Mobile Technology Companies, Go to China

    

mobile_technology_companies_go_to_china.jpg

For most companies that are in the business of providing hardware for mobile devices or developing the software or services that run on them, dreams of working with Apple, Google, or Samsung may dominate your plans. It's natural - not only because they are the names we are most familiar with, but also because of where they are headquartered. Yet, if it were suggested that you set your sights on Chinese mobile OEMs (original equipment manufacturers) first, you might hesitate. Unfortunately, this is a mistake that many large and small technology companies make - particularly if you are selling products that are OS-agnostic or targeting Android, which, according to Gartner, Inc., now accounts for more than 86 percent of all smartphones manufactured in the world.

The truth is that most all roads now run through China as the portal to global distribution, and it should be your key focus. Consider this: if you look at the top-branded smartphone manufacturers, eight of the top twelve, by global market share, are Chinese companies, including the traditional majors such as Huawei, Xiaomi, TCL Alcatel, Lenovo, and ZTE as well as fast growing players like Oppo, Vivo, Meizu, Gionee, and others. This means that even if you want to break into the US and European markets or other global markets such as Asia, India, or South America, China is your best way to reach many of these markets.  

And the best news of all is that Chinese OEMs are anxious to find good partners to help them differentiate their products for global markets.

Before jumping on the plane to China, there are a couple tips to answering the question“Do I have a technology that China wants?”Let's take a close look at each of these areas.

Emerging Technologies

Technologies that capitalize on emerging trends or those that are able to create new ones are always appealing. Leveraging technologies like virtual reality, augmented reality, artificial intelligence, or anything else that expands the sensory bounds are attractive. Many analysts believe virtual reality will very soon be a billion-dollar market, and China OEMs want in now. Every Chinese smartphone manufacturer has a team or division focused on virtual reality right now.

Anything that can merge cutting-edge technology and mobility will likely attract the attention of Chinese manufacturers looking to differentiate themselves in the area of user experience. But keep in mind that Chinese OEMs are pragmatic and demand focused, and your technology must be very special if you want them to pay attention to anything that can’t make it on the next planning cycle.

The Basics

These days battery and camera technologies remain among the most sought-after products by Chinese mobile OEMs. Companies that have found ways to extend battery life and reduce battery size draw serious attention, considering that battery life is the biggest complaint among mobile phone users. Innovators in camera technology are equally attractive. If a company develops new camera technology or features that a mobile OEM can bake into its products giving end users more functionality, speed, features, or better images, then that will be highly welcomed.

Revenue Generators

It is no secret that the global smartphone market has been flattened as the competition has intensified. In the last eighteen months, each smartphone manufacturer has created, if it didn't already exist, a group focused on monetizing its huge distribution base. Applications that pay the OEM for each user or subscriber or have a revenue sharing model have gained a great deal of interest. This could be anything from a data provider providing users with weather information to a music provider with functionality in markets all over the world to a solution providing virtual sim cards and global roaming services for travelers. And anything that a China mobile OEM can distribute to its existing user base through "over-the-air" updates will also be appreciated.

But keep in mind a few points. Firstly, OEMs learned from watching some of Samsung's mistakes, and they shy away from hype, clutter, and much preloaded software or "bloat ware." However, if you have an embedded solution or are willing to work with an OEM to integrate a customized experience into its devices, the OEM would like to explore cooperation with you. Secondly, if you have something that can be monetized by leveraging the OEM's global distribution, then don't expect them to pay you any NRE (non-recoverable engineering fees) or up-front monies. In fact, it is more likely that the OEM will expect you to pay in advance. But, fortunately, everything is negotiable, so the details can surely be worked out.

Cost Savings

Technologies that provide cost savings are another area that has a high likelihood of succeeding in China. Software that eliminates the need for costly hardware is a great example of innovations that these mobile manufacturers are looking for. One example of a recent technology that has been successful is software that replaces the chip used to clean up and suppress background noise. Another is software that uses the existing camera to authenticate the user instead of relying on a fingerprint scanner. Relying on software instead of the hardware option, China manufacturers are able to reduce the build cost for the device.

Getting Noticed in China

So, your technology is attractive and fits in one of the above categories. What now?

No matter how big or small your company is, you have a greater chance of breaking into the Chinese smartphone OEM market than you do with Western companies. That is, if you approach it the right way.

A good option is to leverage a China based partner – a partner who knows the Chinese market and can help you get in front of the right people. A professional company can get you to market faster if it has years of experience navigating the tough China market, has a broad set of relationships, knows the people who are looking for what you have to offer and knows how to promote it. An effective local partner can also save you time, reduce your risks, and give you frank feedback on your solutions and strategies required to successfully engage the Chinese OEMs and market.

Ready to speak to one of our team members about expanding your business into the Chinese market? Request your consultation today.

Contact Us

About The Author

I am a technology executive with over 20 years of experience in China. I have worked with and advised close to one hundred Western consumer and enterprise technology companies on entering and expanding in the China market and partnering with China’s leading technology companies. In 2001, I founded Alliance Development Group (ADG) to assist emerging technology companies to expand their presence in China. ADG executes China strategic business development, corporate development, and market expansion initiatives for global technology companies. We identify opportunities, create go-to-market strategies, and execute partnerships for distribution, licensing, joint ventures, and investment across consumer and enterprise technology segments.