internal and external analysis of China Mobile's new five model terminal strategy

As China Mobile releases its new end-purchase white paper, China Mobile's end of the new strategy has caused a lot of controversy, especially China Mobile from June storage models must support the five-mode ten-frequency this request to get many interpretations, and some confusion, so that many people do not touch the mind, some people read even misleading.

My personal analysis, China Mobile to adjust the terminal strategy mainly stems from the following three internal causes.

First of all, we should be clear that the LTE or 4G real outbreak should be in the second half of this year, that is, starting from July, with the China Mobile 4G Network in the first-line city full opening and coverage of further promotion, 4G terminals will also explode a higher sales, If from China Mobile plans to sell 100 million 4G terminals, 70% will be in the second half of the sales realized. And from the terminal manufacturers point of view, most manufacturers of LTE terminals will be listed in the last six months. In addition to the very radical cool faction and other few manufacturers, most manufacturers in LTE is sound, rain, the main reason is to consider the network coverage and look at the real reaction in the market. Including the mobile network there are many new changes, such as the support of VoLTE, NFC and other aspects of the market support, etc. need to be further clear before the scale of the launch of products.

Second, handset manufacturers in the introduction of Terminal mode more cautious, must take into account the three major operators of the comprehensive needs and user needs, the current three major operators in China are operating and building the world's most complex communications network, so that terminals have to face more complex network environment. In addition to the future network evolution, competition and meet the global roaming factors, four-mode or five-mode terminals become the necessities of the three major operators in China. In such a situation, chip manufacturers invariably put their energies on the development of multimode chips, the multimode chip is more mature in technology and cheaper in price, at the same time, in order to reduce the related research and development cost, the terminal manufacturer is willing to adopt the Multimode chip manufacturing terminal to meet the needs of all operators and users. After all, Chinese Unicom and China Telecom in the second half will also start to exert 4G terminal sales, the previous three-mode terminal (not supporting WCDMA and FDD LTE) is very inflow. Of course, this market has not disappeared, but the move is not the collection of subsidies, but into the social channel sales.

Third, for China Mobile, the development of LTE become the current most important work, so in the terminal subsidy concentrated advantage, exerting five die terminal, can effectively drive the enthusiasm of the manufacturers, and further lower the price of products, so that the three operators in the 4G competition more advantages. More crucially, subsidized contract users are more able to become real 4G users, who are more receptive to the five-mode mobile phones that can roam around the world when choosing a mobile phone. Therefore, China Mobile made such a consideration is to fully understand the needs of users. It can also be said that China Mobile is also taking advantage of this adjustment opportunity to attract high-end users.

In addition to the above three internal causes, I think there are three external causes are the key to the strategic adjustment, indispensable.

First: Chip mature and competitive full

About mobile procurement of five-mode multi-frequency terminals, in the chip layer industry to give two different voices, some say for Qualcomm benefits, and some say for Qualcomm disadvantage. Why is there such a completely different view, I do not think that we have fully considered the new changes in the current chip-level competition, more still consider the issue of licensing level, and this problem is not a short-term solution.

Why, because for China Mobile, it is impossible to put such a huge demand for terminal chips on the Qualcomm family, although Qualcomm in this area is the undisputed boss, but for operators, the real need is the participation of multiple chip manufacturers and full competition, so that will not controlled.

So, this time, China Mobile changed its strategy, the collection must support five model mobile phone is fully explained that China Mobile has carefully evaluated the current multimode chip supply and competition.

And from the actual situation, compared with the TD-SCDMA chip supply situation, today's LTE chip supply has a significant difference. Previously mentioned LTE terminal size sales will be concentrated in the second half, as long as the chip manufacturers can start in the second quarter of the size of the supply can be. And the first half of the overall volume is not large, Qualcomm, such as a small number of suppliers can be satisfied.

According to this time schedule, as well as each manufacturer announced the supply timetable, MAVELL,MTK, exhibition, Bo Tong and Heiss and other manufacturers will gradually start to scale in the second quarter supply, just can catch up with the 4G terminal in the second half of the small climax of sales. Moreover, the latter half of the year is not only mobile five model, Unicom and telecom four-mode or five-mode mobile phone will also start to walk volume.

For Qualcomm, China Mobile's collection of handsets last year, though high, were very small. And to the last six months, 4G terminals on the amount of time, each vendor competition began to fully, the price is expected to further pull down, which is China Mobile most happy to see, in fact, is also a technology to mature, the inevitable result of the beginning of a full competition.

Second, the channel diversified basic molding

After several years in the three major operators at the gathering level of operation and the development of electric business channels, social channels, by 2014, China's Terminal channel sales have become a diversified perspective. Among them, the carrier channel accounted for 50%, became the mainstream. Social channels (offline channels) accounted for 30%. The electricity quotient channel occupies the ratio 20% (the large electricity merchant and the enterprise own electricity merchant channel).

Diversification means that the diversification of the market, but also means that manufacturers can launch a variety of formats to meet the needs of different users, operators can also focus on subsidies. In addition to China Mobile collection of five-mode terminals, three-mode terminals, four-mode terminals have a large demand, social channels and electrical business channels can become the main sales, because the three-mode terminal in the price has more competitive advantage.

Third, the terminal manufacturer competition enters the white-hot stage

The key point of China Mobile's ability to make a big adjustment to its terminal strategy is that the competition in the Chinese mobile phone market has already entered a white-hot stage, and all those who want to stay in the market and want to gain a bigger share of the market are no longer turning a blind eye to China's mobile LTE, which is the Samsung, LG, Sony, Huawei, Cool faction, Lenovo, VIVO, OPPO, ZTE, Tian language and other mainstream manufacturers have launched the top five-mode mobile phone, which gives China Mobile great confidence, but also confirmed the previous mentioned terminal manufacturers in order to compete for the needs of the introduction of Multimode products to meet the needs of multiple operators, Despite the higher cost, the cost of using five-mode chips may not be high compared to the costs of research and development and promotion.

So for the Chinese market, which sells up to 400 million handsets a year, handset manufacturers have to weigh the three operators strategy and user needs, to carefully assess market demand and the development of the entire industrial chain, the formulation of a reasonable product and market strategy to adapt to market competition, to avoid the operator's strategic adjustment caused by unnecessary loss.

(Responsible editor: Lu Guang)