The name is absent

Many factors contributed to the rapid development of China’s mobile phone
manufacturing. Following a similar framework as summarized by Cho et al (1998), we classified
success factors and examined the mobile communications sector as a whole. Here we combine
those factors listed as “competition” and “firm” in Table 4 into a broad competition category
while emphasizing another important factor - government policies.

Table 4. Summary of early-movers/latecomers’ advantages

Source: Based on Cho et al (1998)

Market

Local market conditions in China supported an immediate demand for mobile phones
when local producers entered the market in late 1998. Before the late 1990s, owning a mobile
phone was a rare luxury reserved only for leading bureaucrats or wealthy businessmen. But
since 1998, ordinary persons have gradually accepted mobile phones because of the sharp
decline in the mobile connection fees and mobile phone prices. In 1999, the total number of
mobile phone users reached 43.3 million and nearly doubled in one year, reaching 84.5 million at
the end of 2000. The number of China’s mobile phone users increases at least 50 million every
year. The increase of the user base creates a large handset market in China (Figure 4). Since
2002 China has had the largest telecommunications network in terms of both fixed and mobile
communications capacities. There were over 268 million mobile phone subscribers and 264
million fixed-line telephone users in China by the end of 2003. Even a small share of this large
market would support the growth of a large producer.

China's Mobile Handsets FINAL DRAFT 2006.sph ERSA2006 Greece

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