Warc Blog

Chinese mobile competition rises

6 August 2013
BEIJING: China's booming mobile phone market continues to diversify, with China Mobile and Xiaomi, two of the nation's largest handset makers, launching new entry-level products.

State-owned China Mobile unveiled the M701, an Android-based smartphone with a 5-inch screen, costing 1,299 yuan ($212), and the M601, which is targeted at lower-end users, comes with a 4-inch screen and costs 499 yuan. Both will be launched later this month.

Meanwhile, Beijing-based Xiaomi, seeking to take on Apple in the lower-end market amid speculation that the US company is planning to slash its iPhone price to attract more Chinese buyers, has unveiled its Hongmi Android-based smartphone. It comes with a 4.7-inch screen and costs 799 yuan ($130), China Daily reports.

Lei Jun, founder and CEO of Xiaomi, said: "I believe the Hongmi is the best product among all 1,000-yuan smartphones [...] Xiaomi does not care much about sales or shipments, but we strive to produce the finest devices for our customers."

Li Yue, China Mobile's CEO, was also upbeat about the country's mobile device industry, which he described as having a "very bright future".

He added that the company now had about 740m customers and that, if consumers continued to upgrade or change their phones every 23 months, then at least 300m new mobile devices would need to be produced every year.

Analyst James Yan, from research firm IDC China, said China Mobile aimed to create a platform that integrates its current mobile services, such as the instant-messaging tool Fetion, and other mobile applications.

He also suggested that the launch of its own-brand smartphones would help the group to expand into tier five and tier six cities, which most mobile phone companies have found difficult to reach.

But Kevin Wang, an analyst with market researchers IHS iSuppli, pointed out that the own-brand smartphone market is still small and foreign companies have been offering own-brand products for many years.

He said he doubted China Mobile's new smartphones would be a great revenue-earner, although he accepted they would help to strengthen the brand.

Data sourced from China Daily; additional content by Warc staff

 
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