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 it's 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 China's 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.
tdp2664
China Analyst
Apple and Google Threaten Chinese Mobile Carriers’ Control of Value Chain
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