Table of Contents
Executive Summary
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- The mobile phone market
- Forecast
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- Figure 1: Mobile phone forecast, by volume sales, 2008-18
- Mobile phone market in China embraced prosperous growth in 2013
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- Figure 2: Mobile sales in China, by value and volume, 2011-13
- A lucrative market for smartphones
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- Figure 3: Non-smart phones and smartphones split, by volume share, 2008-13
- 3G capable mobile phones are the current mainstream - but the future lies with 4G
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- Figure 4: 3G and 2G capable mobile phones sales split, by volume share, 2011-13
- Market drivers and growth barriers
- The mobile app market
- A complex app market full of potential
- Market drivers and growth barriers
- Companies and brands
- Samsung leads while domestic companies are catching up
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- Figure 5: Top mobile phone companies, by volume share, 2012-13
- Commoditisation
- Major players in app market
- The Consumer: Mobile phone ownership
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- Figure 6: Smartphone and non-smartphone ownership, December 2013
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- Figure 7: Smartphone and non-smartphone ownership, by percentage shares of smartphone only users, non-smartphone users, and dual users, December 2013
- The Consumer: Operating system of current smartphone
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- Figure 8: Operating system of current smartphone, by percentage share, December 2013
- The Consumer: Price of current smartphone
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- Figure 9: Price of current smartphone, by percentage shares of price ranges, December 2013
- The Consumer: Consideration factors for buying mobile phones
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- Figure 10: Top three Important factors in choosing a mobile phone, December 2013
- The Consumer: Types of apps used
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- Figure 11: Frequently used types of apps, by category type, December 2013
- The Consumer: Attitudes towards mobile apps
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- Figure 12: Attitudes towards mobile phone apps, December 2013
- The Consumer: Attitudes towards mobile phone and apps
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- Figure 13: Attitudes towards mobile phone and apps, any agree, December 2013
- Key issue: How to reach different consumer segments in the mobile phone market
- Key issue: How to be successful in China’s app market
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- Figure 14: Attitudes towards mobile apps, by percentage, agreement on “I would like to see more mobile apps tailored for Chinese users”, December 2013
- Key Issue: The revolution on mobile payment
- What we think
The Mobile Phone Market
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- Key points
- Mobile phone market in China exhibited prosperous growth in 2013
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- Figure 15: Mobile sales in China, by value and volume, 2011-13
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- Figure 16: Average mobile phone price per handset, 2011-13
- A lucrative market for smartphones
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- Figure 17: Non-smart phones and smartphones split, by volume share, 2008-13
- Figure 18: Mobile phone volume growth rate, by non-smartphones and smartphones, 2008-13
- The start of 4G era
- 3G capable mobile phones are the current mainstream…
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- Figure 19: 3G and 2G capable mobile phones sales split, by volume share, 2011-13
- …but the future lies with 4G
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- Figure 20: 3G network registered users, 2013
- Market drivers
- National economic growth continues
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- Figure 21: GDP and growth rates, China, 2008-13
- Income rises in both urban and rural areas
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- Figure 22: Annual per capita net income and actual growth rate of urban and rural residents in China (RMB), 2008-12
- Demands of mobile population in modern life
- An internet savvy nation
- Development of mobile networks
- Growth barriers
- A dynamic market with technology development challenges
- Mobile phone platform and product innovation challenges
- Threats from copycats (Shanzhai)
- Forecast
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- Figure 23: Mobile phone forecast, by volume sales, 2008-18
The Mobile App Market
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- Key points
- A complex app market full of potential
- Market drivers – apps
- Booming smartphone market
- 4G opportunity
- App-friendly Chinese consumers
- Growth barriers
- The clash between free usage mind-set and profit model
- The competitive environment
- A motley variety of app stores
- Intellectual property concerns
Companies and Brands
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- Key points
- Samsung is leading the race in mobile phone market…
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- Figure 24: Top mobile phone companies, by volume share, 2012-13
- Figure 25: Top mobile phone companies, by value share, 2012-13
- …and its success lies in broad product ranges and understanding local needs
- Commoditisation
- Domestic brands emerge as strong contenders the smartphone segment
- Major players in app market
- Local platforms are leading downloading portals for Android
- Internet giants’ influence
- Company profiles: Mobile phone manufacturers:
- Samsung Group
- Apple Inc.
