is because 3G mobile communication services are taking off in the China market and therefore the government does not want to issue a TD-LTE operating license out of consideration for China Telecom and China Unicom, the sources said.
China in Smartphone Lead [Nov 24, 2011]
China overtook the U.S. as the world’s largest smartphone market by volume in the third quarter, according to a report by research firm Strategy Analytics.
Deliveries of smart phones to operators and retailers in China grew 58% in the third quarter from the previous quarter to 24 million units. That surpassed 23 million units delivered to the U.S. market, down 7% from the previous quarter …
Nokia Corp. had the largest share of China’s smartphone market in the third quarter, with 29%. … Samsung Electronics Co. Ltd. is chasing hard with 18% of the Chinese market …
Strategy Analytics said that China is now at the forefront of the worldwide mobile computing boom and has become a large and growing smartphone market that no hardware vendor, component maker or content developer can afford to ignore. …
Strategy Analytics estimates that 57% of the world’s handsets were manufactured in China in 2010. … two of Nokia’s eight production facilities are based in China and the company said China is also one of its bigger suppliers of mobile handset components.
HSPA+ and LTE Investment Key to Operator Profitability [Strategy Analytics press release, Nov 29, 2011]
In its latest Wireless Operator Strategies (WOS) report, “Outlook & Forecast: How HSPA+ and LTE Investments will save Mobile Operator Profits,” Strategy Analytics projects the impact of HSPA+ and LTE investments on operator margins through 2016. Successful operators will be those who accelerate investment in next generation infrastructure in response to the dramatic growth in Broadband data demand. The race is on to reduce cost per Gigabyte (GB) to match the rate at which revenue per GB is falling. Operators who invest early in next generation HSPA+ and LTE infrastructure will see improvements in gross margins after 2014
VAS and mobile internet in China [Nov 24, 2011]
See as well the slides at http://www.mforum.ru/news/article/099412.htm
China Telcos Announce October 2011 Subscriber Totals [Marbridge Daily, Nov 21, 2011]
China’s three main telecom operators have announced their subscriber totals for October 2011.
October saw the net addition of 12.05 mln new mobile subscribers. China Mobile (NYSE: CHL; 0941.HK) added 5.37 mln new mobile subscribers, pushing the operator’s total mobile user base to 638.89 mln, of which a total of 45.33 mln subscribers used China Mobile’s TD-SCDMA terminals during the month. China Mobile added 2.17 mln new TD-SCDMA subscribers in October.
China Unicom (NYSE: CHU; 0762.HK; 600050.SH) added 3.34 mln new mobile subscribers, bringing its total to 192.38 mln. Of the new mobile subs added, 0.42 mln were GSM subscribers, bringing China Unicom’s total GSM user base to 159.23 mln, and 2.92 mln were WCDMA subscribers, pushing the company’s total WCDMA user base to 33.15 mln subscribers.
China Telecom (NYSE: CHA; 0728.HK) added 3.34 mln CDMA subs, taking its total to 120.29 mln, of which 31.19 mln were CDMA2000 EV-DO subscribers. China Telecom added 2.76 mln new CDMA2000 EV-DO subscribers in October.
Of the combined total of 109.67 mln 3G subs, China Mobile holds 41.3%, China Unicom 30.2%, and China Telecom 28.4%. Of total new mobile subs added in October, China Mobile took 44.57%, dropping its share of China’s total mobile user base to 67.14%. China Unicom’s share of the total mobile user base rose to 20.22%, while China Telecom’s share increased for the 34th straight month, rising from 12.45% at the end of September to 12.64% at the end of October.
China Telecom lost 560,000 fixed-line subs, reducing its total to 170.4 mln, and China Unicom lost 278,000 fixed-line subs, dropping its total to 94.3 mln.
China Telecom added 1.07 mln new broadband subscribers to reach 74.76 mln, and China Unicom added 512,000 new broadband subs to reach 55.05 mln.
According to the EnfoDesk recently released by Analysys International, the number of domestic [mobile] internet users was 369 million in Q2, 2011, with a sequential growth rate being 7.6% and a year-on-year increase of 72.3%.
In terms of 3G mobile Internet, however, there is a huge potential for growth. Taking just the global 3G technology leader W-CDMA against the home-grown TD-SCDMA:
– As at 30 June 2011, the total number of subscribers of the China Unicom reached 181.61 million, an increase of 15.7% over the same period last year. Not much considering that the penetration rate of W-CDMA subscribers reached is still 13.2%. (From: China Unicom (Hong Kong) Limited Announces 2011 Interim Results [Aug 24, 2011])
– For China Telecom (CDMA and CDMA 200 EV-DO for 3G) the total number of subscribers reached 120.29 million, of which 31.19 million were 3G subscribers, i.e. 25.9% of the subscriber base. (From the above Marbridge Daily report)
– Meanwhile at 30 June 2011, the total number of subscribers of the China Mobile reached 616.79 million and the penetration rate of TD-SCDMA subscribers reached 5.7% only. (Here and below from: China Mobile Operation Operation Data – Customer Numbers)
– At the end of October 2011 China Mobile had 638.889 million subscribers and the number of 3G subscribers was still just 7.1% of the whole subscriber base.
– Considering the monthly 3G subscriber data from the corresponding operators (till October 2011) we can clearly see that China Mobile’s TD-SCDMA is not only underperforming against China Unicom’s W-CDMA, but that underperformance is getting worse month after month:
The consequence is that the #1 global operator, China Mobile, is fast moving towards a combined 3G/4G strategy now:
China Mobile will set up 10,000-20,000 additional TD-LTE base stations around China in 2012, according to company vice chairman Xi Guohua.
Under the auspices of the China government, China Mobile has been establishing TD-LTE experimental networks in six cities in China and has set up more than 850 base stations in total, Xi indicated. In addition, 50% of China Mobile’ 250,000 TD-SCDMA base stations around China can be gradually upgraded to TD-LTE, Xi said.
China Mobile has been promoting international adoption of TD-LTE through cooperation with mobile telecom carriers in North America, Europe and Asia, with more than 30 TD-LTE experimental networks completed or under establishment as of the end of October 2011, Xi indicated.
