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CCID ADVISORY
China’s Consumer Electronics Market
Overview
By Alden ChangPartner, CCID Consulting
ccidadvisory.com
c c i d a d v i s o r y . c o m 2
CCID ADVISORY Consumer Electronics Show
Mobile computing has become mainstream enough to begin affecting society …. Intel research has shown that women are
playing more of a role in technology buying decisions, favoring lighter notebooks with wireless capabilities, while men generally
prefer more robust desktop machines.
Keynote Address
“In the digital home … we all want to experience our digital content in the way we want to …. We don’t want to be stuck in one room.”
Craig BarrettCES Keynote 2005Intel CEO
c c i d a d v i s o r y . c o m 3
CCID ADVISORY Let’s Step Back
U.S. Consumer Evolution
China’s Consumer Evolution
• In search of the perfect solution: PC on a mobile phone.• Learning how to use mobile phones in society.
PCPC HomeHome CarCar PersonPerson
• The “good enough” solution.• Communications center is the mobile phone.
PersonPerson HomeHome CarCar
c c i d a d v i s o r y . c o m 4
CCID ADVISORY
Mobility in China:
It’s already here.
Things to Keep in Mind
c c i d a d v i s o r y . c o m 5
CCID ADVISORY Mobile Phone Subscribers
0
50
100
150
200
250
300
1998 1999 2000 2001 2002 2003
Mobile Phone Subscribers (millions)
In 2004, at over 310 million subscribers, is the year that exceeded entire population in U.S.
c c i d a d v i s o r y . c o m 6
CCID ADVISORY Market Spotlight
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008
Mobile Phone Shipments (millions)
Replacement cycle in some urban segments: down to 12 months.Diverging product features: Very sophisticated, or very simple.Projected 2004–2008 CAGR = 7.7%
Mobile Phone Shipments
c c i d a d v i s o r y . c o m 7
CCID ADVISORY Mobile Phone Market in China
100%73.8Total41.8%30.9Others8.6%6.3Samsung58.8%6.5TCL413.3%9.8Nokia313.4%9.9Motorola214.0%10.3Bird1
Market ShareShipments (millions)Vendor
2003 Competition Review
c c i d a d v i s o r y . c o m 8
CCID ADVISORY Market Spotlight
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2003 2004 2005 2006 2007 2008
Smart Phone Shipments (thousands)
High growth: Projected 2004–2008 CAGR at 46.3%.Targeted at more sophisticated users.
Smart Phone Shipments
c c i d a d v i s o r y . c o m 9
CCID ADVISORY Smart Phones in China
Product ReleasesNokia model 7610Panda model E88Dopod model 535Dopod model 565Lenovo model ET280Sony-Ericsson model P910cMotorola “Entertainment PDA” E680 China Mobile initiates smart phone standards for interconnectivity and interoperability
7.1%Others
3.2%Sony-Ericsson
5
3.4%Dopod4
5.5%Lenovo3
14.5%Motorola2
66.3%Nokia1
Market Share
Vendor
3Q 2004 Competition
c c i d a d v i s o r y . c o m 10
CCID ADVISORY Market Spotlight
Computer Shipments (thousands)
0
2000
4000
6000
8000
10000
12000
14000
16000
2003 2004 2005 2006 2007 2008
Servers NotebookConsumer Desktop Business Desktop
Projected 2004–2008 CAGR:Servers 18.7%; Notebook 31%Consumer Desktop 16.5%; Business Desktop 13%
Computer Shipments
c c i d a d v i s o r y . c o m 11
CCID ADVISORY Market Spotlight
(thousands units)
0
1,000
2,000
3,000
4,000
5,000
6,000
2003 2004 2005 2006 2007 2008
RP TV LCD TV PDP TV
Projected 2004–2008 CAGR:RP 36.8%LCD 77.1%PDP 58.4%
High-End TV Shipments
c c i d a d v i s o r y . c o m 12
CCID ADVISORY High-End TV in China
8.3%Toshiba5
8.4%Hisense4
10.4%LG3
10.5%Samsung2
11.7%Changhong1
Market Share
RP Vendor
11.5%Xoceco5
12.1%LG4
14.9%SVA3
20.5%Sharp2
23.1%Konka1
Market ShareLCD Vendor
3Q 2004 Competition
8.3%Samsung5
9.5%TCL4
12.3%Hisense3
16.5%LG2
24.6%Matsushita1
Market SharePDP Vendor
c c i d a d v i s o r y . c o m 13
CCID ADVISORY China Market Entry
Know your Core CompetencyKnow which of your core competencies are hard to copyBe open to new cultures, new ways of doing business, new marketsTreat China as a market that commodifies incredibly quicklyBut stay closer to your core competency than you would in the U.S. markets
Key Point #1
c c i d a d v i s o r y . c o m 14
CCID ADVISORY China Market Entry
Does your core competency apply to the China?1. Geography
Geographies more disparate than you expect—find those that fit you.
2. Market TierEconomic development of cities and provinces very disparate.
3. IndustryGood opportunities where industries are reforming with WTO as a driver.
4. ChannelsRapidly evolving, and differently in different regions, tiers, and industries.
5. TimingConstantly monitor the markets: China is rapidly evolving.Check out websites and news items such as ccidadvisory.com.
Key Point #2
c c i d a d v i s o r y . c o m 15
CCID ADVISORY China Market Entry
Know the CompetitionLots of itBoth multinational and Chinese companies“Coopetition” is the keyword
Offensive strategyDefensive strategy
Key Point #3
c c i d a d v i s o r y . c o m 16
CCID ADVISORY
Thank You