China Becoming a Hotbed of Mobile Technology Innovation

By September 30, 2014
Chine mobile

Over half of China’s population now subscribe to mobile Internet, and the country is well on its way to becoming the largest player in mobile technology development and in the adjacent sectors.

China is home to the world’s largest population, with 1.3 billion inhabitants, and the country also boasts the biggest number of mobile phone subscribers. According to US-based market research, analysis and advisory firm International Data Corporation, the number of smartphones in use there should reach 420 million units during the course of 2014, close to 20% up on last year. With this booming consumer market, China also looks set to become a major player in mobile-related technologies, pumping investment into this sector in order to boost its competitive performance and so help to increase China’s overall competitiveness on the world stage. A recent report from professional services firm Deloitte indicates the scale of commercial progress in this field, revealing that the number of Chinese users subscribing at fixed rate tariffs increased by 87% between 2000 and 2013. China’s annual national economic growth has in fact been slowing for some years now, but local players are pushing ahead with initiatives to develop the Chinese mobile market and related businesses.

Thriving ecosystem encouraging innovation

That the Internet and mobile markets in China are booming owes much to the development of a powerful ecosystem. In a mobile market which is now the biggest in the world, user behaviour is encouraging further development. According to Deloitte’s recent report, fully 73% of Chinese mobile phone owners replace their device every 18 months, and, even more encouragingly for device makers, only 12% keep their mobile for longer than two years. This thirst for constant device updates, coupled with the country’s strong Internet penetration, looks like fuelling a continuing boom. However, for every 90 Internet subscribers, today 45 still have a traditional subscription. Mobile broadband network coverage has been progressing rather slowly up to now in China, with many subscribers accessing Internet services via non-mobile broadband networks. Moreover, since only a small percentage of the population can afford the most expensive smartphones, a number of low-cost alternatives are being developed that are driving innovation in the sector.

Chinese players make their mark

The highly promising figures reported for the mobile market in China are underpinned by the emergence of a number of innovative companies that are starting to achieve dominant positions in the mobile market and related sectors. The report highlights innovation in areas such as social network games on mobile, dating apps and messaging services. Shenzhen-based Tencent Holdings provides a wide range of services including social networks, web portals and online games. However, the company is perhaps best-known for its instant messaging service WeChat, which is now the most popular mobile text messaging app, with over 600 million users worldwide – 200 million outside China, according to a 2013 report. The report reveals that, based on the number of Google searches in 2013, WeChat now has more users than the Chinese microblogging site Weibo.  Meanwhile, on the hardware front, telecoms equipment manufacturer Huawei is now the number two worldwide behind Ericsson. In short, Chinese manufacturers and service providers that are developing mobile technologies are really making their mark on the international scene, attacking head-on the US giants Facebook Messenger, Apple, et al. If rapid access to high quality data is the key to economic development these days, the Chinese mobile industry is certainly making a major contribution to the country’s growth.


Legal mentions © L’Atelier BNP Paribas