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Global mobile brands find lines busy in China (5)

(China Daily)

13:29, September 24, 2012

However, domestic rivals may not have the knowledge or skills to bring global ideas into the Chinese market to drive innovation - innovation from seeing all ideas and then adapting them to your own market, Zarrella said.

One of the key competition weapons that Chinese vendors resort to is price but price wars lead to lower profit margins and impose negative effects on branding, said Sabrina Ren, a research manager at Germany-based GfK Group.

"Apart from a few manufacturers, currently lots of Chinese brands rely on the turn-key solution from the chipset provider and do not have strong enough research and development capacity compared with global competitors," Ren told China Daily.

Internet companies

While what used to be movers and shakers in the global mobile phone making industry have been going downhill, an increasingly large number of Internet companies have made their way into the business.

Since last year, major Internet companies have come up with their own smartphones employing different tactics, including pre-installing mobile applications, providing mobile operating systems and making the handsets themselves.

"Applications are key to the future of Internet firms because more of their users access them through smartphones," said Duncan Clark, chairman of BDA China, a consultancy company that follows China's IT industry.

Tencent Holdings Ltd, China's biggest Internet company by revenue, and Chinese Web browser company Qihoo 360 Technology Co fall into the first category. They have teamed up with mobile phone markets to provide mobile phones with their services pre-installed.

E-commerce giant Alibaba Group and Baidu Inc, the largest Chinese search engine, set foot in the industry with their own operating systems, through which the two companies offer their own services.

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