Open Source Smart Phone OS in Boost Sales in China
September 8, 2008 5:54 AM | Interesting | Smartphone | Comments (0)
| CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong, recently released its article on China's open source OS assisting the development of the smart phone market. CCID Consulting's data shows that the sales volume of smart phones in China's market in 2008H1 reached 15.671 million sets, up 32.1% over 2007 H1. And the sales revenue reached 37.74 billion Yuan, up 25.7% over 2007 H1. 'Open Source' Operating Systems Have Been the Mainstream: Open source operating systems have been an inevitable tendency, especially with the release of the Symbian platform. On June 24th, 2008, Nokia acquired 52% of the shares with 264 million euros and Symbian became a wholly-owned subsidiary of Nokia. Nokia also announced that the S60 platform of Symbian, as well as UIQ of Motorola, and MOAP of NTT DOCOMO, will be integrated into an open mobile software development platform, which means Symbian will be an open source operating system in the future. |  |
At present, Symbian, Windows Mobile, and Linux are the three main operating systems in China's smart phone market.
CCID Consulting statistics show that these three operating systems have occupied a market share of more than 90%. On the other hand, Google, the tycoons of the Internet industry, together with 34 enterprises including IC providers, mobile phone manufacturers, and operators, will release the open source system Android by the end of 2008, which indicates the inevitable openness of mobile phone operating systems.
Figure 1 Market Structure of China's Smart Phone Operating System in 2008 H1
Source: CCID Consulting, July 2008
Nokia Takes a Leading Position in the Smart Phone Market: After the Symbian acquisition, Nokia strengthened its leading position in the smart phone market. Firstly, Nokia has occupied a market share of 68.5% in China's smart phone market. The sales volume of Nokia smart phone reached 10,712 thousand, up 43.8% over 2006. Secondly, Nokia announced its strategy to be an Internet company in 2007, owning a clear development direction. The Symbian acquisition is just the first step of a business transformation. If Symbian succeeds in becoming a major software framework in the future mobile Internet, Nokia will control the future mobile Internet market, improving bargaining power on profit allocation with operators.
Figure 2 Brand Structure of China's Smart Phone Market in 2008 H1
Source: CCID Consulting, July 2008
TD-SCDMA will be the Chance for Domestic Smart Phone Brands: CCID Consulting statistic shows that domestic brands only occupy a share of 10.5% in China's smart phone market although six of them have been top ten brands. Smart phones must have powerful audio-visual entertainment as well as mobile commerce functions, which sets higher requirements on effective function development and differential design capabilities for mobile phone manufacturers based on base band chips and operating systems. However, lack of R&D spending limits the development of domestic brands.
The coming TD-SCDMA commercial operating provides new opportunities for domestic mobile phone brands. Supported by the Chinese government, domestic enterprises have taken advantage in patenting and supporting R&D in TD-SCDMA fields. In the bidding on TD-SCDMA terminals of China Mobile, ZTE and other domestic brands have won a share of more than a half. Driven by China Mobile, TD-SCDMA will enter the market in the near future. Improving product quality and lifting brand effects, domestic brands have the possibility of occupying an advantageous position in new competition.
Growth of China's Smart Phone Market May Slow Down in the Next Half: The slowdown growth of sales volume has appeared since January due to inflation and consumers' decreasing purchasing ability, although China's smart phone market has grown in the first half of 2008. CCID Consulting forecasts that the current situation will continue into the next half of 2008. The main reasons lie in the influence of the macro economy and the lack of 3G data services.
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