Taiwan-based companies are expected to play an important role in China Mobile’s promotion of TD-LTE, Xi said. For example, Taiwan-based IC design house MediaTek has completed development of TD-LTE/3G and FDD-LTE/3G chips for use in smartphones and Quanta Computer has finished development of TD-LTE network interface cards and TD-LTE-enabled tablet PCs.
TDD Camp Sets Out Global Ambitions [Nov 17, 2011]
“Our belief is, LTE is the next GSM,” Bill Huang, general manager of China Mobile Ltd. (NYSE: CHL)’s Research Institute, told a packed seminar organized by Global TD-LTE Initiative(GTI), the industry body set up to promote the technology.
Huang said that by 2013, GTI’s operator members will have 39 percent of the world’s mobile population covered. “But I think it’s not enough. We can cover 50 percent by 2015, or something close to that.”
He also thinks China Mobile should go head-to-head with fixed-line broadband using TDD, “as long as we can get our costs down.”
China Mobile guided the technology through the 3rd Generation Partnership Project (3GPP) standards process and was instrumental in gaining the support of other influential operators such as Japan’s SoftBank Mobile Corp. , India’s Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and Vodafone Group plc (NYSE: VOD).
In addition, China Mobile helped form the GTI, headed by former GSMA chairman Craig Erlich, and persuaded some WiMax operators, such as Malaysia’s Packet One Networks (Malaysia) Sdn Bhd. (P1) and Australia’s vividwireless Pty Ltd. to climb aboard. (See P1 Joins Global LTE TDD Group, Another WiMax Operator Converts to LTE, Going WiMax to LTE Down Under and GSMA Names New Chairman.)
LTE TDD’s big draw is that it can be deployed by those operators holding licenses for unpaired spectrum, which is currently used to provide WiMax services. FDD’s paired channels work well for voice but are wasteful for data, which is mostly asymmetrical in nature. Additionally, the guard bands in FDD mean up to 30 percent of it is not used, compared with about 10 percent for TDD.
Those capabilities, and the availability of unpaired spectrum, has resulted in a growing interest in LTE TDD — something reflected in the rising prices paid in spectrum auctions, according to Donald Lu, Beijing-based executive director of global investment research for Goldman Sachs & Co.“It’s the unpaired spectrum that has made the difference. The value of unpaired has increased by comparison to paired,” he said.
That said, the majority of awarded spectrum is of the FDD variety: Of the 185 LTE network projects underway globally, just 33 are trialing LTE TDD and of those only about 10 have absolutely committed to the technology, according to the Global Mobile Suppliers Association (GSA). And as Ovum’s McCormick notes, while the FDD players might supplement their existing spectrum with TDD licenses, they’re not going to switch from one to the other.
As a result the global LTE TDD market is not set to be enormous for the coming few years, at least while the ecosystem continues to grow. Goldman Sachs estimates that global LTE TDD capex will total US$15-20 billion during the 2012-2014 timeframe, while 40 million devices will likely be shipped.
China Mobile aims to complete next phase 4G trial by June [Reuters, Nov 15, 2011]
China Mobile expects to finish the second-phase of its fourth-generation (4G) network trials by June, a senior company executive said on Tuesday, as the world’s largest mobile carrier tries to boost its data services to attract high-end users.
China Mobile has built more than 850 base stations in six major cities in China and has made “remarkable progress” in its tests of the new-generation network technology based on TD-LTE platform, Li Zhengmao, an executive vice president, said at an event in Hong Kong. [LTE TDD/FDD International Summit 2011 Hong Kong GTI Summit, Nov 15, 2011]
“With the growing popularity of mobile Internet and smart devices, data consumption is increasing at an explosive speed, which has brought huge pressure to global mobile networks.”
“Under such a situation, the need to speed up the commercialisation of LTE is more compelling.”
China Mobile, the country’s biggest mobile carrier with 633.5 million subscribers — more than the entire population of North America — has been losing out to smaller rivals China Unicom and China Telecom in attracting higher-end 3G users.
China Unicom is the only official iPhone seller among the three Chinese carriers. China Mobile has 10 million iPhone users even though it does not have an agreement with Apple, but iPhone subscribers using the carrier do not have access to 3G download speeds.
Apple has been reluctant to strike a deal with China Mobile due to its inferior homegrown 3G technology called TD-SCDMA.
Apple has promised to make an iPhone compatible with China Mobile’s TD-LTE standard when its next-generation model comes out, the Chinese firm’s Chairman Wang Jianzhou told Reuters last month.
Li said seven telecom equipment makers and threechip makers participated in the first phase of the 4G trial. The Beijing-based carrier has begun purchasing TD-LTE devices, he said.
China Mobile and U.S. 4G operator Clearwire Corp have teamed up to develop high-speed mobile devices and infrastructure. Under their agreement China Mobile will work on chipsets and devices for TD-LTE that both companies are planning on using.
China Mobile and Clearwire Announce Collaboration on TD-LTE Devices [Clearwire press release, Sept 24, 2011]
China Mobile, the world’s largest mobile operator in terms of subscribers, and Clearwire Corporation (Nasdaq:CLWR), a leading provider of 4G wireless broadband services in the United States, today announced a collaboration to accelerate the development of TD-LTE devices. Specifically, the two companies agreed to work together to cultivate a robust device ecosystem that supports multi-mode, multi-band devices with minimum component complexity and cost.
China Mobile and Clearwire both support the global 2.5 GHz spectrum band for 4G deployments along with many other operators around the world. To date, both China Mobile and Clearwire have conducted successful TD-LTE trials and tests using commercially available / production-ready TD-LTE devices from numerous vendors. The two companies will work jointly to further accelerate the time-to-market availability of high volume TD-LTE chipsets and devices that should be commercially available starting in 2012. In addition, the two companies will collaborate to enable worldwide data roaming among TD-LTE, FDD-LTE and other 2G/3G networks.
“The availability and cost of TD-LTE devices are critical success factors for operators to deploy TD-LTE networks,” said Mr. Jianzhou Wang, Chairman of China Mobile Communications Corporation. “The cooperation with Clearwire will leverage economies of scale in the two largest markets in the world to speed up the development of TD-LTE devices. We anticipate the widest variety and most cost effective high performance devices – modems, routers, smart phones and tablets– to provide end users with affordable advanced mobile broadband services.”
