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Jul 20

Android and China, how the phone market will change in the coming years.

Written by guest on Tuesday, July 20th, 2010 at 10:39 am
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In the recent release of the highly praised iphone 4, many people thinks Apple will dominate the smartphone market for the next few years. For the most part that it true. RIM will cater to the corporate market. Microsoft will probably fall to the wayside with its botched launch of the Kin and its slow deployment of Windows Mobile 7 OS. Yet Apple makes oodles of money selling iphone4’s and ipads at a premium.

Android came out about 2 years ago and steadily rose up from being the niche smartphone to the ‘alternative’ smartphone. Mobile manufacturers like Motorola, HTC, Samsung, and LG clearly are in the game while other companies like Dell, Lenovo, and Acer will have smartphones down the pipeline.

But what does Android and China have do with this? After all, google (which developed Andriod) and China were at odds with the censorship issue earlier this year. Despite this, China has been embracing the Android market with open arms. They are creating Android services with their own email app stores, search engines and maps from google.

It all sounds nice, but how can an average Chinese afford can’t afford a phone from Motorola and Nokia and would rather buy a nice looking Shanzai phone for about $60? Cheaper chipsets. Recently lesser known companies like Mediatek, Rokchip, and telechips are coming out with cheaper solutions for the Chinese market. While ipads are sold at a premium of $500+ each, Chinese companies like Eken are selling them beginning at the $100 range. Next year we will probably see Android phones come out based on the cheaper SOC’s (system on chip) that will push the phones coming down starting at the $100 range. So Apple has alot to worry about from Android.

http://www.salon.com/technology/android/index.html?story=/tech/htww/2010/07/19/android_in_china


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20 Responses to “Android and China, how the phone market will change in the coming years.”

  1. Arimathéia Says:

    Android is the China’s best friend. Billions of dollars will come.

  2. S.K. Cheung Says:

    Even in the US, Apple has issues with the iPhone 4 now with the antenna/reception issues. Consumer Reports has panned the thing for now. Remains to be seen if there will be PR fallout from Jobs’ decision to offer free casings/bumpers in lieu of recall. However, when the dust settles, it will probably do well simply because of its capabilities, above and beyond the whole “cool” factor.

    That said, competition is almost always a good thing. Having an alternate OS with manufacturers keen on using it will eventually keep the prices down for everybody. Ultimately, the brand-conscious types (and this species exists in China as much as anywhere else) who can afford it will probably go Apple, whereas the masses will benefit from having more affordable choices which will do most, if not all, of the things an iPhone does. When that time comes, Apple can either lower prices (and margins) to protect market share, or not.

  3. mike Says:

    No one is chasing the ‘average Chinese’, but the 2-300 million middle class Chinese.

    And there’s no such thing as a nice looking Shanzai phone.

    I fail to see how China is embracing Android… 谷歌 pissing off the Chinese is the biggest reason their stock is a dud these days. Oh yeah, and deciding to compete against Steve Jobs in the first place. ;)

  4. mike Says:

    SK Cheung is right, Competition is a good thing. Unfortunately, Android has ripped off a ton of Apple IP with Android, hence the Apple vs. HTC lawsuit.

    Competition within the law is great.

  5. Wukailong Says:

    I’m note sure anyone have noticed, but the row between Google and China took a turn for the better just a couple of weeks ago. China renewed Google’s license and Google did something to allow users to access the Hong Kong page if they want to, and not if they choose not to. So, for those who believe Google is fundamentally anti-China (or anti-CCP) you can relax your anger towards the company a little bit!

  6. TonyP4 Says:

    Most copycats of iPhone and iPad use Android as the OS as it is free now. They are really good products today at affordable prices and give Apple huge problems in the long term. Some hardware components are from same suppliers to Apple but the software is entirely different but functional similar for most. Very interested to see how Apple handles the copycats from China.

    We’re amazed to see the speed in bringing up the copycats from China.

  7. jxie Says:

    Android’s license is Apache License, not GPL. The major difference is that GPL requires any developers using any existing GPL code to keep the development free and open, but Apache License doesn’t. Any third-party vendors legally can carry the Android code base forward and form their own ecosystems.

