The biggest threat facing Chinese mobile carriers are from non-carrier
companies such as Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG), says
Chuan Yu, an official of The Research Institution of China Mobile, a research
and development subsidiary of China Mobile Ltd. (NYSE:CHL), the largest wireless
operator in China. Mr. Yu made the comment during the China 3G Innovative
Applications Forum held in Beijing on December 3. He cites the fact that ten
years ago, China Mobile dominates the whole mobile value chain: from network to
platform to applications. However, with the rapid development of wireless
Internet, Apple Inc. (NASDAQ:AAPL), Nokia Corporation (NYSE:NOK), Google Inc.
(NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Research In Motion Limited
(NASDAQ:RIMM), and chip makers such as Intel Corporation (NASDAQ:INTC) are all
flexing their muscles in the value chain. "If such a situation persists,
traditional mobile carriers industry position will face significant threats, and
its very likely that we will really end up being the last pipes in the
communications network," said Mr. Yu. As the telecom industry enters the era of
3G and wireless Internet, the broad environment facing mobile carriers are
changing: traditional Internet companies and handset makers are leveraging their
expertise to start providing terminal-to-terminal services in wireless Internet.
In addition, companies like Apple and Google have become the leaders in this
space. Their ability to innovate is very difficult for mobile carriers to catch
up with. Mr. Yu further believes if Chinas mobile services are all run on the
platforms of Google and Apple, then information security will be at risk, and
mobile carriers will lose their control of the value chain. He believes Chinese
wireless carriers such as China Mobile Ltd. (NYSE:CHL), China Telecom
Corporation Limited (NYSE:CHA), and China Unicom (Hong Kong) Limited (NYSE:CHU)
should cooperate in some aspects despite the competition among them.
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