3G to Restructure China's Mobile Phone Market
Published on: 1st Jan 1970: 1:33am
China's CCID Consulting has reported that with demand still affected by various setbacks that occurred in the first half of 2009, growth in the domestic mobile phone market, in particular the GSM mobile phone sector, has remained sluggish since late last year. A lack of innovative technology and new design in mobile phone products in 2009, as well the anticipated release of 3G mobile phone products have kept consumers from purchasing new phones. As a result, the GSM market has not seen much growth over the first half of 2009.
In contrast to the GSM market, the CDMA market has seen significant growth in the first half of 2009, despite the overall sluggish demand for mobile phones. CDMA sales have surpassed 2 million units per month over the past three months, which is a result of China Telecom's efforts in promotion, tie-in sales and subsidy policies to attract buyers to CDMA phones.
The 3G mobile phone data card boom
The year 2009 saw the debut of 3G operations in China, with each of the country's three mobile operators launching their own 3G networks and products. Though the 3G market is still in its growth stages, the data card sector has already exhibited significant growth potential.
The bandwidth and transmission rate have both improved greatly in 3G networks. The TD-HSDPA has achieved a downlink speed of 2.8Mbps, one of the fastest in the market. In comparison with the 3G mobile phone market, the data card sector is a more mature, with an industry chain in place to better fulfill high-speed mobile web functions. For this reason, operators have invested heavily in the development of their data card businesses. Currently, the data card area is where the operators are attempting to grow and build their customer base, as it may potentially enable operators to expand their base for 3G mobile phone operations while promoting the data component.
CCID predicted that China's data card shipment will amount to 9.092 million cards in 2009. The quick pace of growth in the data card market will require the optimization of data card functions, as well as a consolidation of resources on the industry chain. It may also bring changes to product functions, distribution channels and partnership dynamics within the industry chain.
3G will expedite the opening of mobile phone platforms in the era of mobile phone applications
With the rapid development of integration and fusion technologies in the mobile phone market in recent years, mobile phones are transitioning from a "high-tech product" to an "ordinary consumer product." As of May 2005, the majority of mobile phones had a digital camera, a music player and Bluetooth capability as default functions, with 69.7 percent of phones sold including a camera, 62.3 percent with a music player and 52.7 percent with Bluetooth. However, room for future innovation through hardware add-ons is limited, so manufacturers will focus on software applications and value-added businesses, which will help expand the application scope of the typical mobile phone for use with 3G and open platforms.
In the 3G era, the mobile devices will be required to be more intelligent in many aspects, including in the area of high-speed wireless mobile broadband connection, which will expedite the development of the open platforms. With open technical platforms consolidating various content resources, increased mobile applications will contribute to building customer loyalty, by binding two core resources - customers and content - together. With an increasing number of mobile networks and applications, more companies will launch their own open technical platforms, including not only the software developers and device manufacturers but also the operators themselves. For instance, China Mobile has launched its OMS platform, while China Unicom and China Telecom are planning their own mobile open platforms.
Increased competition will put an end to copycats, forcing manufacturers to build brands
Based on the international landscape of the 3G market, the custom mobile phone will play a key role in the development of 3G network operations. Custom mobile phones will challenge the manufacturers' R&D capabilities as well as quality of after sales services, while deterring copycats. By the time the 3G mobile phones attain around a 70 percent market share through years of development, copycat mobile phones will be eliminated by market competition.
Copycat products attract customers that are less concerned with quality and more price sensitive. As the copycat mobile phone's market share grows, its flaws will be exposed, including its poor quality, any negative impact on the health or the environment, as well as the lack of after sales services. Manufactures which focus on brand building, and brands like BenePhon, Gionee and Malata, have been able to gain shares in the Chinese mobile phone market. They have set an example for the copycat mobile phone manufactures that do value quality, customers' rights and social contributions.