Open Source OS Assists Chinese Development of the Smart Phone Market
Published on: 5th September 2008
A report from Chinese research firm, CCID Consulting shows that the sales volume of smart phones in China's market in the first half of 2008 reached 15.671 million sets, up 32.1% over H1 2007, and the sales revenue reached 37.74 billion Yuan, up 25.7% over H1 2007.
At present, Symbian, Windows Mobile, and Linux are the three main operating systems in China's smart phone market. CCID Consulting statistics show that these three operating systems have occupied a market share of more than 90%. On the other hand, Google, the tycoons of the Internet industry, together with 34 enterprises including IC providers, mobile phone manufacturers, and operators, will release the open source system Android by the end of 2008, which indicates the inevitable openness of mobile phone operating systems.
Open source operating systems will promote the development of smart phones. First of all, IC providers will benefit from an open operating system, by which IC providers can take software features into account when designing hardware. Secondly, third party software providers can provide more applications over an open operating system. Thirdly, an open operating system will help to reduce the production costs of mobile phone manufacturers. Hence, terminal manufacturers, IC providers, as well as operators all focus on open source operating systems, from which the development of the smart phone industry will benefit.
Nokia Takes a Leading Position in the Smart Phone Market
After its recent Symbian acquisition, Nokia strengthened its leading position in the smart phone market. Firstly, Nokia has occupied a market share of 68.5% in China's smart phone market. The sales volume of Nokia smart phone reached 10,712 thousand, up 43.8% over 2006. Secondly, Nokia announced its strategy to be an Internet company in 2007, owning a clear development direction. The Symbian acquisition is just the first step of a business transformation. If Symbian succeeds in becoming a major software framework in the future mobile Internet, Nokia will control the future mobile Internet market, improving bargaining power on profit allocation with operators.
Nokia and Motorola still occupy a market share of 85% in China's smart phone market. Amoi, Dopod, Samsung, and Sony Ericsson are the other four top six brands. Coolpad, MIO, Lenovo, and other domestic brands have entered the top ten brands based on their technological advantages such as dual mode and GPS navigation.
TD-SCDMA will be the Chance for Domestic Smart Phone Brands
CCID Consulting statistic shows that domestic brands only occupy a share of 10.5% in China's smart phone market although six of them have been top ten brands. Smart phones must have powerful audio-visual entertainment as well as mobile commerce functions, which sets higher requirements on effective function development and differential design capabilities for mobile phone manufacturers based on base band chips and operating systems. However, lack of R&D spending limits the development of domestic brands.
The coming TD-SCDMA commercial operating provides new opportunities for domestic mobile phone brands. Supported by the Chinese government, domestic enterprises have taken advantage in patenting and supporting R&D in TD-SCDMA fields. In the bidding on TD-SCDMA terminals of China Mobile, ZTE and other domestic brands have won a share of more than a half. Driven by China Mobile, TD-SCDMA will enter the market in the near future. Improving product quality and lifting brand effects, domestic brands have the possibility of occupying an advantageous position in new competition.
Growth of China's Smart Phone Market May Slow Down in the Next Half
The slowdown growth of sales volume has appeared since January due to inflation and consumers' decreasing purchasing ability, although China's smart phone market has grown in the first half of 2008. CCID Consulting forecasts that the current situation will continue into the next half of 2008. The main reasons lie in the influence of the macro economy and the lack of 3G data services.
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