Microsoft Gains Insight into China’s Huge Mobile Market

REDMOND, Wash. – Feb. 19, 2009 – With approximately 650 million subscribers, China is the largest mobile market in the world. With that sizable opportunity as a backdrop, Microsoft is working to understand the way that Chinese culture shapes the ability to effectively market mobile devices.

To do so, the company is following an approach that emphasizes deeply understanding the characteristics of the Chinese market, say Sin Lew and David Lindheimer, respectively the general manager and the director for the Microsoft China Research and Development Group.

At the moment, the vast majority of China’s millions of wireless customers use China Mobile, which controls 70 percent of the market. Lew and Lindheimer say that there’s plenty of room for Microsoft to enter the game. But it will take a solid understanding of local users’ requirements.

Lindheimer says that his time spent in China has given him a good idea of both the potential and the complexity of the market. “There are lots of big, hyperbolic claims made about China,” he says. “But one thing I’ve learned living there for a year and a half is that with every layer you peel back, you learn a little bit more and get to the deeper truth.”

To gain share in China’s market, Microsoft must peel back those layers and understand their particular characteristics. For instance, in a country where cell phones far outnumber PCs, a mobile device becomes much more than a convenient hunk of plastic. Text messaging, rather than e-mail, is far and away the most common means of communication. A cell phone is a passport to friends and family, a tool to use the Web, even an extension of an individual’s identity. Says Lew: “People would rather lose their wallet than their cell phone. Their cell phone is a physical presence of who they are.”

Microsoft’sChina Research and Development group is gaining a better understanding of the Chinese market with help from its local partners and OEMs, Lew and Lindheimer say. And Microsoft is putting that knowledge to use as it gains a toehold in the mobile market in China.

An increasing number of device makers, including well-known international brands such as Samsung and Motorola – and key local brands such as dopod, Lenovo, and Amoi – have joined the Windows Mobile partner ecosystem in China and are offering devices with a broad range of designs and capabilities for different people and lifestyles.

Increasingly, Windows Mobile phones have gained success in the market and enjoy a strong reputation among Chinese consumers. For example, Microsoft worked with partners China Mobile and Samsung to customize the phone interface specifically for Chinese users. The Samsung i908E, Samsung’s first flagship device powered by Windows Mobile 6.1, is the first mobile phone in China with deep customization requirements for China Mobile. That includes a home page with dedicated buttons for China Mobile services, and the inclusion of China Mobile’s “139” push e-mail service – which expedites the use of mobile e-mail – as a standard account in messaging setup.

In addition, Microsoft worked with dopod on its Touch family series of devices, including Touch HD and Touch Pro, as well as with Motorola on that company’s Motorola Q8 and A3000 devices

In the retail arena, Microsoft is offering a new mobile phone purchasing experience to consumers in China through the opening of Windows Mobile concept stores. Developed in partnership with channel leaders such as D.Phone (the largest mobile phone retailer in China) and Digital China (the largest IT distributor in China), 35 concept stores have opened in 22 cities, offering demos of capabilities and user experiences, and showing the complete range of Windows Mobile devices in the market.

Meanwhile, the Chinese government, which recently restructured the telecommunications industry and opened the door for a more competitive environment, continues to push the country toward the information age and connect its cities and rural areas to the Internet. Says Lew: “Microsoft should invest and help connect those people and be part of that solution, so that as time goes by, our technology is the foundation that the infrastructure is built on.”

To that end, Microsoft continues its ongoing push to understand China’s unique characteristics. A little local knowledge could go a long way to bringing China into Microsoft’s larger drive towards integrated consumer experience across the Windows platform (PC, Mobile and Web) to serve a common purpose – connecting people to each other in unprecedented ways via the World Wide Web.