Microsoft aims for mobile lead in China

23 March 2012

BEIJING: Microsoft, the information technology giant, is hoping to overtake Apple's iPhone and Google's Android mobile devices in China by focusing on making smartphones available at low prices.

The first Windows Phone, manufactured by HTC, went on sale in China earlier this week, and Microsoft plans to launch equivalent handsets with partners like Nokia, Samsung and ZTE in 2012.

"Our goal is number one," Simon Leung, Microsoft's chairman/CEO for the Greater China region, said, according to Bloomberg. "Having a goal to be number two is not really a goal."

As such, the US multinational intends to introduce smartphones costing less than RMB1,000, an extremely competitive price given a 16-gigabyte version of Apple's iPhone 4S commands nearly five times that at RMB4,988.

"We will continue to drive the price down," Leung said. He added that Microsoft would "definitely" roll out cheaper gadgets, with the "interim goal" of surpassing Apple and the longer term aim of pushing past Google to grab the leading position.

Estimates from IDC, the research firm, suggest the Windows Phone could take 7.5% of the Chinese smartphone category in 2012, lagging Apple's 12% and Google Android's 70%.

"The Windows Phone ramp-up in China won't really begin until the second quarter, so the numbers are still low," Wong said. "From next year the ramp-up will be more rapid."

IDC thus predicted that the Windows Phone should hold a 15% share in 2012, as Apple logs 13% and Google Android secures 66%. By 2016, the Windows Phone may grow to 20%, with Apple on 16% and Google Android on 60%.

Wong continued: "Windows Phone will have a lot of equipment manufacturing partners and more device choice at more different price points. That alone, as opposed to what Apple is doing, will give Windows Phone an advantage."

Elsewhere, Sandy Shen, an analyst at Gartner, the insights provider, argued Microsoft's comparatively slow start in the market meant adopting a long term outlook was essential.

"It's never too late for a really good product, but there are still improvements to be made on the Windows Phone device itself and to establish the ecosystem," said Shen. "It will take a while before people appreciate the offering."

The importance of China for smartphone brands was shown by recent reports forecasting that China would overtake the US to become the world's largest smartphone market this year.

Data sourced from Bloomberg; additional content by Warc staff