- Nokia Corporation
- Lenovo Group
- Xiaomi Inc.
- App platforms:
- Apple Inc. (iOS)
- Wandouja (Android)
- Internet companies:
- Tencent Inc.
- Alibaba Group
The Consumer – Mobile Phone Ownership
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- Key points
- Mobile phones are an essential part of consumers’ lives
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- Figure 26: Technology products ownership, December 2013
- Smartphones are the mainstream
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- Figure 27: Smartphones and non-smartphones ownership, December 2013
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- Figure 28: Smartphones and non-smartphones ownership, by percentage shares of smartphone only users, non-smartphone users, and dual users, December 2013
- Dual users tend to be young, single and on low incomes
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- Figure 29: Mobile phone ownership, by smartphone only and smartphone and non-smartphone dual users, December 2013
The Consumer – Operating System of Current Smartphone
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- Key points
- Android is the leading smartphone operating system
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- Figure 30: Operating system of current smartphone, by percentage share, December 2013
- No strong preference for Android and iOS by age and gender
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- Figure 31: Operating system of current smartphone, by gender and age, December 2013
- iOS/iPhone attracts higher income and better educated consumer groups
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- Figure 32: Operating system of current smartphone, by income, city, and education, December 2013
The Consumer – Price of Current Smartphone
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- Key points
- Around half smartphones used are mid-price
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- Figure 33: Price of current smartphone, by percentage shares of price ranges, December 2013
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- Figure 34: Price of current smartphone, December 2013
- Older women are prepared to spend on premium phones
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- Figure 35: Price of current smartphone, by gender, age and income, December 2013
- Consumers from tier one cities are more likely to own more expensive mobile handsets
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- Figure 36: Price of current smartphone, by city, December 2013
The Consumer – Consideration Factors When Buying a Mobile Phone
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- Key points
- Good value for money is top of mind when purchasing a mobile phone
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- Figure 37: Single most Important factors in choosing a mobile phone, December 2013
- High processing speed and configuration most important when aggregating top three factors
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- Figure 38: Top three Important factors in choosing a mobile phone, December 2013
- Large screen fantasy
- Demand for high quality cameras
- The question of colour
- For people who are willing to pay a premium for mobile phones, brand becomes the most important factor
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- Figure 39: Single most Important factors in choosing a mobile phone, by current mobile phone price, December 2013
The Consumer – Types of Apps Used
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- Key points
- Social, daily life services, entertainment, and payment/investment related apps are most frequently used
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- Figure 40: Frequently used types of apps, by category type, December 2013
- Social networking and instant messenger apps are the most often used apps
- Growth scale for daily life service apps
- Entertainment needs
- Mobile payment potential
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- Figure 41: Frequently used types of apps, December 2013
- Women and young people using social networking and instant messenger apps most frequently
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- Figure 42: Frequently used types of apps, by gender and age, December 2013
The Consumer – Attitudes towards Mobile Apps
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- Key points
- Half of consumers willing to try new apps
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- Figure 43: Attitudes towards mobile phone apps, on new apps, December 2013
- Word of mouth and recommendations help apps to increase usage
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- Figure 44: Attitudes towards mobile phone apps, on social influence on apps, December 2013
- Mobile app advertising is acceptable, but requires careful execution
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- Figure 45: Attitudes towards mobile phone apps, on mobile app advertising, December 2013
- Well-designed paid apps can have a broad appeal
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- Figure 46: Attitudes towards mobile phone apps, on payment of apps, December 2013
The Consumer – Attitude towards Mobile Phones and Apps
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- Key points
- International brands are still seen as better quality
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- Figure 47: Attitude towards mobile phone, on international brands, December 2013