“We expect to launch a next-generation LTE network that will offer more capacity than any other 4G network in the United States,” said John Stanton, Executive Chairman of Clearwire. “By working with China Mobile, we fully expect to benefit from a device ecosystem aimed to support billions of potential users worldwide. This unmatched scale should reduce costs and increase choices for our customers in the years ahead.”
Today’s announcement further supports Clearwire’s recent announcement of its intent to add LTE technology to its 4G network. By joining forces on TD-LTE technology, product, deployment and roaming solutions, China Mobile and Clearwire are well positioned to build a viable and competitive TD-LTE ecosystem for the highest demand 4G markets around the globe.
Clearwire gets a boost from China Mobile’s TD-LTE progress [Nov 15, 2011]
In an interview in September with FierceBroadbandWireless, Clearwire CTO John Saw said the primary goal of the partnership is to accelerate the development of a global multi-band, multi-mode chipset that incorporates frequencies between 2.3 GHz and 2.7 GHz. However, because Clearwire’s push into TD-LTE remains on hold while it searches for more funding, China Mobile’s progress is propelling the partnership forward.
The next phase for China Mobile is to have the network running for “large scale commercial” use, and the company plans to launch a network demonstration in Beijing’s main Chang An Street and in the city’s financial district. “4G handsets and data terminals are expected to be ready for mass production next year. We will launch 4G services commercially when both the network and devices are ready,” said Bill Huang, the general manager of China Mobile’s Research Institute, according to Dow Jones Newswires.
Clearwire, meanwhile, has said it needs $600 million to deploy TD-LTE over its mobile WiMAX footprint. Sprint Nextel (NYSE:S), Clearwire’s majority owner and largest wholesale customer, said it may use a portion of the $4 billion in debt it recently raised to fund Clearwire. Sprint also said last month that it signed a non-binding deal with Clearwire to jointly work on LTE network development. The agreement covers cell site selection, site builds, chipsets for devices and is intended to assure seamless handoffs between Sprint’s forthcoming LTE network and Clearwire’s LTE network.
Clearwire CEO Prusch: We Got Our ‘Big Three’ In Sprint Deal [Forbes, Dec 1, 2011]
In an interview with Forbes this afternoon, Prusch was practically gushing about the company’s new multi-part agreement with Sprint, a development that spurred a 14% jump in the company’s stock price today. Just a few days ago, there were worries that the company might decide not to make a $273 million interest payment on its debt that was due today. Today, the company not only made the payment on schedule, it also apparently reached a detente in its fractious relationship with majority owner Sprint.
“This is a significant event, a foundational event,” Prusch said. “This is the springboard for a lot of different things to occur.”
Prusch said the deal achieved three key objectives: it extends the company’s deal to provide WiMax service to Sprint; they got a commitment to support its planned rollout of LTE service over the current WiMax footprint; and they got a commitment for additional equity funding. “We’re excited about it, clearly,” he said, apparently with no pun intended. “It gives us an avenue to get our LTE build completed as we had suggested we wanted to do by the end of 2012 or the beginning of 2013.” It was, he adds, “a very important step” to have the company’s top shareholder getting behind the company’s expansion plan.
Sprint and Clearwire Announce New Agreements [joint press release, Dec 1, 2011]
– Offers Clearwire Up to $1.6 Billion in Conditional Aggregate Revenues and Funding
– Clearwire to Receive Total of $926 Million From Sprint for Unlimited 4G WiMAX Services in 2012 and 2013; WiMAX Network to Operate Through at Least 2015
– Sprint to Provide Support for Future LTE Services
– Companies Agree on Parameters for Additional Sprint Equity Investment
– Clearwire to Pay $237 Million Total Interest for First-Priority, Second-Priority and Exchangeable Notes as Scheduled
OVERLAND PARK, Kan. and BELLEVUE, Wash. – Dec. 1, 2011 – Sprint Nextel (NYSE:S) and Clearwire(NASDAQ: CLWR)today announced agreements potentially worth up to $1.6 billion over the next four years in payments for WiMAX services, possible pre-payments for LTE services and potential equity investments. The agreements further align Clearwire’s LTE network build as a complement to Sprint’s Network Vision strategy.
Also today, Clearwire announced that it has made interest payments totaling $237 million on its first-priority, second-priority and exchangeable notes which were due Dec. 1, 2011.
“These agreements are a result of the technical MOU we outlined during our third quarter results call and extend our relationship with Clearwire,” said Dan Hesse, Sprint CEO. “It provides Sprint improved pricing, allows us to continue to provide WiMAX 4G services to our customers today and to new customers in the future and provides additional LTE capacity to help complement our Network Vision strategy and meet our customers’ growing data demands.”
“Today’s announcement further cements the mutually beneficial relationship between our two companies,” said Erik Prusch, president and CEO of Clearwire. “It is an important step toward meeting Clearwire’s key goals of extending our current 4G network arrangement, securing a commitment to our future LTE Advanced-ready network, and funding the business. We continue to move closer to realizing the full value of our deep spectrum resources as we are uniquely positioned to meet the rapidly growing demand for 4G mobile broadband.”
Wholesale Pricing and 4G Availability
The agreements modify prior wholesale pricing agreements and provide Sprint with unlimited access to Clearwire’s WiMAX network to meet its growing 4G data demands. Under the terms of the agreements, Sprint will pay Clearwire a total of $926 million, approximately two-thirds of which will be paid in 2012, for unlimited 4G WiMAX retail services during 2012 and 2013, subject to certain conditions. The agreements also establish long-term usage-based pricing for WiMAX services in 2014 and beyond. Sprint will have access to Clearwire’s WiMAX network through at least 2015. Sprint plans to continue selling WiMAX devices with two-year contracts through at least 2012 and support those devices through the life of the contract.
In addition, the agreement contains separate, competitive pricing for re-wholesaling by Sprint that provides flexibility for Sprint to grow its 4G WiMAX wholesale business while at the same time providing Clearwire increased pricing flexibility that should allow Clearwire to grow its wholesale markets and attract new customers.
