In 2008, photograph, music and Bluetooth transfer have become mobile phones' standard configurations. Mobile phones have more functions, such as DTV, mobile payment, GPS navigation, PTT talkback and wireless Internet access. Terminal manufacturers pay more attention to applications. Products equipped with electronic wallet, WiFi, Push-mail, DTV, PTT talkback, GPS navigation, information security and NFC/RFID emerged in the market. New technology available and new consumer demands gave way to the mobile phone application era.
In 2007, Apple debuted iPhone which featured an open technical platform, integrating a variety of content resources to mobile phones which bind users and contents, a core component in the application era. With the popularity of mobile Internet and its applications, more and more companies will follow Apple's steps in developing open technology platforms. In July, 2008, Nokia announced that the launch of its open OS that would integrate Symbian OS, S60, UIQ and MOAP technologies; and its members could use this mobile phone OS through free authorization. Nokia's decision broke the smart phone OS monopoly, as open technology platform become a competitive focus.
The Confusion of Scale and Profit
Advanced international manufacturers firmly stick to their position in the global market, with declining performances. On one hand, a weakening economic environment put the whole mobile phone industry in difficult times, with all international enterprises being seriously affected; on the other hand, manufacturers in new emerging market faces the dilemma of increasing output amid lowering prices, that although the international giants absorb most of the pressures to a fuller extent, smaller enterprises would still have to seek a subtle balance among scale, cost and profit.
Currently, both the upstream and downstream of China's mobile phone industrial sectors, particularly terminal manufacturers' profit space continued to shrink. Under an unfavorable economic environment, with demands slowing down, surging production costs and falling product prices, a considerable number of mobile phone manufacturers are seeing nightmarish performance figures, as reflected in the latest results of major mobile phone enterprises.
Compared with international giants, China's domestic mobile phone manufacturers are at the edge of survival. On one hand, the global market slowdown hit China's domestic mobile phone manufacturers, which are seeking opportunities in overseas market; on the other hand, due to a downturn in the economy and the rise of "shanzhai" products (a Chinese phenomenon referring to "non-brand" copycat products that feature multiple functions at incredibly low costs), traditional domestic mobile phone giants such as Bird and Amoi entered into a depressed situation, which is reflected by their dispositions of office buildings, shares or spin-off handset businesses. Under the attacks from foreign brands and shanzhai products, China's domestic mobile phone manufacturers are in the need of transition.
Manufacturers Move to 3-4 Tier Markets While Brewing Channel Innovations
Manufacturers' competition pattern and strategies directly affect the channels' trend in the future. In 2008, Nokia cooperated with Synnex Technology International to launch NFD; Samsung actively set up its own channel system; although Motorola had unfavorable sales, it has been paying close attention to its channel policy. All international manufacturers deeply understand that although they have occupied first and second tier cities' agents, retailers and consumers with their brand influence and product quality, the broad clime and different consumption habits determine whether they have the key to success.
Some China's domestic manufacturers have found their position in 3-4 tier cities and country markets since 2007. They become new black horses in mobile phone market through multimedia products with high performance price ratio, fashionable appearance with high configuration and high channel profits. Different from channel strategy adopted by foreign manufacturers, many of China's domestic manufacturers try their best to expand county and township- level market in 2008, through aggressively launching product publicity programmes through TV shopping and working with professional e-commerce websites in the market that focus on 3-4 tier market. It is expected that with the deepening of exploration to the 3-4 tier markets, as 3-4 tier market's main sales force, the share of professional mobile phone stores will gradually increase over the next few years. However, it is unlikely that China's domestic mobile phones would regain its sales peak as in 2003. When consumers build up some rational consumer awareness, China's domestic mobile phones' golden sales period will come to an end in the 3-4 tier markets. CCID Consulting forecasts that affected by scale, specialization and brand channel development trends and chain channels' rapid expansion, the mobile phone market will see more situation-mobile phone chain stores, appliance chain stores and operators' business hall.
