presentation for meet up Mobile in China - What is going on within Chinese mobile market(http://www.meetup.com/Business-in-China/calendar/10606408/) Who should attend: * People who want to start / do business related to Chinese mobile industry * People who look for mobile business partners in China * People who develop mobile apps related to China or the Chinese market What you can expect: * Better understanding of the Chinese mobile industry, user mind-set, and more importantly the Chinese mobile culture * Knowing more ways to get the resources of mobile industry in China * Getting connected with others who are in this field or have the similar interest Agenda * Overview of Chinese mobile industry & culture: market, trends, regulations, hardware & software, iphone, android... * A look at ShanZhai Ji (Bandit cell phone): a China-only phenomenon that can't be ignored * Mobile App Pitch: make a pitch for your mobile app idea & product demo! see how high it can fly and get feedback, find partner, or simply show off * networking

1. Mobile in China
Shuai Quan & Kai Mai
July 15, 2009

2. Agenda
• Quick self-intro (5 min)
• Chinese Mobile Market Overview
• Business Model
• Networking / Break (15 min)
• Trends to Watch
• Conclusion
• QA, Announcement & Networking

3. Chinese Mobile Market Overview
• China has the largest 'pure mobile population' ‐ 670 million
subscribers, 400 million of whom does not own a personal computer
(MIIT 2009).
• China is also the largest mobile entertainment population – with
35% of the mobile subscribers in China who use their phones to
listen to music, compared to 6% in the US (M:Metrics 2008).
• China also happens to be the largest mobile Internet population –
with 117 million mobile subscribers who have accessed Internet
through mobile in China (CNNIC 2009).
• Lastly, China is the largest mobile operator ‐ feeding the 3G network
with $6.2 billion in 2009.

4. Existing Business Model in Chinese Market
Content
• Like Internet businesses in China, everything starts with content. In
the early days of Baidu, the largest Chinese search engine, over
70% of the traffic is brought by its 'free MP3 search & download'
service.
• The Chinese youth have been hungrily searching for content for
years and they are the 'alpha users' of ring‐tone and WAP surfing.
• As long as your content service is well packaged, those 35% of the
mobile subscribers who use their phones to listen to music will
come.
• Mobile TV is also popular
• SMS & Ringtone Primary revenue drivers.18 million SMS sent over
Chinese New Year in 2009
In US, content rules! Best example: iPhone App Within 9 months, i Phone application
downloads have reached 1 billion.

5. Existing Business Model in Chinese Market
Handset
• long waiting of 3G pushed the market to come up with alternative
business model other than content.
• In China, cell phones have never been sim-locked. Some phones
are bundled with plans and term agreements.
• Average cell phone turnover for Chinese youth is 6‐month

6. What to Watch in Chinese Mobile Market
• 3G
• Bandit cell phones
• Smart Phone Platforms
• Mobile Apps

7. 3G
• January 2009, 3G licenses were issued to just 3 mobile companies in
China. (China Mobile, China Unicom, & China Telecom)
• 3G coverage is not good at some cities. The network is still being
built out.
• 3G pricing consider expensive.
Examples of China mobile data plans:
50rmb ($7) for 500mb
100rmb ($14) for 1gb
200rmb ($28) for 5gb
300rmb ($42) for 10gb

8. Bandit Cell Phones
Good looking, practical and heavily loaded with all the latest technology
functions available‐WiFi, Bluetooth, external storage, 4.0 Mega‐pixels
Camera, dual sim cards, TV, and, let’s not forget, the 6 Stereo
Speakers set built-in

9. Bandit Cell Phones

10. Bandit Cell Phones – Olympic Theme

11. Agenda
• Quick self-intro (5 min)
• Chinese Mobile Market Overview
• Business Model
• Networking / Break (15 min)
• Trends to Watch
• Conclusion
• QA, Announcement & Pitch

12. Bandit Cell Phones
Closer look:
• Popular: 50% of the Chinese market; large export market in
developing countries
• Cheap but feature-rich, stylish: $80 - $200
• Creative: all the shapes, colors and trendy features
• Quick to market: 40 days to 60 days from concept to shipment
Why so cheap:
• Skip cell phone manufacture licenses from the Chinese government,
thus saving all the related costs
• Mediatek - key provider of bandit cell phone chipset components in
Taiwan; it has complete chain of core technology support for cell
phones

13. Bandit Cell Phones
Trends:
• Smaller factories are dying due to the global recession and increased
regulation in the export market by foreign governments
• The bigger bandi phone manufactuers start to build their brands and
images.
Bandit Cell Phone Platform
• Most of bandit phones are on Mediatek platform
• Lots of developers want to use Android, but it is not mature for
Bandit phones or other regular cell phones
• Rockchip will roll out new chipset supporting Android in Oct. It will
greatly lower the barrier of entry into Android-powered smart phones
Opportunities:
• Low cost smart phones
• Special-purpose cell phones and devices

14. Smart Phone Platforms
1. Symbian & Windows mobile are popular
3. OPhone: OMS(open mobile system) developed by China Mobile,
based on Android and localized for China, tightly integrated with
China mobile services (mail, music, contact, messaging, GPS,
TV(CMMB)
5. OPhone: Lenovo O1 (2G version) scheduled to roll out later this
month.
7. China Unicom – Uniplus OS
9. Where is Apple (next page)

15. Where is Apple
• Rumored to work with China Unicom which has the most expensive
3G data plan, no wifi; iPhone 3GS, 2-year contracts, costs $1000 -
$1100(appromiately $450 for the phone itself)
Challenges for Apple:
• Apple requires a credit card ( people are not used to own or use
credit cards online. They are more used to use Alipay (the 3rd
largest payment platform globally, has 200mil users, USA's
population is 300 mil)
• Chinese users are used to pre-paid plans. So the app purchase
usages will be higher if some amount of app purchase credit is
bundled with pre-paid plans.
• For business users, they don't want to purchase individual apps that
are billed on their company cards clearly.
• Chinese users are more used to billing through carriers (eg: purchase
ringtones, wallpapers)
• Government control.

16. Top Free Apps from iTune China

17. Top Paid Apps from iTune China

18. Mobile Apps (Finding from iTune Store in China)
• Entertainment, books, education and games are the most popular
categories
• There are some categories that don’t have many apps that are
designed for Chinese or in Chinese: Health Care & Fitness, News,
Business, Medical, Productivity, Sports
• Within Social Networking category, QQ, xiaonei, facebook, twitter and
fanfou are at the top ranks

19. Conclusion: What’s In It For Me?
Our take:
• There are definitely a lot of opportunities within Chinese Mobile
Market
• To be part of this journey, the best way is to be there, in the market!

20. Contact Us
Shuai Quan
Marketing & Business Consultant
LinkedIn: http://www.linkedin.com/in/shuaiquan
Kai Mai
Entrepreneur, Product Development and Management
LinkedIn: http://www.linkedin.com/in/kaimai