Page 268 - 2017 White Paper
P. 268
7 White Paper on the Business Environment in China
2.6 Information and Communication
Technology
Introduction world’s second-largest economy as a big growth driver
for their business, its mature smartphone market has
Consumer electronics play an started to slow down due to high market saturation and
important role in inventory build. At the top of the handset manufacturers’
China’s economy. Acer CEO Gianfranco Lanci was quoted sales heap as of first quarter 2016, Huawei now leads
by China Daily in December 2010 as predicting that the with 15.8% market share, followed by OPPO (12.6%) and
mainland market would become the world’s largest Xiaomi (12.2%), trailed closely by Vivo (11.9%). Apple
within three years. The same article cited a projection by ranks fifth with 11% market share (Kharpal 2016).
research firm IDC that the market would grow“21 percent
this year from last year’s 54 million units”. Also notable is the ongoing implementation of the
4G standard in China. In late 2010, China Mobile began
China’s information technology sector continues to a Ministry of Industry and Information Technology-
develop. The total value of exported software and services approved trial of its 4G network in Beijing, Shanghai,
was estimated at $1.8 billion in 2006. In 2008, this figure Hangzhou, Nanjing, Guangzhou, Shenzhen and Xiamen
was projected to grow by more than 30 percent through (Lococo 2011). By 2013, 4G infrastructure was under
2011. January to July of 2011 saw a year-on-year growth construction. In August of that year it was reported
rate of 15.7 percent in exports, accounting for in excess that “Shenzhen-based Huawei and cross-town rival ZTE
of $15 billion. Revenues in the sector were reported to have obtained about 25 percent each” of China Mobile’s
have grown by 29.6 percent to reach 958.8 billion yuan estimated $3 billion effort to upgrade its network. Foreign
(approximately $152 billion) in the same period (Xinhua firms, meanwhile, accounted for an additional third of the
2011a). overall value of the contracts awarded (Reuters 2013).
According to the U.S. Foreign Commercial Service, “The first wave of 4G investments that began in 2010
the software industry is a major focus of the central in Japan and Korea favored Ericsson and NSN, while the
government but remains diverse and“highly fragmented”, second in the United States went largely to Ericsson
with the PRC, with the National Copyright Administration and Alcatel-Lucent. Huawei won a chunk of Europe’s 4G
reporting an estimated 80,000 registered software contracts [in 2012]”, writes Reuters (Lee 2013).
products as of 2010 (Xinhua 2011b).
The infrastructure upgrade was suggested by some
Finally, China’s telecommunications sector is of to be a precondition for China Mobile to offer Apple’s
continuing interest for both foreign and domestic firms, popular iPhone handsets to its customers. Less than six
although foreign firms remain barred from offering months later “Chinese regulators awarded 4G wireless
telecommunications services to consumers, effectively licenses to China Mobile Ltd., China Unicom Hong Kong
limiting foreign participation to selling handsets and Ltd. and China Telecom Corp Ltd., removing the final
accessories to the Chinese market (Barboza 2008). stumbling block to a deal that industry observers had
long expected” (Vlastelica and Carsten 2014).
Mobile handsets also figure greatly into China’s
machinery and electrical equipment manufacturing. According to market research firm Forrester, “China
In 2016, while China still remains the world’s largest Mobile could gain 17 million new iPhone activations in
smartphone market and many manufacturers still see the 2014 alone”, while it is also expected to be a“much-needed
268
2.6 Information and Communication
Technology
Introduction world’s second-largest economy as a big growth driver
for their business, its mature smartphone market has
Consumer electronics play an started to slow down due to high market saturation and
important role in inventory build. At the top of the handset manufacturers’
China’s economy. Acer CEO Gianfranco Lanci was quoted sales heap as of first quarter 2016, Huawei now leads
by China Daily in December 2010 as predicting that the with 15.8% market share, followed by OPPO (12.6%) and
mainland market would become the world’s largest Xiaomi (12.2%), trailed closely by Vivo (11.9%). Apple
within three years. The same article cited a projection by ranks fifth with 11% market share (Kharpal 2016).
research firm IDC that the market would grow“21 percent
this year from last year’s 54 million units”. Also notable is the ongoing implementation of the
4G standard in China. In late 2010, China Mobile began
China’s information technology sector continues to a Ministry of Industry and Information Technology-
develop. The total value of exported software and services approved trial of its 4G network in Beijing, Shanghai,
was estimated at $1.8 billion in 2006. In 2008, this figure Hangzhou, Nanjing, Guangzhou, Shenzhen and Xiamen
was projected to grow by more than 30 percent through (Lococo 2011). By 2013, 4G infrastructure was under
2011. January to July of 2011 saw a year-on-year growth construction. In August of that year it was reported
rate of 15.7 percent in exports, accounting for in excess that “Shenzhen-based Huawei and cross-town rival ZTE
of $15 billion. Revenues in the sector were reported to have obtained about 25 percent each” of China Mobile’s
have grown by 29.6 percent to reach 958.8 billion yuan estimated $3 billion effort to upgrade its network. Foreign
(approximately $152 billion) in the same period (Xinhua firms, meanwhile, accounted for an additional third of the
2011a). overall value of the contracts awarded (Reuters 2013).
According to the U.S. Foreign Commercial Service, “The first wave of 4G investments that began in 2010
the software industry is a major focus of the central in Japan and Korea favored Ericsson and NSN, while the
government but remains diverse and“highly fragmented”, second in the United States went largely to Ericsson
with the PRC, with the National Copyright Administration and Alcatel-Lucent. Huawei won a chunk of Europe’s 4G
reporting an estimated 80,000 registered software contracts [in 2012]”, writes Reuters (Lee 2013).
products as of 2010 (Xinhua 2011b).
The infrastructure upgrade was suggested by some
Finally, China’s telecommunications sector is of to be a precondition for China Mobile to offer Apple’s
continuing interest for both foreign and domestic firms, popular iPhone handsets to its customers. Less than six
although foreign firms remain barred from offering months later “Chinese regulators awarded 4G wireless
telecommunications services to consumers, effectively licenses to China Mobile Ltd., China Unicom Hong Kong
limiting foreign participation to selling handsets and Ltd. and China Telecom Corp Ltd., removing the final
accessories to the Chinese market (Barboza 2008). stumbling block to a deal that industry observers had
long expected” (Vlastelica and Carsten 2014).
Mobile handsets also figure greatly into China’s
machinery and electrical equipment manufacturing. According to market research firm Forrester, “China
In 2016, while China still remains the world’s largest Mobile could gain 17 million new iPhone activations in
smartphone market and many manufacturers still see the 2014 alone”, while it is also expected to be a“much-needed
268
