- 12-12-2012, 07:03 PM #1
I have nothing to do tonight so I decided to throw my two cents on the recent events regarding cell phones in China.
Many of you probably know that several days ago China Mobile announced a whole lumia line while denied iphone on their network and that's the very reason for Nokia to jump 13%, apple to drop 6.5%(apple lost about twice of nokia's market cap that day). But I doubt any of you actually knows the meaning behind this as the whole business there in china is upside down different.
Let me start off by explaining how it works differently in China. First and for most, there's no such thing as transfer your number to another carrier in China. And this, I believe, is the very core to the market power China Mobile possesses. What this means is that for the 700m users they have, anyone wanna to jump ship to another carrier with the iphone need to seriously consider the trade off. Everyone uses their cell long enough should understand the importance of your number, it's almost as important as your id or pin if you ask me. A second difference, which offsets the market power provided by the first, is that in China, phones never come out locked. That means if you can grap a phone at wherever you want and choose whichever carrier you like to use it. So since there are different channels for one to get hands on Iphone, it's quite easy for him/her to pick up an iphone somewhere else and use it under China Mobile's network. So being denied by China mobile means no such thing as Apple have no access to China mobile's users, and that, I suppose is why both of the parties would not give in. Let me explain this to you a bit further. So for Apple, they wont give up their rip your *** off profit share plan with China mobile because guess what, they still can get to their users one way or another. And for China Mobile, they would never give in because obviously their users can always use an iphone bought somewhere else if they so wish. Thus not selling iphone wouldn't be a customer losing threat to them. Ok here I want to provide some other details in regard China mobile. It has literally the best coverage I've ever known of, you get reception in subay, on the top of a mountain, in the middle of a wildness, inside a buncker, underwater...literally everywhere you can possbily go. Same can not be said to other carriers in China, they are somewhat in line with what we get here in America, China mobile just blow all them away in this regard and this makes switch carrier a pain in the axx even more so. Ok Back to the topic, so why would the China mobile deal matters at all. That has have something to do with their so called big customers, aka corporate customers. I have no number with me as how many such customers they have, but let's say 100m for the purpose of this article and that's quite significant already right? These customers are the ones that can get private deals with china mobile and also the ones that would not switch carrier in a thousand years. So it's like a sub market that only China Mobile have the direct access to and a great portion of them are the ones with the true purchasing power.(As you know an iphone in china worth 2-month income for many) And that's the part Nokia won access to while apple get denied.
I will stop here as it's really hard to draw a conclusion that really how much impact this deal has. But I do have a feeling that if apple and china mobile will ever get into a deal, it would be apple that to give in. Now as I read this, I'm not sure why I put it here..but as long as some of you enjoy this bit of information..
- 12-12-2012, 07:32 PM #2
Very interesting read. Thank you! Are you originally from China? If so, maybe you have time to answer a few questions?
I've read that the Lumia 920 will not be subsidized by China Mobile. If China Mobile isn't subsidizing the device, and consumers can use any device on any network, what is the benefit to Nokia or any other OEM of having their device officially supported by that carrier? Is it just about exposing the Lumia 920 to customers that walk into China Mobile stores? Surely there must be more to it, if that is what so massively influenced the price of Nokia's stock.
What do Chinese consumers think about the Apple brand?
What do Chinese consumers think about the Nokia brand?
What do Chinese consumers think about the HTC brand?
What do Chinese consumers think about Huwai and ZTE, particularly in comparison to Nokia?
Is China really such an important market for WP8, considering the price for a WP8 smartphone, even the cheapest ones, likely cost half a months income? If so, why?
- 12-12-2012, 08:50 PM #3
For the first question, the corporate customers that can get their own deals with local China mobile is how most flagship devices subsidizing works in china. Those customers can get a deal say 10$ a month for 20 month and you get this phone for 100$.(phone still unlocked). Those deals are normally not available to the general public when they device is fresh and considered flagship. However as times goes on they will start to open to the public(as the price of the phone drops). So as I said, this bunch corporate customers are not so easy to get access to and with more money, therefore highly valuable and it's easy to assume them to be the targets of high end phones. (Also keep in mind a significant portion of them are not tech people and would take what china mobile gives them) A second point is there will be subsidizing plans available as time goes on for Nokia's lumias, whereas iphone is off the table completely. It is also actually quite significant than it seems to be for having lumias officially supported and displayed there, it's how traditionally things works there.
As far as brand goes, Apple stuff are still considered to be cool and a sign of somewhat wealth, there was a story that a boy sold his kidney for an iphone(wtf...). So it's quite popular despite a lot cant afford it. Nokia, however, has a much more recognized name in China compared to what they have here in America. They make quality phones and provide good services( unlike apple in china who has really cheap service, really). For my 10 years with cell phone in China, I have all nokia phones and really cant complain about it. There's a forum for sybiam in China has over 1m active users(wtf).... HTC I don't know much about, HUWEI and ZTE do establish a reputation for cheap quality units and a lot people think they might be China's hope in mobile device if we do have any in the future.