    Apple’s lawsuit against HTC is not much different than patent trolls such as NTP (successful) and SCO (unsucessful). Intellectual Properties my ass. Most of so-called patents were granted long before iPhone was even dreamed up — some even from Jobs’ hideout between his stints at Apple, NeXT. Apple’s game plan is simple — deter innovation for as long as possible so iPhone can gain the precious time to dominate the market. F**k them. They are now officially the tech “evil empire” #1, passing the old ones Microsoft and Google — no disrespect to you, WKL.

    So, for those who believe Google is fundamentally anti-China (or anti-CCP) you can relax your anger towards the company a little bit!

    How about those who thought Google was the beacon of “xxx”, “yyy”, “zzz” up on the hill?

  8. Wukailong Says:

    “How about those who thought Google was the beacon of “xxx”, “yyy”, “zzz” up on the hill?”

    Yeah, they too would need to reevaluate their ideas. I don’t think a corporation strives to do good – it strives to maximize its profits. On the other hand, the public should be ever vigilant for the excesses of #1.

  9. S.K. Cheung Says:

    To WKL:
    I actually think Google does strive to do good; well, at least they strive to do no evil. However, they get to define what is and isn’t evil. The regulators and everybody else can decide if and when their definitions aren’t up to snuff.

    With some significant lag time, I think regulators also eventually get around to addressing evil empires. It happened with Microsoft, and may one day happen with Apple. Hopefully, if required, they will intervene before they are left with the equivalent of a Netscape corpse.

  10. Charles Liu Says:

    Mike @ 3, on a trip last year I saw TV ads for “Red Apple” phone. It looked exactely like an iPhone, and cheaper.

    jxie @ 7, but most Chinese Shanzai Android phones and tablets still have IPR issues. Android license covers the OS only, not any of the Google apps and underlying services.

  11. jxie Says:

    First, HTC is hardly a Shanzai company. It owns a portfolio, albeit a small portfolio of patents as well. It countersuits Apple in the US, claiming iPhone violates some of its patents. It’s on Fast Company’s top 50 most innovative company list, and the only Taiwanese company on that list.

    Android provides third-parties the Linux kernel, the phone and the UI stacks. If Apple genuinely believes the truth is at its side, it would’ve sued Google, not HTC. But suing Google is much harder in the US. HTC being a foreign firm, is an easier nut to crack. It’s straight from the patent trolls’ manual — first sue the foreign companies.

    Jerome Lemelson, who is a legendary patent troll, started a “machine vision” patent application in the 1950s, and kept the application open for 3 decades. During which the patent application had grown larger than a typical US Congress Bill, which no sane human being can finish reading and fully comprehending it, without killing himself. What was sneaked into the finally approved patent was some verbiage that can be read as something like a barcode scanner. Bear in mind, he never had a working product of barcode scanner, and some original barcode scanner inventors suspected that he put the verbiage into the open application after barcode scanner was invented.

    Anyway, armed with the approved patent, he was on his way to collect his due. He never had any intention to build anything. First he sued some East Asian barcode scanner makers, but they just stopped selling in the US market. Then it came to him that he could sue the barcode scanner users. He approached the likes of GM and Ford, and demanded a license fee. Pretty soon he realized GM and Ford had much bigger legal budget to mess with on a shoestring budget. Eventually he hit his sweet spot, he was able to blackmail Japanese car makers into paying him royalty fees. From there, he sued and threatened to sue, to become a billionaire “inventor”.

    NTP, another patent troll, took the same strategy. It sued a Canadian firm, Research in Motion first. Eventually RIMM blinked and settled for a cool $612 million. It’s a nice living if you can manage it — you don’t need to build anything, you just need to ask directly those who create, and indirectly those who pay for their creations, to fund your lifestyle. What a broken system!

    Suing foreign firms first is not necessary xenophobia per se, but suing an American firm you will have this built-in indirect pressure from American shareholders and employees who can be at the losing end. Justice is a somewhat abstract concept, in any society…

    Anyway, back to Apple vs HTC, and the less talked about HTC vs Apple. If you look at it from a consumer’s angle, keeping HTC viable means paying less down the road. From Apple’s angle, it wants to stop if it can, if not delay or at least put some doubt into Android’s adoption. That way, it can maintain its ungodly margin on its products — cool products though, I have to admit.