The agreements also lay the foundation for the deployment of Clearwire’s planned LTE Advanced-ready overlay network and outline the terms for Sprint to gain access to the additional LTE capacity. The TDD-LTE rollout will capitalize on Clearwire’s deep spectrum resources to deliver on 4G capacity needs over the long-term. Under the terms, Sprint will pay Clearwire up to $350 million in a series of prepayments over a period of up to two years for LTE capacity if Clearwire achieves certain build-out targets and network specifications by June 2013. The agreements also establish long-term usage-based pricing for LTE services for 2012 and beyond. The companies have agreed to collaborate on a network build plan and will jointly select LTE macro-cell sites to cover Sprint’s high usage area “hotspots.” Clearwire plans to seek additional funding before initiating the build-out of its LTE Advanced-ready network.
In addition, Clearwire and Sprint will work collaboratively to support the ecosystem for TDD-LTE in Band Class 41 for devices, chipsets and standards. Subject to the timing of the build-out and other factors, Sprint expects to launch devices including laptop cards and phones that will utilize Clearwire’s TDD-LTE network in 2013.
Sprint has committed to providing additional equity funding to Clearwire in the event of an equity offering. If Clearwire raises new equity between $400 and $700 million, Sprint will participate in the offering on a pro rata basis up to $347 million, consistent with Sprint’s current voting interest of 49.6 percent on the same terms and conditions as other participating companies.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel served more than 53 million customers at the end of 3Q 2011 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Newsweek ranked Sprint No. 3 in its 2011 Green Rankings, listing it as one of the nation’s greenest companies, the highest of any telecommunications company. You can learn more and visit Sprint at http://www.sprint.com or http://www.facebook.com/sprint and www.twitter.com/sprint.
Clearwire Corporation (NASDAQ:CLWR), through its operating subsidiaries, is a leading provider of mobile broadband services. Clearwire’s 4G network currently provides coverage in areas of the U.S. where more than 130 million people live. Clearwire’s open all-IP network, combined with significant spectrum holdings, provides an unprecedented combination of speed and mobility to deliver next generation broadband access. The company markets its 4G service through its own brand called CLEAR® as well as through its wholesale relationships with companies such as Sprint, Comcast, Time Warner Cable, Locus Telecommunications, Cbeyond, Mitel, Best Buy and United Online. Strategic investors include Intel Capital, Comcast, Sprint, Google, Time Warner Cable, and Bright House Networks. Clearwire is headquartered in Bellevue, Wash. Additional information is available at http://www.clearwire.com.
GSMA: Dual-Mode a Must for LTE Devices [Nov 16, 2011]
For Long Term Evolution (LTE) to succeed, it’s “absolutely critical” that devices be able to support both the TDD and FDD versions of the next-generation mobile technology, according to GSM Association (GSMA) Director General Anne Bouverot.
Bouverot told a conference held by the Global TD-LTE Initiative (GTI), an industry group promoting Long Term Evolution Time Division Duplex (LTE TDD), that it was not enough just to get the products to market.
The chipsets are the key. Only four chip vendors — mostly startups — designed and built TD-SCDMA chips, points out Bill Huang, general manager of China Mobile Ltd.’s Research Institute.
Now, though, around 16 chip specialists, including Qualcomm Inc. (Nasdaq: QCOM), ST-Ericsson and Sequans Communications , are doing “various kind of baseband” for LTE TDD, Huang stated.
To date around 35 LTE TDD terminals (mostly data cards or MyFi-style hotspots) have been developed, while ZTE Corp. has already produced a dual-mode card.
But Huang said the problem is not whether the two 3GPP standards will be combined into one chipset, but whether the chips can support all the required spectrum bands. “The question is: What spectrum from TDD or what spectrum from FDD that [the chip] will support?” stated the China Mobile man. “We now have six spectrum bands identified that will cover maybe 80 percent of the world — we may increase that to eight bands to get 100 percent coverage.”
According to data provided by China Mobile, the internet giants, that’s to say Tencent, Baidu and Sina, have become the leading players in the mobile internet market, boosting traffic levels and overtaking the pioneering pure mobile internet players in their respective sectors (See Exhibit 1 below).
Exhibit 1: Traffic of the Top Fifteen Mobile Internet Players (Unit: TB)
Note: 1) By China Mobile we mean related sites such as the Monternet homepage, reading and Mobile Market sites. 2) The highlighted companies are internet players who aim the bulk of their services at the traditional PC-based internet.
Source: China Mobile. Figures are based on traffic data for Fujian, Guangdong, Henan, Jiangsu and Shanghai in August 2011 and August 2010.
In the portal sector, both Tencent and Sina have supplanted 3g.cn, the previous market leader specifying on WAP portal. Sina, it should be noted, lagged a long way behind 3g.cn a year ago in terms of traffic (15.1 TB vs. 28.5TB). In the search market, Baidu and Soso more than doubled their traffic within a year and are now much larger than Easou, once the market leader. Easou’s traffic shrank to less than 50% of its previous level. Ecommerce is also extending from internet to mobile internet space. Taobao, the dominant B2C and C2C site, China’s third largest internet site in terms of traffic, secured itself 14th place in the mobile internet industry in August 2011, proof of a dramatic take-off in traffic. Furthermore, transaction volume has also rocketed. Unveiled in 2009, Taobao’s mobile site expects to have a turnover above RMB 10 billion in 2011, up from RMB 1.8 billion and RMB 0.25 billion in 2010 and 2009 respectively.
There are three main reasons for the significant changes in the past year:
- Internet applications and content perform much better on the large-screen smartphones and tablets that have come into widespread use in the past two years. The launch of the iPhone proved to be a critical turning point. Users now find little difference between accessing websites through a PC and through portal devices.
- Internet giants are eagerly promoting services/applications for mobile users. For example, Tencent has launched various SMS+IM packages leveraging its 700 Million strong QQ user base, and Sina has invested heavily in its SMS+weibo (twitter type) service.
- Pure mobile internet players lack differentiation and diversification. Pioneer mobile service providers, for example 3g.cn and Easou, rely totally on mobile ads on WAP sites or search portals. They lack product lines such as SNS, IM, or games which feature high user stickiness.
Among above mobile internet companies, there are a few exceptional cases which are still well positioned and report strong uptake:
- UCWeb has maintained No.2 position thanks to its popular mobile browser. Despite the rapid growth of various App Stores, the mobile browser is still the main access point for mobile internet content. Tencent has in turn unveiled its QQ browser, aiming to gain some share of the market.