- Consumers are looking for the latest versions of phones
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- Figure 48: Attitude towards mobile phone, on function and size, December 2013
- Apps with Chinese features appeal to consumers
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- Figure 49: Attitude towards mobile apps, December 2013
- More efforts required for mobile payment adoption
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- Figure 50: Attitude towards mobile apps, on mobile payment, December 2013
Key Issue – How to Reach Different Consumer Segments in Mobile Phone Market
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- Key points
- Consumer segmentation
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- Figure 51: Target groups, December 2013
- Status Aware (27% of sample)
- App Enthusiasts (25% of sample)
- Casual Users (24% of sample)
- Skeptics (24% of sample)
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- Figure 52: Attitudes towards mobile phone and apps, by Target groups, November 2013
- Different pricing strategies for different target groups
- Budget priced mobile phones should target Casual Users and Skeptics first…
- …and everyone fights in the mid-price range…
- …while premium positioned models should prioritise the Status Aware and App Enthusiasts
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- Figure 53: Price of current smartphone, by target groups, November 2013
- iOS/Apple is more appealing to the Status Aware and App Enthusiasts
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- Figure 54: Operating system of current smartphone, by target groups, November 2013
- What it means
Key Issue – How to be Successful in China’s App Market
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- Key points
- Lucrative but competitive app market full of potential
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- Figure 55: Attitudes towards mobile phone apps, on new apps, December 2013
- Be Chinese
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- Figure 56: Attitude towards mobile apps, by percentage, agreement on “I would like to see more mobile apps tailored for Chinese users”, December 2013
- Add social elements
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- Figure 57: Attitude towards mobile apps, by percentage, agreement on “Social networking apps are becoming an essential part of my life”, December 2013
- Find a sustainable monetisation model
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- Figure 58: Attitudes towards mobile phone apps, on payment of apps, December 2013
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- Figure 59: Attitudes towards mobile phone apps, on mobile app advertising, December 2013
- Select the right app downloading platforms
- Know your enemies
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- Figure 60: Attitude towards mobile apps, by percentage, agreement on “The hidden risks of copycat apps puts me off trying new mobile apps”, December 2013
- What it means
Key Issue – Catching the Revolution in Mobile Payments
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- Key points
- The potential of mobile payment
- The future of payment lies in mobile payment
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- Figure 61: Frequently used types of apps, by payment and investment related apps, December 2013
- Mobile payment is in its infancy
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- Figure 62: Attitude towards mobile apps, on mobile payment, December 2013
- Key players and types of mobile payment in China
- Future opportunity in NFC
- Future opportunity in mobile payment through apps
- Broader scale of coverage and applications
- Better understanding of consumers and hence more focused and targeted marketing
- What it means
Appendix – Mobile Phone Ownership
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- Figure 63: Technology products ownership, December 2013
- Figure 64: Most popular technology products ownership, by demographics, December 2013
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- Figure 65: Next most popular technology products ownership, by demographics, December 2013
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Appendix – Operating System of Current Smartphone
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- Figure 66: Operating system of current smartphone, December 2013
- Figure 67: Operating system of current smartphone, by demographics, December 2013
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Appendix – Price of Current Smartphone
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- Figure 68: Price of current smartphone, December 2013
- Figure 69: Most popular price of current smartphone, by demographics, December 2013
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- Figure 70: Next most popular price of current smartphone, by demographics, December 2013
- Figure 71: Other price of current smartphone, by demographics, December 2013
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- Figure 72: Price of current smartphone, by technology products ownership, December 2013
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Appendix – Types of Apps Used
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- Figure 73: Frequently used types of apps, December 2013
- Figure 74: Frequently used types of apps, by operating system of current smartphone, December 2013
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Appendix – Consideration Factors for Buying Mobile Phones