  12. pug_ster Says:

    I doubt that Google wants to deploy google for ‘do no evil purposes.’ They are there to make a profit. Google made Android so that they can integrate their OS business with their advertising services and app store. The Achilles heel of Google is how open its os is so that anybody can just adopt the OS and skip google advertising services and app store. It can use baidu as its search engine, China mobile as its app store, and so on.

    In any case, I think the problem with the Android phones in the US is with support. Take the first Android phone in the states the G1 where HTC has supported the phone up to Android 1.6 and no farther. While some people didn’t like the ‘end of life’ support for the phone decided to create Android 2.1 for the phone. Other manufacturers who make Android phones seems to care more about releasing new models rather than supporting existing ones. Apple on the other hand has did a great job on supporting the phones. If you brought the iphone 3g, it is still supported today.

  13. TonyP4 Says:

    Phones are throw-away commodity and needs little support esp. on the software. It needs some support on the hardware and it is a total if the repair cost is high. Some copycat firms in China offer some support/warranty. It is limited as they’re not cost effective to repair a $50 phone.

    Microsoft is effective to iron out companies on the word processor and spreadsheet copycats that copy the functions with their own codes. As long as they stay in China, the intelligent phone copycats are much protected by China.

  14. pug_ster Says:

    TonyP4,

    I would disagree with you on that. 4 years ago I brought an Motorola Razr v3i and it was considered a very cool phone and I still have it until I recently upgraded to an Motorola Cliq XT. Even with the $50 throwaway phones, it is still not better than my Razr v3i. The Razr v3i is still considered a good phone because some people have created 3rd party firmware that unlocks more features. It is getting to the point where the low end phone’s market has matured and I would imagine where if someone makes a good, inexpensive android smartphone, someone will create 3rd party firmware upgrades for it too.

  15. TonyP4 Says:

    Hi pug_ster, the initial iPhone copycat had a lot of problems, but the recent models improve so much and it is quite cost effective compared to the real one. I argue most new models have better features than the old ones that they replace, smaller, lighter, taking advantage of 4G… The manufacturers have no desire to repair your old ones besides warranty but sell you a new one.

    Esp. in US where labor cost is that high, $50 is not cost effective as you can pay a little more for a better model after 2 years. However, it does not prevent independents to set up firms to repair and upgrade esp. in China.

    I do not know how many folks buy the new models because they want to look cool as the first owner of the new toy.

  16. Mike Smith Says:

    Android and Iphones are very expensive. I would not mind paying $100 for either of them!

  17. pug_ster Says:

    Looks like Kmart is selling an Android tablet for $150.

    http://kmart.shoplocal.com/kmart/default.aspx?action=detail&storeid=2421281&rapid=0&listingid=-2086512612&offerid=

    specs here:

    http://www.augenus.com/indexhome.html/GENTOUCH.html

  18. TonyP4 Says:

    It would make all the e-readers selling for similar prices obsolete and time to dump those stocks. Apple must have a emergency meeting on how to deal with the $150 price. Steve would check in ER and postpone his purchase of his new boat.

    Will see how reliable are the tablets. I carried a net book on vacation. Most hotels offer free wi fi but no cable connection for secured connection. So, a 7″ tablet can do the job well for vacation and it is the right size for me.

  19. pug_ster Says:

    http://www.thestreet.com/story/10852301/1/huawei-attacks-motorolas-turf.html

    Looks like huawei is releasing its first smartphone into the US market this coming month. The phone cost $150 without a contract and $50 with a contract.

    http://pdadb.net/index.php?m=specs&id=2562&c=huawei_ideos_u8150-b

    Interestingly, according to this website, it is releasing with a Qualcomm MSM7201A processor and not on Mediatek chipset. I would not be surprised if sometime next year if a phone with a mediatek chipset would knock the pricing even further.

  20. pug_ster Says:

    http://www.computerworld.com/s/article/9195278/Report_Sprint_rejected_Huawei_ZTE_for_security_concerns

    Looks like the US government doesn’t like it when Chinese companies wants to do business in the US due to ‘security reasons.’

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