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Global mobile brands find lines busy in China (7)

(China Daily)

13:29, September 24, 2012

The rush into the mobile phone industry came when the number of Chinese people accessing the Internet via mobile devices increased to a record high of 388 million at the end of June, out of a total Internet population of 538 million, according to a report by the China Internet Network Information Center.

Meanwhile, mobile phones have become the most widely used devices to access the Internet, boosted by the increasing popularity of smartphones and a large number of mobile applications, said the report.

"It is a great thing for the market with new companies such as Baidu and Alibaba entering the smartphone industry," said KPMG's Zarrella. Because of the participation of Internet companies, there is more industry innovation. "It is the beginning of the 'innovated in China' era and this is the most exciting thing," she added.

However, Kai-Fu Lee, former president of Google China, said most Internet companies providing mobile phones will see that part of their business fail.

"The two industries (Internet and mobile phone making) are completely different with different DNA," he wrote on his micro blog.

"A company cannot win users if its aim is not to satisfy users' needs but to present its own services. It will also be criticized if it doesn't integrate competitors' services that users like into their mobile phones."

There are questions about how well Internet companies can monetize their mobile services, BDA's Clark added.

C.K. Lu, senior mobile device research analyst at Gartner Inc, said the popularity of local services such as Baidu and Tencent's instant messaving service QQ lessens the advantage of global vendors in promoting their devices with complete Internet experiences in the way that the iPhone uses its iOS operating system. "The era of the ecosystem and cloud in fact helps local vendors to compete with global brands," he said.

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