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Emerging handset provider strategies in China

Tracey Chen | July 29, 2010
Competition between handset providers is intensifying in China.

Pressure is on the operators

In the 3G era, all operators realize the importance of the handset and have launched significant handset subsidy policies. Path I is beneficial for operators that maximize their bargaining power by partnering with weaker brands. In contrast, handset providers need to avoid relying too much on operator subsidies and should develop their core competencies to follow the second and third paths.

In the final analysis, the player that controls the user interface will win the lions share of margin. Handset providers are currently in a stronger long-term position, and operators must use their subsidy strategies to buy time to develop their own content offers and brand recognition. This would be impossible in a smaller market, but the sheer scale of their Chinese customer bases is an asset that few operators enjoy. 


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