- The mobile SNS site Lexun has remained the leader in this sector, unaffected by rapidly growing internet SNS services, such as Renren and Kaixin. However, overall traffic growth on mobile SNS sites remains flat, in contrast to the significant take-off of the mobile internet as a whole.
Looking forward, mobile internet market will see fiercer competition and more players expanding to mobile internet sector with their popular internet applications.
China’s app growth is up by 840% in 2011 [Nov 4, 2011]
Analyticsfirm, Flurry, found that China has had an 840% increase in app usage during this year. The growth is four times more than the rate experienced by other countries.
The country now ranks behind the United Statesin the stakes to become number 1 in the apps market.
Countries within Asiawere also featured in the top 10 of biggest growers, with India at 398% and Thailand at 351%.
China’s growth could be due to the country’s increasing affluence for middle class people, meaning more people are starting to own smartphones.
Peter Farago from Flurry said: “While the top 100 countries are averaging session growth of over 200%, China is delivering more than four times this growth rate, spurred by a massive population voraciously adopting applications.”
Flurry also found that the United States have suffered a decrease in activity, meaning China could overtake the country in the bid to be the top country for app usage by 2013.
The findings are based on the number of customers that downloaded apps from their country’s store, along with how long customers spend on the apps stores.
Farago continued: “As one of the fastest modernizing and largest countries in the world, the adoption of mobile apps in China is unprecedented. Whether studying China by existing app session generated or new demand for apps, the growth rates are similar.”
To learn more about the future of multiplatform apps and how marketers, developers, businesses, brands and operators are benefiting from the market’s rapid growth, visit www.apps-world.net/europe on 29-30 November in London and hear from leading global brands and industry experts.
About 35 percent of urban Chinese use smartphones, the third-highest level in the world, a survey has found.
China’s smartphone adoption rate follows Singapore’s 62 percent and Australia’s 37 percent, according to the survey by Google Inc and research company Ipsos, which was based on 30,000 interviewees from 30 countries and regions.
“If you consider that the device didn’t exist more than five years ago, the fact that already one-third of the population in the cities has it is actually quite remarkable,” said Ryan Hayward, Asia-Pacific mobile product marketing manager of Google.
“When we look back at how long it took for people to adopt radio and TV, I doubt that one in three had them within four years. That just didn’t happen.”
The survey covered 2,000 people in seven large cities: Shenyang, Beijing, Shanghai, Xi’an, Chengdu, Wuhan and Guangzhou.
“People living in first- and second-tier cities change their mobile phones relatively often,” said Wang Ying, an analyst with domestic research company Analysys International.
“Economic development in the cities has spurred residents’ demand for smartphones, which in turn, led to mobile carriers’ initiatives to promote smartphones,” she added.
Urban Chinese consumers are also most likely to own multiple mobile phones, whether smartphones or regular feature phones. One out of three people in urban China have at least two smartphones, a proportion that is the highest in the Asia-Pacific region, according to the report.
The wide adoption of smartphones has been partly boosted by China’s construction of a third-generation (3G) networks, which which have improved the user experience for smartphone owners with higher speed.
China had more than 100 million 3G users at the end of September, representing more than 10 percent of total mobile phone subscribers, according to the Ministry of Industry and Information Technology.
The smartphone adoption level is probably less than 20 percent nationwide, however, taking less-developed cities and rural areas into account, said Wang. The market needs to be further tapped as these areas gradually adopt 3G networks and people there change mobile phones.
In areas that require advanced technology, such as cloud computing, the US will continue to be a leader for a long time. But in other areas, such as social applications, games and mobile Internet services, there will be promising companies emerging in China in the coming years, Kai-Fu Lee, former head of Google China, said last month at an industry forum in Beijing.
A senior expert said Monday that China will take greater strides in promoting the development of its mobile Internet sector.
Wang Xiujun, chief engineer of the Ministry of Industry and Information Technology (MIIT), said that the government will step up policy support for mobile Internet because it “promotes industrial integration and leads to revolutionary changes in development and technology.”
Wang said the country will speed up comprehensive upgrades for its information networks and boost the development of third-generation technology (3G), especially homegrown TD variants of 3G and LTE (long-term evolution) technology.
Along with the development of information networks, the innovation and development of integrated technologies and businesses should also be highlighted, Wang said during the ongoing fifth International Mobile Internet Conference, which opened Monday in Beijing.
Wang said that the Chinese government will attach more importance to the protection of users’ personal information and their rightful interests and maintain a healthy environment for the development of the mobile Internet sector.
The two-day meeting is sponsored by China Mobile, the world’s largest telecommunications firm by number of users.
“The development speed of mobile Internet is far quicker than what we imagined. Mobile Internet is becoming a reality, and is deeply changing our habits and behaviors,” a statement on the firm’s website said.
The statement said mobile Internet has also had a great impact on the traditional operation and business modules of the mobile telecommunications industry.
MIIT data showed that the number of Chinese mobile phone users hit 952.31 million by the end of September, 102.46 million of whom are 3G users.
According to the China Internet Networks Information Center (CNNIC), the number of netizens in China reached 485 million by the end of June this year. As of the end of 2010, the number of people who accessed the Internet through mobile phones had already reached 303 million.
Mobile Internet users are even expected to outnumber those who access the Internet through computers next year, according to Enfodesk, a think tank engaged in researching of new media economics in China.
Li Zhengmao, China Mobile’s vice president, said the production of smart mobile phones has jumped 50 percent year-on-year globally. Li added that the continuous development and deepened applications of 3G and LTE technologies means that mobile Internet has entered a new phase for rapid growth.
With more than 630 million subscribers, China Mobilehas been pushing for the country’s homegrown 4G standard, known as TD-LTE, or “Time Division-Long Term Evolution,” to become a globally accepted standard.
Huang Xiaoqing, who heads China Mobile’s telecommunications research institute, said the TD-LTE technology will substantially lower bandwidth costs. He said the technology will provide faster broadband wireless services to meet future demand that the current 3G network would be unable to deliver.
China Mobile also announced Friday the incorporation of a new company to accelerate its development of 3G and smartphone technology.
