China Mobile to make devices

6 December 2012

BEIJING: China Mobile, the telecoms giant, is seeking to develop its own handsets, a move drawing inspiration from companies like Walmart, the US retailer.

Speaking at a conference, Li Yue, China Mobile's chief executive, reported that the firm will roll out branded devices, in response to a question regarding its objectives in this space.

"My answer is that we will definitely do it," he said, as reported by PC World. "China Mobile will do things that we should do. We will deliver added-value products."

Despite stating this intention, Li also stressed that the goal was not to exclude its existing hardware partners, but instead adopt an approach similar to the store brand model used by Walmart.

"We will not compete with other industry mobile phone vendors," he said, according to the China Daily. "For example, when Walmart sells other people's products, Walmart's own products will account for about 25% of sales."

More broadly, China Mobile is attempting to strengthen its capabilities in terms of providing music, video and reading matter on mobile devices.

This should help the organisation retain and enhance its existing "army" of customers, currently numbering just under 700m. "We have the army. Now we need the navy and the air force," Li said.

As part of this process, China Mobile has taken a 15% share in iFlyTek, a technology company building voice-recognition software roughly equivalent to that driving Apple's Siri system.

Such tie-ups are increasingly important as the push towards 4G services gains pace. China Mobile had 75.6m subscribers to 3G services by October 2012, up from 59.6m at the start of the year.

However, China Telecom boasts 155.5m subscribers using 3G, and China Unicom has a further 70m. These firms both offer Apple's iPhone, while China Mobile remains in negotiations about doing so.

"China Mobile and Apple still have to solve many issues, such as the business model, articles of cooperation and revenue division, but I believe we will reach an agreement eventually," Li said.

According to Millward Brown's latest ranking of the 50 most valuable Chinese brands, China Mobile led the charts, although its net worth had declined by 20%, to $50.5bn, on an annual basis.

Data sourced from PC World/China Daily; additional content by Warc staff