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- Figure 75: Important factors in choosing a mobile phone, December 2013
- Figure 76: Most popular important factors in choosing a mobile phone – Rank 1, by demographics, December 2013
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- Figure 77: Next most popular important factors in choosing a mobile phone – Rank 1, by demographics, December 2013
- Figure 78: Most popular important factors in choosing a mobile phone – Rank 2, by demographics, December 2013
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- Figure 79: Next most popular important factors in choosing a mobile phone – Rank 2, by demographics, December 2013
- Figure 80: Most popular important factors in choosing a mobile phone – Rank 3, by demographics, December 2013
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- Figure 81: Next most popular important factors in choosing a mobile phone – Rank 3, by demographics, December 2013
- Figure 82: Important factors in choosing a mobile phone, by technology products ownership, December 2013
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- Figure 83: Important factors in choosing a mobile phone, by price of current smartphone, December 2013
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Appendix – Attitudes towards Mobile Apps
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- Figure 84: Additional attitude towards mobile phone apps, December 2013
- Figure 85: Additional attitude towards mobile phone apps – Social influence on apps, by demographics, December 2013
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- Figure 86: Additional attitude towards mobile phone apps – Mobile app advertising, by demographics, December 2013
- Figure 87: Additional attitude towards mobile phone apps – New apps, by demographics, December 2013
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- Figure 88: Additional attitude towards mobile phone apps – Payment of apps, by demographics, December 2013
- Figure 89: Additional attitude towards mobile phone apps – None of these, by demographics, December 2013
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Appendix – Attitudes towards Mobile Phones and Apps
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- Figure 90: Attitude towards mobile phone and apps, December 2013
- Figure 91: Agreement with the statement ‘It is worth paying to have my mobile phone upgraded to the latest version’, by demographics, December 2013
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- Figure 92: Agreement with the statement ‘The bigger the mobile phone is, the more convenient it is to use’, by demographics, December 2013
- Figure 93: Agreement with the statement ‘Mobile phones that just provide the basic functions are more convenient to use’, by demographics, December 2013
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- Figure 94: Agreement with the statement ‘International mobile phone brands are of higher quality than China’s own’, by demographics, December 2013
- Figure 95: Agreement with the statement ‘It is worth paying more for mobile apps of higher quality’, by demographics, December 2013
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- Figure 96: Agreement with the statement ‘I would like to see more mobile apps tailored for Chinese users’, by demographics, December 2013
- Figure 97: Agreement with the statement ‘The hidden risks of copycat apps puts me off trying new mobile apps’, by demographics, December 2013
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- Figure 98: Agreement with the statement ‘Social networking apps are becoming an essential part of my life’, by demographics, December 2013
- Figure 99: Agreement with the statement ‘There is a lack of different mobile payment services/apps to choose from’, by demographics, December 2013
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- Figure 100: Agreement with the statement ‘There are a lack of places where i can pay via my mobile phone’, by demographics, December 2013
- Figure 101: Agreement with the statement ‘There is not enough information available on mobile phone payment’, by demographics, December 2013
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- Figure 102: Agreement with the statement ‘Mobile payment is just as safe as paying through traditional methods’, by demographics, December 2013
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Appendix – Further Analysis
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- Figure 103: Target groups, December 2013
- Figure 104: Target groups, by demographics, December 2013
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- Figure 105: Technology products ownership, by target groups, December 2013
- Figure 106: Operating system of current smartphone, by target groups, December 2013
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- Figure 107: Price of current smartphone, by target groups, December 2013
- Figure 108: Frequently used types of apps, by target groups, December 2013
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- Figure 109: Important factors in choosing a mobile phone, by target groups, December 2013
- Figure 110: Additional attitude towards mobile phone apps, by target groups, December 2013
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- Figure 111: Attitude towards mobile phone and apps, by target groups, December 2013
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