The subsidiary, China Mobile Terminal Co Ltd, will handle customization, testing, procurement, sales and service for the group’s third-generation (3G) devices. The new firm will also speed up the research and development of TD-LTE.
According to the data of iResearch, market scale of mobile Internet reaches to 10.83 billion in Q3 2011, up 154.6% year-on-year and 38.9% quarter-on-quarter. Meanwhile, growth rate of mobile Internet increases nearly 18% compared with last quarter.
iResearch views competition among mobile devices and mobile operation systems is more fierce, which will accelerate popularity of smart phones and lead growth rate of mobile Internet to a new peak. Besides, traditional Internet enterprises all invest more in mobile Internet, and new applications and commercial modes also attract more companies to participant in the mobile Internet market, which helps growth of the market segments.
Changing track of mobile Internet segments in Q3 is similar to Q2 2011. Share of mobile value-added service market in the mobile Internet will further fall to 43.7% while share of mobile ecommerce obviously become bigger, up to 34.8% from 27.9% in the second quarter. Moreover, with higher awareness of advertisers, development of mobile advertisement network enterprises and increasing number of mobile device users, market scale of mobile advertisement rises to 10.3% from 9.5% in the second quarter. In the other segments, mobile value-added service, mobile games and mobile search develop steadily and their share falls slightly. Mobile Internet market segments will face balanced development.
Mobile value-added service increases 17.7% quarter-on-quarter, which is attributed to the following reasons: Firstly, mobile operators enhance the development of value-added service and pay more attention to product integration. Secondly, a variety of new applications such as mobile reading, mobile instant messaging and location based service develop rapidly and bring more revenue. Therefore, iResearch considers new applications in the mobile Internet develop well and have more users while most commercial modes aren’t mature. As a result, new applications don’t do much contribution to mobile Internet.
Mobile ecommerce maintains strong growth, up 508.1% compared with Q3 2010. It has become a main driving power for the growth of mobile Internet owing to the following reasons: Firstly, traditional ecommerce websites have operated mobile terminals and increased marketing efforts in order to attract a large quantity of users to generate buy deeds. Secondly, some large B2C websites support cash on delivery (COD) instead of mobile payment, which solve the payment problem of many users. Finally, applications of mobile ecommerce more efficiently improve users’ experience and maintain the relationship with clients. Therefore, iResearch holds China mobile ecommerce has showed a trend of accelerated development in Q3 2011 and its share will continue to increase in the future.
As the mobile phones jump into the third generation from the second generation, mobile advertisement as a new marketing method is developing in the content and form. Up to now, advertisers have more mature awareness of mobile advertisement and companies, which provide free applications depending on advertisement platform, achieve profitability. Traditional Internet enterprises expand their business to mobile Internet, producing new demand of marketing and motivate development of mobile advertisement.
Based on the state of mobile Internet market in the third quarter, iResearch views mobile Internet market will continue to rapidly increase in the fourth quarter 2011. In mobile Internet segments, share of mobile ecommerce will expand and Q4 market scale of mobile ecommerce will keep growth rate of 90% or more because mobile ecommerce is attached much attention by traditional ecommerce enterprises and users have gradually cultivated the habit of mobile online shopping; Mobile advertisement will rapidly grow in the process of exploration because it has solved the problem in the profit model of mobile medial even though it remains in the initial stage; Traditional mobile value-added service will develop steadily; Mobile reading and mobile video remain in the search of profit model and may give initial result in the fourth quarter; Mobile games will have a slower growth compared with other mobile Internet segments.
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CNC report from Beijing [Sept 15, 2011]
By the end of 2010, cell phone internet subscribers reached 303 million in China – accounting for 66 percent of total internet users in the country.
Weibo is China’ s version of Twitter.
It’ s the most popular online social media site in the country. And, one of the major reasons many people in China began logging on more frequently.
As of June, the number of Chinese people using Weibo and other blog sites reached 195 million – an increase of 209 percent in just one year!
And, just like Twitter, many users have become addicted.
TITLE: THE FUTURE OF MOBILE WEB IN CHINA
Some of the most influential leaders of the mobile internet industry in China recently gathered in Beijing for the China Mobile Internet Industry Investment Forum.
Mobile internet is quite new in China.
In fact, it wasn’t introduced until 2009.
As a result, some people in the country are weary of the new technology.
Education is key, but something many people won’t receive until they can afford to try out the technology.
And, the cost of mobile internet in China, is preventing many people from making the purchase.
SOUNDBITE(CHINESE): HOU WEIWEI, OFFICE STAFF
“It costs me about 3 US dollars per month for a 250 Mbyte package. I have to pay extra bills if I surf the net too much, so I would have to go to places that offer free Wi-Fi.”
The cost of the service isn’t the only complaint from customers.
Many people don’t like the high cost of apps that are needed to take full advantage of mobile technology.
Price. Education. And, other hiccups in the expansion of the mobile internet industry are constant topics of discussion at events like the China Mobile Internet Industry Investment Forum.
The number of mobile internet users in China is expected to reach an estimated 800 million people within 5 years!
China Internet Network Information Center released the <<28th China Internet Development Statistics Report>>, as of June this year, China’s mobile phone users reached 318 million, accounting for 65.6% of the total number of Internet users. Most of the increase in business class application remains such as the online shopping rate increased to 35.6%, 12.15 million new users six months, the user growth rate of 7.6% in six months.
BEIJING–(BUSINESS WIRE)–Mobile Internet, an integral part of the new-generation information technology, has been recognized as one of China’s strategic emerging industries and given priority by China’s Ministry of Information and Technology in its 12th Five-Year Plan scheme. As such, CCID Consulting has drawn a map of China’s mobile Internet industry in the coming years based on analyses on its current characteristics and growth trends.
“One Belt (the Circum-Bohai Sea, the Yangtze River Delta and the Pearl River Delta in a line) Plus One Triangle (the West Triangle)”
Equal Strengths in South and North with Rise in West; Guangdong Province Taking the Lead
In 2010, China’s mobile Internet industrial recorded an output value of RMB 293.69 billion, to which the four major regions, namely the Pearl River Delta in the south, the Circum-Bohai Sea in the north, the Yangtze River Delta in the east and the West Triangle centered on Chengdu, Chongqing and Xi’an, contributed over 90 percent.
