06/02/2008

Windows 3G mobile phone sales to boom up

China is the largest 3G mobile phone market in the world, with 583.5 million users at the end of April, according to figures from the Ministry of Industry and Information.

Benjamin Tan, director of Microsoft’s Mobile Communications Business in China, said the company is also teaming up with local retailer D.Phone to open retail stores in China selling various phones using the Windows Mobile software.

Microsoft has opened nine such stores with D.Phone since October 2007 and plans to open a total of 50 by July of 2009.

In addition, Microsoft has opened 21 retail outlets selling 3G mobile phones with electronics distributor Digital China Holdings Ltd.

The retail stores represent a new sales model tailored to the China market, where most consumers buy their phones and operator subscriptions separately.

“Greater China is different from North U.S and Europe. Operators are not as involved in promoting phones to consumers,” Tan said.

Demand for advanced smartphones that carry the Windows Mobile operating system will be boosted in China by the introduction of third-generation wireless services, which allow a higher-speed mobile connection, Tan said.

The Internet habits of China consumers show they are particularly well-suited to take advantage of the faster connection speeds that a 3G phone would provide.

For instance, 80 percent of China consumers use the Internet for streaming media, the highest percentage in the world, while less than 50 percent use the Internet for email, Tan said.

“The China do not have the same legacy that almost holds back other markets from broad adoption of the latest technology, and we believe that when fast connections are available on 3G mobile phones this will carry over very naturally,” Tan said.

Over the weekend, China announced a restructuring of its telecommunications industry that will merge six telecom companies into three. Once the restructuring is complete, the government will issue licenses for 3G services.

MICROSOFT Corp. expects sales of 3G mobile phones with its software in China boom up in the next fiscal year beginning July from close to 2 million units estimated for the year ending June 30, a company executive said yesterday.

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Chinese Mobile Market Wants More 3G Mobile Phones

The carrier also reportedly intends to open its TD-SCDMA retail sales in the pilot cities to manufacturers Yulong Computer Telecommunication Scientific (Shenzhen) Co. Ltd. , Samsung, LG, and ZTE, allowing them to sell mobile phones in its outlets. A deal with Yulong will have it stocking Yulong handsets in 20 percent of its outlets by the end of this month and 50 percent by the end of June.

The announcement comes as the Chinese government has finally unveiled its long-awaited plans to reorganize the country’s operators before issuing 3G licenses. (See Chinese To Get 3G – At Last!)

Chinese Mobile, which will merge with Chinese TieTong Telecommunications Corp. (formerly Chinese Railcom) under the restructuring, is expected to lead the deployment of Chinese’s homegrown 3G technology.

Chinese Mobile has been trialing TD-SCDMA in eight cities, including Beijing, since April 1 and will continue the pilot until July. It’s invested 14.2 billion yuan renminbi (US$2.04 billion) in the technology so far.

This second round is larger than the first phase at the beginning of the year, when the carrier bought 60,000 handsets and 15,000 data cards for the trial from six suppliers: ZTE Corp. (Shenzhen: 000063 - message board; Hong Kong: 0763), Lenovo Group Ltd. , LG Electronics Inc. (London: LGLD - message board; Korea: 6657.KS) , Samsung Corp. , Amoi Electronics, and Datang Telecom Technology Co. Ltd.

According to Xinhua Finance, the tender requires bidders to have licenses for TD-SCDMA handset production from the Ministry of Information Industry (MII), which have been awarded to around 30 manufacturers.

Chinese Mobile Communications Corp. has launched the second phase of a tender for TD-SCDMA terminals, this time for 100,000 handsets and data cards.

3G Notebook computers Get Down to Business

"Various influencing factors are transitioning to a point where embedded 3G will become superior from a cost perspective compared with previously used alternatives, such as Wi-Fi hotspots and hotel broadband for wide-area use," said Leslie Fiering, research vice president at Gartner.

Gartner said the high cost of the hardware and steep monthly charges have so far convinced businesses to shy away from investing in 3G Notebook computers. But the analyst believes this will start to change by the end of 2008.

"Our standing recommendation against embedding wireless WAN (WWAN) cards in notebook computers -- except for applications with a clear return-on-investment justification -- has been based on lack of global coverage, high costs and poor asset protection," said Ken Dulaney, vice president and distinguished analyst at Gartner.

"However, new technologies and pricing due by the end of 2008 have the potential to eliminate the problems of embedded, wireless 3G notebook computer purchases."

Gartner said 3G Notebook computers would become a viable proposition for "moderate to extensive travelers" in 2009 following the availability of chipsets that combine multiple technologies and frequencies to provide nearly "universal geographic coverage."

The analyst said such technologies promise a three-year "useful life." 3G operators are also beginning to recognize the value of going beyond two-year contracts to include daily and monthly rates, as well as programs for letting international travellers use local rates on pay-per-day plans, Gartner said.

Notebook computers with embedded 3G capability could become a must-have for businesses from next year, with new technologies and pricing plans making them more viable purchases, according to Gartner.

05/29/2008

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