China's CCID Consulting has recently analyzed the development of China's mobile IM market and reports that the development of China's mobile IM market started off in 2006 and gathered pace in 2007, with the market growing at a tremendous speed ever since. With mobile carriers such as China Mobile leading the market, the Chinese mobile IM market scale reached 1.37 billion Yuan, up 92.9% over the last year.

Currently the Chinese mobile IM market shows the following trends:

First, the mobile IM market becomes the first growth point for the Chinese IM market. In 2007, Chinese mobile IM market overgrew the individual IM market and corporate IM market in terms of both market scale growth rate and user number growth rate. Its market scale growth rate is nearly 43% higher than that of the overall Chinese IM market. In the future, the mobile IM market will show greater growth momentum.

Second, the carriers will turn from policy orientation to market orientation. In 2006, the mobile carriers paved the way into the market through policy adjustment, and in 2007 the mobile carriers have completely taken a predominant market position in terms of user numbers. Fetion, for example, up to the end of 2007, the combined number of users of Fetion and Fetion QQ has reached 40 million. If China Unicom users are taken into account, the users from carriers account for 76% of the Chinese mobile IM market. The predominant position of the carriers will be further solidified.

Third, market cooperation is still the mainstream. In 2007, cooperation is still the main theme for mobile IM service, the reason boils down to two: first, monopoly by one specific carrier is not possible, the carriers need to cooperate with other IM service providers to improve their technology R&D capability, so as to provide better user experiences; second, as the carriers invest greater efforts into the market, the other mobile IM service providers have to create partnerships to enhance their market competitiveness, the partnership between PICA and MSN is a good example of this.

Meanwhile, as the integration between internet and mobile network further deepens, the Chinese mobile IM market has shown a trend of diversification. First, mobile IM service and telecommunication business have inherent relationship, and telecommunication business has already been closely related with corporate applications, which leads mobile IM develop in the direction of corporate services. China Telecom has launched its own mobile IM product, and has targeted the corporate users as one of the breakthrough point; second, with community as a growing trend in the internet market, the mobile IM will definitely reach the socializing segment, it's heard that PICA has tested its own networking service platform recently, and will provide seamless community networking service for mobile users by integrating with the client end.

Although the Chinese mobile IM market is prospering, there are still several bottlenecks to overcome. Top of the list is to educate the market, mobile IM is still in the market cultivation stage, most mobile phone users are not accustomed to mobile phone internet, and are still hesitant toward the mobile phone internet service. We can see that 50 million mobile IM users is still a very small fragment of the 500 million mobile phone users. The next issue is the terminal, mobile IM has to provide diversified wireless value added services to profit, but there lacks suitable value added services for mobile IM, due to restrictions from terminal equipments, the mobile value added services can not be as prosperous as internet value added service. The third issue is 3G, with the timeline of development still not determined, many services that require high quality transmission are not available now, which also bring uncertainties to the mobile IM corporate services and community entertainment services.

Therefore, overcoming the above bottlenecks is the only way for the sustainable high speed development of the Chinese mobile IM market.

Posted to the site on 16th April 2008

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