Figure 1 China’s Mobile Internet Industry Size
Source: CCID Consulting Mobile Internet Industry Database, May 2011
In China, Guangdong Province is the champion in the mobile Internet industry with an annual output value of more than RMB 100 billion leveraging its strength in terminal manufacturing; the Circum-Bohai Sea is China’s second largest mobile Internet base with significant strengths in mobile terminal manufacturing, mobile Internet software and services; the Yangtze River Delta is also of great importance to China’s mobile Internet industry, which is strong in mobile Internet-related software and services, but relatively weak in terminal manufacturing; the West Triangle is enjoying the greatest growth potential in China’s mobile Internet industry.
“One Belt Plus One Triangle”
The layout of China’s mobile Internet industry is described as “One Belt (the Circum-Bohai Sea, the Yangtze River Delta and the Pearl River Delta in a line) Plus One Triangle (the West Triangle)”. The major cities on “One Belt Plus One Triangle”, including Beijing, Guangzhou, Shenzhen and Hangzhou in the east and Chongqing, Chengdu and Xi’an in the west, are all well equipped in industrial development conditions to support the mobile Internet industry
Figure 2 Key Cities of China’s Mobile Internet Industry
Source: CCID Consulting Mobile Internet Industry Database, May 2011
Overall Development with Highlighted Clusters and Evolution in Echelons in Future
In the coming decade, China’s mobile Internet industry will usher in an age of overall development as its industrialization advances to facilitate the transformation of the telecommunications and Internet industries, while the existing industrial clusters will remain the focuses of the industry.
Meanwhile, the evolution of the mobile Internet industry will feature multiple echelons at different growth levels. The first echelon will include the Circum-Bohai Sea, the Yangtze River Delta and the West Triangle, with Beijing, Shanghai, Hangzhou, Shenzhen, Guangzhou, Chengdu, and Chongqing staying in a leading position in the fields of mobile terminal design & manufacturing, mobile software and application R&D. Wuhan, Zhengzhou, Changsha, Xiamen and other second-tier major cities located in the second echelon of Wuhan-Changsha Cluster and the Western Taiwan Straits Economic Zone will specialize in mobile terminal manufacturing and mobile software and application development. Other provinces and regions including Yunnan, Guangxi, Shanxi, Inner Mongolia, Gansu and Ningxia will start with infrastructures construction and promote mobile Internet applications with the local governments and operators playing a major role.
Mobile Terminal Manufacturing Sector to Shift to Lower-cost North and West
As the comprehensive cost in coastal cities stay high, the cost-sensitive mobile terminal manufacturing sector has accelerated its shift to Central and Western regions with lower labor and operation costs. For example, the leading OEM Foxconn has shifted part of its capacities to Henan, Shandong, Sichuan and Chongqing. In addition, the related upstream and downstream sectors including chip manufacturing and mold manufacturing will follow the same trend.
Mobile Software and Application Sector to Continue Relying on Industry-Academy-Research-Application Chain
The mobile software and application sector, both intelligence-intensive and capital-intensive, requires educated and highly skilled talents, innovative technologies as well as high market-penetration of software and applications. Hence, of the sector will continue to focus on major cities in the first echelon where the industry, academy, research, and application forces are tightly integrated.
About CCID Consulting Co., Ltd.
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China. With its powerful industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services. The company’s customers range from industrial users in electronics, telecommunications, energy, finance and automobile to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming China’s No.1 advisor for enterprise management, No.1 consultancy for government decision and No.1 brand for informatization consulting.
New China-made smartphone unveiled [Xinhua, Aug 30, 2011]
A new smartphone made by a Chinese high-profile Internet startup has the potential to shake the world’s largest mobile phone market driving prices down for high-performance handsets.
The low-cost but high-specification phone was unveiled by Lei Jun, founder of Xiaomi Technology Co. that produced it, at a presentation in Beijing on Aug. 16.
Xiaomi Phone, which runs a MIUI ROM on top of Android, is 125mm x 63mm x 11.9mm in size and weighs 149 grams — so it’s both a little heavier and bigger than the iPhone 4.
Lei said that his phone stands out with its fast dual core processor, big screen, high-quality signal, and large battery capacity.
But most impressively perhaps is its 1,999-yuan (313 U.S. dollars) price tag, 3,000 yuan cheaper than the iPhone 4.
“The success of Apple encourages others to follow suit. It has become a trend to promote platforms with terminals and promote App stores with platforms. The question is whether somebody else can be the winner after Apple,” said Sun Taoran, the founder of e-payment service company Lakala.
Lei, also board chairman of Chinese software company Kingsoft, has dismissed comparisons by Internet users between him and Apple’s just-retired CEO Steve Jobs, saying on his microblog that he didn’t imitate Jobs in clothing and “Jobs’ charm is matchless.”
But he did compare his phone with the iPhone several times during the product’s launch.
A total of 16.81 million smartphones were sold in the Chinese market in the second quarter of the year, up 7.5 percent from the previous three months, according to the IT consulting firm Analysys International.
Analysys has said that the number of smartphones sold in China could reach 95 million for this year.
Phones produced by Taiwan-based company HTC, Lenovo’s LePhone and the iPhone are among the best sellers in China.
Lenovo claimed recently in a report that it sold 34 percent more cellphones in the first quarter year-on-year. Its 2,900-yuan LePhone has been selling well, and, according to recent reports, through its sales the company holds a 10 percent share of the middle and high-end domestic smartphone market.
Also, Lenovo this month unveiled its second smartphone, the A60, which has a 88.9-mm touch screen and uses the Android 2.3 operating system, priced at 959 yuan.
But the real change in China’s smartphone market is that domestic Internet firms are starting to compete in it.
Last month Alibaba.com, a major Business-to-Business electronic commerce company, released its smart phone which runs “ALI cloud” OS.
Also, China’s online search giant Baidu is planning to launch its own mobile phone OS Qiushi.
And the country’s leading web-portal Tencent is also working on its own brand Qphone mobile phone and operating system, according to Beijing-based International Herald Leader newspaper.
“The companies including Alibaba, Tencent and Baidu have successfully produced PCs. However, as people are spending more and more time on mobile terminals, their influence could decline,” said Li Yi, secretary general of the China Mobile Internet Industry Alliance.
