3G poised to roar with new vigor
By Zhu Shenshen |
February 11, 2010, Thursday
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Print Edition
Print Edition
IT may be the Year of the Tiger for astrologers, but for the telecommunications industry, 2010 is shaping up as the year of 3G.
After a lukewarm market response when 3G first appeared in China early last year, the next generation of mobile phones is expected to experience "explosive" growth on aggressive discounting by carriers, an expanding variety of low-cost handset models and richer applications, analysts said.
"China will continue investing in 3G in 2010," said Industry and Information Technology Minister Li Yizhong. "The 3G sector will play an important role in the economic recovery process."
In January 2009, the government issued 3G licenses to three telecom operators: China Mobile, China Unicom and China Telecom.
The new technology allows users access to high-speed Internet services such as film downloads, 3D games and video calls on handsets.
China now has nearly 13 million 3G users, and a third of them use phones based on China-developed 3G technology, TD-SCDMA (time division-synchronous code division multiple access), the ministry said.
The 3G user base will rise to about 60 million by the end of this year, according to Chen Jinqiao, deputy chief engineer at MIIT's China Academy of Telecommunication Research.
Chinese carriers plan to provide more than 50 billion yuan (US$7.35 billion) worth of subsidies to promote the domestic 3G handset market in 2010, according to Kevin Wang, director of China research at iSuppli.
"Because of strong subsidies, phones using the TD-SCDMA standard will generate the bulk of growth in 2010," said Wang.
Domestic sales of TD-SCDMA phones will rise to 20.4 million units in 2010, a 15-fold increase from a year ago, according to iSuppli, a US-based IT consulting firm.
China Mobile, the nation's biggest carrier, is expected to more than double its consumer subsidies to 30 billion yuan this year.
The subsidies are key for the carriers because they make 3G phones more affordable and attractive, according to Paul Hsu, Dopod's chief operating officer.
Dopod, an arm of Taiwan-based HTC, is forecasting its revenue from the China market will increase 40 percent this year on the back of its new 3G models.
With the support of carriers, the Dopod 3G model will cost less than 3,000 yuan, compared with many models that were more than 5,000 yuan last year, Hsu said.
Qualcomm, the world's biggest mobile phone chip designer, will launch a chipset for 3G phones, costing less than US$30 each, in China and other emerging markets, according to Cristiano Amon, Qualcomm's vice president for CDMA products.
Besides the low cost, more than 700 million Chinese handset users will be offered a wider choice of 3G products, like BlackBerry with Chinese 3G standard and Google-branded phones.
In December, China Telecom and Motorola launched a new 3G smartphone that uses Google's Android system as the telco entered the high-end 3G market.
"It's the first 3G phone we jointly developed with an international brand, and it will help us attract high-end users in 2010," said Ma Daojie, China Telecom's mobile business general manager.
Motorola will launch more than 10 3G high-end models in China next year and also entry-level 3G phones costing about 1,000 yuan within 12 to 18 months, John Gherghetta, Motorola's corporate vice president and general manager of mobile device business for international markets, told Shanghai Daily.
Meanwhile, Canada-based Research In Motion Ltd will offer BlackBerry phones on the Chinese mainland based on CDMA 2000 and TD-SCDMA technologies, in cooperation with China Mobile and China Telecom.
The 3G smartphones launched in China, developed by Motorola, Nokia, Dopod and RIM, join the high-end 3G market, following iPhone's entry into China in October.
In the third quarter, smartphone sales globally grew 12 percent year on year to 41 million units, compared with a 0.1 percent gain for the total handset market, according to Gartner Inc, a United States-based IT research firm.
"People choose 3G for 'WoW' phones rather than anything. The sales of iPhone prove it," said Sandy Shen, a Gartner's analyst based in Shanghai.
To promote 3G data services, operators are building a new ecosystem leveraging mobile application stores and smartphones. All carriers have tried to establish online application stores, like Apple's iTunes Store ? which isn't available on the Chinese mainland ? to provide users with enough applications on the 3G network.
China Mobile, the world's biggest phone maker, opened a new online application called Mobile Market last year, providing users with services such as music, video, books, software and maps.
Nokia, the world's biggest phone maker, also launched its online Ovi Store, which has started to provide free maps service on the latest handsets.
Other features on 3G phones likely to be popular in China this year include Mobile TV, the global positioning system and map services, mobile payments and video applications, analysts said.
In the fourth quarter of 2009, Chinese mobile instant message user accounts totaled about 136 million, a 22 percent increase from the previous quarter.
Most users choose China Mobile's Fetion and Microsoft's MSN, according to Analysys International, a Beijing-based research firm.
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