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Feb. 25, 2010

According to a new market study recently performed by JBB Research, the wireless and mobile market in China are expected to grow rapidly this year and in 2011. The research firm predicts that overall revenues will top about $18.2 billion by 2013, mainly from increased 3G and 4G network utilization, mobile application stores and more technologically advanced smartphones.

“As more and more competition around mobile apps stores starts to increase in the latter half of this year, we expect wireless carriers in China to agressively promote their own mobile apps stores in an effort to increase customer retention and capture a larger share of this growing business,” said Julien Blin, principal analyst and CEO of JBB Research.

He added “for mobile apps store providers like Apple and a few others, focusing more on developing Chinese-language mobile apps will be very critical in order to help them promote the popularity of their mobile apps store.”

In the JBB report, “The State of the Chinese Mobile Entertainment Market: Taking Advantage of the 3G, Mobile App stores and Smartphones Revolution,” the research firm says that it expects mobile advertising, location-based services (GPS), mobile payments and mobile TV and video services will drive revenue growth in China over the next three years and push mobile entertainment revenues from $6.5 billion in 2008 to well over $18.2 billion by 2013.

Also helping to further push revenue growth is an expected doubling of mobile entertainment subscribers in the world’s largest wireless market: China.

And despite the expectations for strong growth however, JBB did warn that the Chinese mobile market still has some road blocks to address, nevertheless.

Those include the current small penetration of 3G services and smartphones, a large proportion of low-income customers, mobile handset limitations for some featured phones, the generally high costs for both mobile data services and corresponding handsets and increased competition from free Wi-Fi networks.

The research firm also pointed out that China’s very stringent censorship rules and general level of fraud and corruption could severely limit growth of wireless entertainment services, nevertheless.

Last month, China said it's getting ready for a wireless data services frenzy, according to research firm iSuppli which predicts the country’s revenues already have increased almost 20 percent last year, and are expected to more than double in 2010, 2011, 2012 and well into 2013.

iSuppli added that it expects that overall data revenue in China from both messaging and non-messaging services will rise from $19.3 billion in 2009 and to $31.5 billion by 2010.

The research firm says there's no question that many Chinese wireless service providers will do well over the next 3 to 4 years.

Overall, non-messaging mobile revenues are predicted to exceed messaging revenue as wireless carriers expand mainstream adoption of 3G and 4G services, with iSuppli forecasting non-messaging service revenue will grow from $6.8 billion in 2009 to slightly over $20 billion in 2013.

As for mobile service carriers competing in that segment, iSuppli added that it expects China Mobile will begin to see its subscriber growth rate decline a bit as China Telecom and China Unicom place more competitive pressure on China Mobile, especially in non-messaging services, by leveraging their mobile network and handset advantages.

China Mobile is currently the world’s largest wireless carrier with more than 500 million customers.

“The rapid growth of China’s data and mobile services is being enhanced by the monumental spending of the nation’s mobile carriers on wireless infrastructure equipment,” said Will Kong, an analyst covering China research at iSuppli.

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Source: JBB Research.