Competition in the smartphone market may get fiercer as international competitors look to grab a bigger slice both in China and worldwide.
Google Inc. has agreed to buy Motorola Mobility Holdings Inc. for about 12.5 billion U.S. dollars, the largest purchase for the Internet search giant that will allow it to compete more directly with other mobile phone makers.
By the end of the first quarter this year, Nokia, Apple and RIM, the leading three smart phone producers enjoyed more than a half stake in the global market. And it is estimated that more than 100 million smartphones were sold worldwide in the first quarter this year.
But, so far, Chinese companies have only captured a small piece of the global market.
Zhu Junmin, a Beijing-based telecom expert, said domestic companies’ smartphones are still lagging behind in terms of designing. “Foreign brands do better in industrial and user-oriented designing. Lack of innovation makes domestic companies to have to follow and imitate.”
Ma Zihui, chief economist of Samsung Economic Research Center also expressed his worries about the lack of novelty of domestic companies. “Without creativity, a company can hardly compete with foreign counterparts and make ideal profits.”
For many months now, Beijing’s swankier cafes have been filled with people perusing the Internet not on a laptop computer but on their smartphones.
However, while the mobile Internet has taken off in China, it has remained dominated by foreign platforms, such as Apple’s iPhone OS, Google’s Android and RIM’s Blackberry – until now.
That could be set to change as Chinese companies prepare to launch their own operating systems (OS), with two Chinese companies launching smartphone OS products this month alone.
Xiaomi Tech, a high-tech company set up in April last year, launched MIUI, a system based on Android, on July 8 and plans to launch its own MIUI mobile phone – the M1 – in September. It is a new system with more than 100 personalized services, including free voice call options.
Xiaomi’s founder and CEO Lei Jun, who is also chairman of Chinese software developer Kingsoft and an angel investor in the mobile Internet sector, announced on July 12 that the company had attracted $41 million investment from Morningside Group, Qiming Venture Partners and IDG Capital. The company is valued at about $250 million.
Alibaba Group, China’s e-commerce giant, launched its Ali Cloud Mobile OS Thursday. The Ali Cloud Mobile OS uses cloud computing technology and not only uses Alibaba Group’s own text input software, search engine and e-mail, but also embeds its business services, such as group-buying business Juhuasuan, online retailing marketplace Taobao.com, mobile instant messaging service Ali Wangwang and online buyer community Taobao Girl.
The OS provides users with 8GB storage volume on the phone and over 100 GB storage space on the company’s cloud server side. Users don’t need to download software or applications, they just register to enjoy various applications developed by the company and other developers based on Android OS, with software and applications stored and run on the cloud server side.
Though China’s biggest Internet company Tencent has so far denied that it is developing its own smartphone OS, industry experts believe it is working on one.
“Tencent did a lot of market research on users’ expectations for its QPhone since 2009. Tencent hopes the QPhone brand can cover both the high-end market to compete with iPhone and Google’s Android phones and low-end market to compete with Nokia in China,” a Tencent marketing official said, requesting anonymity.
Tencent partnered with Intel in April 2010 to cooperate on Intel’s smartphone OS MeeGo. Tencent will carry out its own research and development based on the MeeGo OS to make it more suitable for the Chinese market and Tencent’s products and services, which in other words means MeeGo will be used in Tencent’s QPhone.
China’s biggest search engine Baidu also has plans for a smartphone OS. Rumors have swirled since last July that Baidu will launch its Android-based smartphone OS in November this year.
China Mobile started earlier than the country’s Internet giants. It put its OMS (Open Mobile System) into commercial use in 2009. Currently many handset manufacturers produce customized terminals using the system for China Mobile, including Motorola, HTC, Lenovo Mobile and Dell.
But why are so many big companies rushing to enter what is already a fiercely competitive sector?
“Smartphone OS is the way forward in the mobile Internet industry. Just like the importance of the PC-based Windows OS for the Internet industry, how the smartphone OS field develops is very important for the future market structure and competition pattern,” Chen Yanshu, analyst of IT market research company eShip Consulting said.
Once a company has the advantage in the competition between the different smartphone OS, it can attract more users and application developers and develop new business models based on these resources.
“Selling applications to users through mobile phone application stores is a popular business model now. If a company’s smartphone OS gains more support from users and developers, it will attract more and more other users and developers, which means it has more potential buyers,” said Chen.
“Handset manufacturers, telecom operators and application developers will all cooperate together. But in the ever-changing mobile Internet sector, more and more business models will appear. No one wants to miss this chance. So they have all started to develop a smartphone OS to try to occupy the entrance.”
However, achieving market-leader position is far from easy.
“Currently, the competition in China’s smartphone OS area is happening in two dimensions, between industries and between domestic companies and international giants,” Chen said.
Domestic IT and Internet giants are very active in developing smart phone OS because they own a lot of content and applications.
Alibaba Group has established a sound ecosystem in its e-commerce business, which has 370 million registered C2C buyers and sellers, an excellent online payment system, widely used instant messaging services and many others. But the company is looking to shift all this onto the mobile Internet via a smartphone OS.
Tencent has 647 million users of its instant messaging service QQ. Its online community, microblogging, online shopping mall and online games can also be migrated to mobile Internet. The same is true for Baidu’s search engine, map service, location based services, video broadcasting service and so on.
But the difficulties for IT and Internet companies are huge.
“The mobile Internet is very different from the standard Internet. On the standard Internet, things are more open and a company can get users only if it provides excellent products and services. But in the mobile Internet industry, there are many more participants, such as telecom operators, mobile phone chipset manufacturers, mobile phone designers and manufacturers and application software developers,” said Chen.
“The competition is not simply in better products and services to users, but also related to partners, negotiation ability, the business ecosystem construction and many others. This is a new problem for IT and Internet giants. Just copying what they did in the past won’t get them success.”
China’s domestic mobile phone manufacturers are not as strong as international giants such as Nokia and Google and have lagged behind in developing a smartphone OS, according to Chen.
“They cooperate with telecom operators. Lack of power is one reason. Another reason is that traditionally the telecom operators are at the top of mobile Internet industry. The mobile Internet is accessed over their networks. They have big influence on the industry. But what they don’t have is what the IT and Internet giants do have – content and applications,” Chen said.