Viewpoint

1. The consumer subjects of mobile phones are changing from the high-end group to the low-end consumers. As a modern communication device, mobile phones become more and more popular.

2. In 2000，the dominant competitive measures of mobile phone operators is the transformed price reduction. By leveraging the right granted by the government to adjust the price within the scope of 10%, China Unicom becomes more aggressive in the price competition. China Mobile usually takes a follow-up strategy in price war and meets the challenges in a transformed way by providing the price package to avoid the interference from the authorities.

3. In 2000, the model-specific agent system is the dominant mode in the mobile phone supply market that helps to keep a stable price and avoid the intense competition.

4. In 2001, WAP handsets with a hybrid of information resource, user-friendly interfaces and reasonable charges will be shipped in large scale. Personalized handsets are a favorite among the youths.

I. An overview of the mobile phone market

1.market environment

a. Economic environment

b. Industrial environment

c. Technical condition

d. Policy and regulations

2. Market size

a. Gross demands

b. Gross sales values

3. Market structures

a.       Structure of consumer groups

b.      Structure of Brand distributions

c.       Structure of Regional distributions

d.  Structure of Market segments

Chapter Highlights

This chapter provides an intensive analysis on the environment of China ‘s mobile phone market by focusing on the gross demand, gross sales volume, the structure of consumer group, the brand distribution and segmented markets. The study reveals that China’s mobile phone market will sustain a healthy and rapid growth rate. By the end of 2000, China’s mobile phone user base will amount to 70.864 million. At the same time, it is revealed that the concentration degree of China’s mobile phone market will fall dramatically.

The concentration ratio of the top 3 groups in China’s mobile phone market was above 90%, 82.7% in 1999 and falls to 72.7% in 2000. The mobile market is in the fast growth period.

II. Demand Analysis of mobile phone market 2000

1.     Demand analysis of mobile users

a.       Gross Demands

b.      Binding powers

c.       Demand structure

d.  Demand characteristics

2.     Analysis of user behaviors

a.       Consumer motivation

b.      Consumer behavior

c.       Consumer evaluation

d.  Consumer expectation

Chapter Highlights

This chapter provides analytical insights into demands of the mobile phone market in terms of user demands and user behaviors. The study shows that total demand in 2000 is 38,438,600 sets, consumer demands holds a robust growth. In 2000, the mobile users are pursuing a practical consumption. In terms of the price levels, both the middle and low levels hold an admirable market share.

III. Analysis of mobile phone operations market 2000

1. Overall condition of mobile phone operations market

a.    Total Traffic volume

b. Total fixed-assets investments

c. Communications capacity

2. Comparison of China Unicom and China Mobile

a. Overall comparison

b. Comparison of traffic volume

c. Comparison of user growth rates

d. Comparison of fixed-asset investments

e. Comparison of communication capacity

f. Comparison of production efficiency

3. Competitive situation of mobile operation market

a. Price competition

b.    Business expansion

c.    Promotion measures

d.    Advertising strategy

Chapter Highlights

This chapter describes the overall condition of mobile phone operations and focuses on the strengths and competitive strategies of two major mobile phone operators in China. The study indicates that although China Unicom holds a lower market share, (73.55% for China Mobile, 26.45% for China Unicom); its user base is growing faster than that of China Mobile, China Unicom is rapidly growing up. The study also unveils that, in terms of promotions, both China Mobile and China Unicom have been presenting diversified preferential price policies surrounding the themes of price and service. In terms of advertisement, China Mobile attached more importance to large roadside plate advertisements, while China Unicom preferred to place advertisements in a more casual manner in waiting booths.

 

IV. Analysis of the mobile phone supply market 2000

 

1. Overview of the mobile phone supply market

a.   Gross supply

b.  Supply structure

c. Supply factored. Supply Characteristics

2. Competition in the mobile phone supply market

a.       Product competition

b.      Technology competition

c.       Brand competition

d.      Price competition

e.       Sales competition

f.        Service competition

3. Characteristics of mobile phone supply

a.       Product features

b.      Price features

c.       Sales features

d.      Technology features

Chapter Highlights

Analysis shows that supply outmatches demand, new models are emerging more and more faster，sale price is dropping gradually. The agent system by model is the basic feature of the mobile phone supply market and stimulates the competition in the market. This chapter touches on the overall condition of the market through an assessment of the above.

V. Forecasts of the mobile phone market 2001-2003

 

1. Factors influencing the development of the mobile phone market

a. The influence of demand

b. The influence of technology

c. The influence of policy and regulation

d. The influence of macro environment

e. The influence of Investment scale

2. Trends in the development of the mobile phone market

a. Developmental trends of technology

b. Developmental trends of market competition

c. Diversified business development

d. Trends in price changes

3. Forecast of China mobile market

a. Volume projection

b. Structure projection

c. Function projection

d. Price projection

Chapter Highlights

In 2000, mobile phone manufacturers and operators are generally sanguine about its future; they have all increased their investments in China mobile market under the increasingly intensified market. Motorola, the largest mobile phone provider in China, has brought in 160 hundred million Yuan and will further expand the capital。 WAP is hype rather than a brisk sale; however, the mobile Internet is the future trend. With applications of GPRS technology and the well-rounded operation of ICP, WAP users will reach 3000 hundred million by 2002; mobile phone users will sustain growth in 2001. By the end of 2001, its user base will stand at 10,955 hundred millions, with 3,878.6 hundred million new customers.

VI. Analysis of Development strategy of the mobile phone market

1.     To strengthen macro control

2.     To encourage technical innovation

3.     To implement differentiation marketing strategy

4.     To execute the precise product positioning

5.     To rationalize the channel distribution

6.     To carry out successful promotions

Chapter Highlights

To strengthen macro control and encourage technical innovation should be the strategy for the development of China’s mobile phone market. To execute the precise product positioning, rationalize the channel distribution, carry out the successful promotion in cities and implement differentiation marketing strategy is the definite demands of both the users and the market competition.  Based on the above analysis, it provides the specific measures and solutions.

Data

Figure 1       Age distribution of mobile phone user base

          Data Source：CCID

In terms of the age groups, the 26-30 year age group is the leading segment with the highest penetration of mobile phones, accounting for 29.8%. The mobile user base tends to be younger in comparison to the data in 1999. Those younger than 20 accounts for 5.2% in 1999, its rises to 7.3% in 2000. The 21-25 year age group held a share of 20.4%, it climbs to 22.6% in 2000.。

Figure 2  Factors evaluated by users at the time of buying handsets

    Data Source：CCID

In 2000，factors users will evaluate when they choose to buy handsets include voice quality (62.3%), price  (58。6％) and model (37.9%) . In addition, one third of users give priority to brand prominence (34.8%) and multiple functions (28.9%).

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