KyrosL, <<How can that be possible?>>
<<Copying the local groups' business models, Motorola and Nokia have introduced low-end models this year and strengthened their distribution in less affluent smaller cities and towns that are home to the majority of China's 1.3 billion people.>>
and ...
"We're going to see consolidation among existing players in the market," he said. "We're going to see increasingly concentrated market power in terms of the top manufacturers."
... but, notice that the average price and therefore margin/profit of the industry has been driven down, way down, and the exited players will move on to whatever, defaulting on whatever, until the next industry's margin is also driven down, down and more down.
The Mega's and Major's are by no means safe, only able to defend a temporary capture, like the war in the desert, until the restructured locals onslaught again, led by the lead surviving Local Mega/Major whichever it turns out to be, as described in my blog.
In the meantime, the int'l Mega/majors are obligated to engage even more in China, in R&D and in sourcing, marketing, and global consolidation happens, else motionless duck in the desert.
And the first China local Mega/Major making it overseas on own / purchased brand/service network will open the new chapter of a deadly struggle for survival. Now we see why IBM PC was important to Lenovo. It wasn't about PE ratio, but about a try at survival.
Any one deal may fail, but the onslaught continues.
Victory is temporary, consolidation not an event, but a process, Last Man Standing Deathmatch, Unreal Tournament style, and another 1,000 odd employees gets off-ed somewhere, in China and elsewhere, except the ones in China gets a better chance of getting hired, by someone or other.
The game is not about any single industry, but about economies, and societies.
These observations hold:
worldmarket.blogspot.com
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Chugs, J |