I would think China is the real bet for WP8. Try think it this way, smartphones are the unstoppable trend and that's also true in China, so people will eventually go that route. So really the competition is within the 1000-2000 rmb range for the low end devices and with Huawei, zte and others on board next year, there will be plenty phones to choose from in that specific market, and probably gonna make the tone of platform there. For years Nokia has this strategy in china which is sell low end cheap phone for market sure and brand name and sell high end phones for profit. That may be happening again with the lumia line.
12-12-2012, 11:30 PM #4
- 30 Posts
Can you please also talk about the impact of the use of TD-SCDMA at China Mobile. You talk about phones being sold as unlocked and people can buy phones elsewhere and use with China Mobile. My understanding (perhaps wrong) is that Apple doesn't have a TD-SCDMA version yet. So I'm curious whether other carriers in China run TD-SCDMA as well and because of that it is easy to move over their phones to the China Mobile network.
12-12-2012, 11:50 PM #5
- 3 Posts
a) Switch carriers and lose your phone number but then you can run on normal 3G networks at 3G speeds
b) Use an iPhone or other WCDMA phone on China Mobile and be stuck at EDGE speeds
c) Get a TD-SCDMA phone from China Mobile (i.e. L920T)
If people insist on using iPhone, they either have to lose their phone number or be stuck at EDGE.
- 12-12-2012, 11:50 PM #6
Thanks for taking the time to answer those questions. I very much appreciate it. WPC has members from all over the world, but China seems massively underrepresented. Learning about the telecom industry in China, well, that is still quite a challenge.
I also feel totally unqualified to assess WP8's chances of success in China. As far as I know, Facebook and Linked-In integration in WP8 have been swapped out and replaced with similar services that are more popular in China, but are those services just as important to Chinese consumers as Facebook and Linked-In are to us? What about Skype? What about the app market? Is it completely separate from what is offered in the west, or is there a large amount of overlap? How engaged are Chinese developers? Are they more or less interested in WP8 than their western counterparts?
I'm guessing Android will likely be WP's fiercest challenger in China. Is Android less, equally or more customized to the Chinese market than WP? What would you say are the main strengths and weaknesses of WP, when compared to Android, in China?
Sorry for bombarding you with all these questions. I just want to seize the chance to learn about China's telecom industry when given the opportunity
- 12-13-2012, 12:28 AM #7
As far as apps go, the social network end in China is a complete new world(other ends being more or less universal). We have our own FB and twitter, known as renren and weibo. And they play an crucial role now, especially weibo, it's now literally the window for a lot people to know what's going on. Skype is another story, in China only people with the need of international calls may use that, and there are not a single service that mocks Skype(renren and weibo are just copies from fb and twitter) yet. We do have other communication application focuses more on chatting tho, but almost every Chinese with internet access is on that.
As far as development goes, I'm actually quite impressed by the work the Chinese community managed to pull off. Unlike the situation we have here, the most popular apps in china are all available for wp(some through third party as well) and you don't really feel left behind in updates. And a fair amount of smaller but promising ones are also there, which is quite impressive if you think about it. I cant be sure but that may have something to do with ms' profit sharing plan since they are playing catching up now thus are much more friendly. And it also only takes little effort for them to convert an ios or android app into wp one thanks to ms. If you check the windows store for win8, same holds true there. I get my surface on launch day and all my needed Chinese apps are already there, some may need improvements of course, but the dedication is there, probably because we have the manpower. That's why Nokia and Ms may put on a good fight there.
And you guess is right, android is pretty much dominating market in china as well and fans are growing(they are eating nokia's lunch named Symbian). But one thing that's different than here is that low end instead of high end phones bring that market sure for the most part(keep in mind Americans make more money while phones cost less). And that's quite important because low end androids are you know, crappy to say the best. Chinese manufacturers can make sub $100 phones that run the latest android system, just imagine how that compares the smoothness goddess of a windows phone. So all in all, they have their chance there, problem is if they can pull it off. So far it's a ok game, still need work. Chinese also not hate MS so much although they probably love apple more. Also, androids there are indeed heavily customized. Chinese brand put a lot work on customized roms and get decent market reaction.
Last edited by ynight; 12-13-2012 at 12:55 AM.
- 12-13-2012, 12:34 AM #8
12-13-2012, 12:36 AM #9
- 3 Posts
- 12-13-2012, 12:38 AM #10
On a side note, there's also something called pretty numbers in china. So as you may know 6&8 are considered to be lucky numbers and it would cost you a fortune to get a number like 888888, probably tens of thousands for so many 8s.. And that makes the rich carrier switch proof as well(they can afford buy another pretty number at other carrier, but chances are they are sold out)
12-13-2012, 01:13 AM #12
- 201 Posts
Another question. So because the iPhone doesn't properly support China Mobiles' network, you can use it but your stuck on edge.
Now, what about the opposite? What if you try using a properly supported China Mobile device (like the Lumia 920T) on another carrier? If you can still get 3G then the Lumia 920T stands to become the de facto premium handset in the whole of China.
- 12-13-2012, 01:31 AM #13
- 12-13-2012, 01:53 AM #14
ynight, thank you for starting this thread. You are right that there are people on this forum who would appreciate such a thread. I also appreciate you taking the time to answer those questions.
