Mobile In China Presentation

Mobile in China Shuai Quan & Kai Mai July 15, 2009

Agenda • Quick self-intro (5 min) • Chinese Mobile Market Overview • Business Model • Networking / Break (15 min) • Trends to Watch • Conclusion • QA, Announcement & Networking

Chinese Mobile Market Overview • China has the largest 'pure mobile population' ‐ 670 million subscribers, 400 million of whom does not own a personal computer (MIIT 2009). • China is also the largest mobile entertainment population – with 35% of the mobile subscribers in China who use their phones to listen to music, compared to 6% in the US (M:Metrics 2008). • China also happens to be the largest mobile Internet population – with 117 million mobile subscribers who have accessed Internet through mobile in China (CNNIC 2009). • Lastly, China is the largest mobile operator ‐ feeding the 3G network with $6.2 billion in 2009.

Existing Business Model in Chinese Market Content • Like Internet businesses in China, everything starts with content. In the early days of Baidu, the largest Chinese search engine, over 70% of the traffic is brought by its 'free MP3 search & download' service. • The Chinese youth have been hungrily searching for content for years and they are the 'alpha users' of ring‐tone and WAP surfing. • As long as your content service is well packaged, those 35% of the mobile subscribers who use their phones to listen to music will come. • Mobile TV is also popular • SMS & Ringtone Primary revenue drivers.18 million SMS sent over Chinese New Year in 2009 In US, content rules! Best example: iPhone App Within 9 months, i Phone application downloads have reached 1 billion.

Existing Business Model in Chinese Market Handset • long waiting of 3G pushed the market to come up with alternative business model other than content. • In China, cell phones have never been sim-locked. Some phones are bundled with plans and term agreements. • Average cell phone turnover for Chinese youth is 6‐month

What to Watch in Chinese Mobile Market • 3G • Bandit cell phones • Smart Phone Platforms • Mobile Apps

3G • January 2009, 3G licenses were issued to just 3 mobile companies in China. (China Mobile, China Unicom, & China Telecom) • 3G coverage is not good at some cities. The network is still being built out. • 3G pricing consider expensive. Examples of China mobile data plans: 50rmb ($7) for 500mb 100rmb ($14) for 1gb 200rmb ($28) for 5gb 300rmb ($42) for 10gb

Bandit Cell Phones Good looking, practical and heavily loaded with all the latest technology functions available‐WiFi, Bluetooth, external storage, 4.0 Mega‐pixels Camera, dual sim cards, TV, and, let’s not forget, the 6 Stereo Speakers set built-in

Bandit Cell Phones

Bandit Cell Phones – Olympic Theme

Agenda • Quick self-intro (5 min) • Chinese Mobile Market Overview • Business Model • Networking / Break (15 min) • Trends to Watch • Conclusion • QA, Announcement & Pitch

Bandit Cell Phones Closer look: • Popular: 50% of the Chinese market; large export market in developing countries • Cheap but feature-rich, stylish: $80 - $200 • Creative: all the shapes, colors and trendy features • Quick to market: 40 days to 60 days from concept to shipment Why so cheap: • Skip cell phone manufacture licenses from the Chinese government, thus saving all the related costs • Mediatek - key provider of bandit cell phone chipset components in Taiwan; it has complete chain of core technology support for cell phones

Bandit Cell Phones Trends: • Smaller factories are dying due to the global recession and increased regulation in the export market by foreign governments • The bigger bandi phone manufactuers start to build their brands and images. Bandit Cell Phone Platform • Most of bandit phones are on Mediatek platform • Lots of developers want to use Android, but it is not mature for Bandit phones or other regular cell phones • Rockchip will roll out new chipset supporting Android in Oct. It will greatly lower the barrier of entry into Android-powered smart phones Opportunities: • Low cost smart phones • Special-purpose cell phones and devices

Smart Phone Platforms 1. Symbian & Windows mobile are popular 3. OPhone: OMS(open mobile system) developed by China Mobile, based on Android and localized for China, tightly integrated with China mobile services (mail, music, contact, messaging, GPS, TV(CMMB) 5. OPhone: Lenovo O1 (2G version) scheduled to roll out later this month. 7. China Unicom – Uniplus OS 9. Where is Apple (next page)

Where is Apple • Rumored to work with China Unicom which has the most expensive 3G data plan, no wifi; iPhone 3GS, 2-year contracts, costs $1000 - $1100(appromiately $450 for the phone itself) Challenges for Apple: • Apple requires a credit card ( people are not used to own or use credit cards online. They are more used to use Alipay (the 3rd largest payment platform globally, has 200mil users, USA's population is 300 mil) • Chinese users are used to pre-paid plans. So the app purchase usages will be higher if some amount of app purchase credit is bundled with pre-paid plans. • For business users, they don't want to purchase individual apps that are billed on their company cards clearly. • Chinese users are more used to billing through carriers (eg: purchase ringtones, wallpapers) • Government control.

Top Free Apps from iTune China

Top Paid Apps from iTune China

Mobile Apps (Finding from iTune Store in China) • Entertainment, books, education and games are the most popular categories • There are some categories that don’t have many apps that are designed for Chinese or in Chinese: Health Care & Fitness, News, Business, Medical, Productivity, Sports • Within Social Networking category, QQ, xiaonei, facebook, twitter and fanfou are at the top ranks

Conclusion: What’s In It For Me? Our take: • There are definitely a lot of opportunities within Chinese Mobile Market • To be part of this journey, the best way is to be there, in the market!

Contact Us Shuai Quan Marketing & Business Consultant LinkedIn: http://www.linkedin.com/in/shuaiquan Kai Mai Entrepreneur, Product Development and Management LinkedIn: http://www.linkedin.com/in/kaimai

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Mobile In China Presentation

by agilestorm on Jul 17, 2009

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