So far there have been some great questions asked; questions I had myself, so I'm happy to have some answers there.
If I may, I have a couple questions myself.
What are your thoughts on the growth of 3G and LTE usage in China? I know you said that WiFi is fairly accessible there. Does that imply that users are not interested in 3G, let alone LTE? Or, are people willing to pay a premium for faster speeds?
I assume that if the price is low enough, people will want faster speeds. Do you see the cost of 3G/LTE access dropping in the near future?
I can imagine that the average citizen of China will probably be satisfied with using EDGE in between WiFi networks, but how about the corporations? Will they require 3G? How about LTE? I would imagine the larger corporations would almost see it as a sign of prestige to have LTE access. Am I guessing correctly?
Another question, that is sort of off-topic:
Is NFC used much in China? Is it a non-factor, or do people use it enough for it to be a factor in the purchasing process? In other words, will someone buy a phone with NFC over an iPhone because of the ability to use NFC?
- 12-13-2012, 02:35 AM #16
As for NFC, I really don't think that will be anywhere near significant as of now. NFC is a nice idea and cool, but it requires a much more mature eco system than the current one to be truly useful. By that I mean nfc enabled gadgets that can interact with each other. Without that it's more or less just for fun(transfer stuff can be done with cloud solutions and nfc tags I haven't really find that save me much trouble at all). It has potential, but not yet developed.
- 12-13-2012, 05:43 PM #17
Is LTE planned on being available soon? In other words, would a potential customer want to future proof themselves by buying a phone that supports LTE? Or is LTE availability far away enough that it's not a factor? It seems like if LTE is available soon, it is more cost effective to buy a phone supporting LTE now, rather than buying another phone later, since the cost of the phone is a larger factor than the contract.
12-13-2012, 06:20 PM #18
- 22 Posts
Personally I think Lumia 920 is a better deal than iPhone 5. Even though L920 is not subsidized by carriers (China Unicom carries unlocked HSPA version), it's still like 20% cheaper than the iPhone 5 on contract (which is subsidized in China). But again, iPhone is considered way more prestigious in China than any other smartphone so...
- 12-13-2012, 07:10 PM #19
As i mentioned before, iphone is considered to be cool and can show off your wealth somewhat(think of the very first days of iphone, you "wow" people when you take it out. the halo faded away here now, still exist in China, at least some part of China). it is such a premier device that some kid sold his fk kidney to buy one(even though that kid is ******ed). chinese whorship prestigous stuff and that plays a main role of iphone sales. That's also why a lot people would rather use an iphone with edge and not get a china mobile 3g device.
As far as Lumia goes, people buying it for varies reason but probably not heavrily on the future LTE network if you ask me. For one, most people wouldnt even be aware of the LTE thing, and for two, those who know probably wouldnt believe in future proof at all, i mean chances are whoever follows this sort of news closely knows pretty well how fast the tech world can advance. I tend to think data speed as bonus, you live with what's available given all those restrictions(cant transfer number is a deal breaker). People do change to faster networks, but the number is not significant(facts are china mobile actually has slower 3g despite amazing coverage, but its competitors still fail in grap more market share.)
It's so hard to try to think what the public would do before we see some hard numbers.. Also, I find that Lumia 920 in China is not priced as competitative as it does here. It's about 40% cheaper than iphone off contract and 100% or even more cheaper on contract. (compared to the 32g version of course) But in China, it's roughly 20% difference.
I have yet to see any hard figures about lumias in china since it's just available this week, i know the first shippment sold out in hongkong within hours, so as in taiwan. But they only got several thousands while i'd imagine mainland china would have much more stock than that..
12-13-2012, 10:09 PM #20
- 22 Posts
A quick glimpse of sales for the unlocked HSPA+ version: the pre-order opened about three days ago (online exclusively I think) and so far it says "640 sold". http://detail.tmall.com/item.htm?spm=a220m.1000858.1000725.11.0V3UVM&id=16659873114
- 12-14-2012, 01:11 AM #23
Nokia Siemens Networks Gets China Mobile TD-LTE Deal
This one says 13 cities by the end of the year (not just NSN, reportedly other companies are in the mix too). NSN wins China Mobile deal for TD-LTE roll-out This was reported back in October, will the projects be complete in time? Only a couple weeks left!
I posted some links above in my response to joshingyou regarding LTE roll-out. Do you know if those projects are still on schedule? Do you know if they involve the whole cities, or just certain areas?
I have heard that Nokia's supply issues might be related to a shortage from Qualcomm. Some of speculated that by changing the chipset used in the L920Ts, they will be able to avoid the supply shortages. Also, Nokia has two production facilities in China. One in Beijing, and one in Dongguan, so I don't think the supply chain is going to be an issue in Asia.
Do you have a source for the several thousand sold in Hong Kong? Does several mean 5,000 or more like 9,000? Was that several thousand in Hong Kong, and several thousand in Taiwan? Or several thousand including both HK and Taiwan?
Either way, it sounds like supply is much better in China. Other stores in Europe have reported selling out, but only 2,000 - 3,000 units. I'm hoping for the best.
- 12-14-2012, 07:07 AM #25
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