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To: Eric L who wrote (2970)	4/22/2003 10:21:11 AM
From: Eric L	Read Replies (3) \| Respond to of 9255

MMS in China >> Assessment of MMS ChinaNex 04/2003 chinanex.com Question: The multimedia messaging service seems very popular in China and throughout Asia. What is your assessment? In your opinion, what are the factors that will affect the future of MMS? Can the market sustain long-term growth? Thank you. ChinaNex: At first glance, multimedia messaging service should have little difficulty capturing the Chinese public who sent about 90 billion short messages (SMS) in 2002 (15.8 billion in 2000, 40 billion in 2001). Studies suggest messaging is an effective extension for the Chinese to express what otherwise would not be possible (or appropriate) thanks to a rich language. To China Mobile and Unicom, it is logical to presume MMS should carry on the momentum of SMS and lay the foundation for 3G. The technical advantage of MMS is quite clear. It uses SMTP to transmit messages, similar to e-mail service and handsets use WAP-like protocol to "poll" messages from MMS center. Perhaps the most important difference is MMS is designed with 3G infrastructure in mind which delivers much higher bandwidth for data service. For example, a typical MMS message has 30KBs (up to 100KBs) and future service can support even streaming media such as stereo audio and video. But such design also creates certain limitations. For example, operators must deploy new hardware and software to process and transmit MMS, typically MMC (multimedia messaging center) and a control mechanism to coordinate MMCs in a regional or national network. In addition, the service requires strong bandwidth support, which even GPRS can hardly handle. (Typical speed for GPRS is about 40Kbps, but the minimum requirement for "true" MMS is 384Kbps.) Perhaps more critical to the success of MMS is it requires a totally different handset that can compose and receive MMS, and display rich-content messages. It appears the issue for growth of MMS is not technology (of course it needs improvement), but service. In addition, for cellphone users to adopt MMS, two other conditions must be present. First, handset supply must be abundant at a reasonable price. At present, most GPRS handsets are very expensive (typically 4,000 yuan or $480), but a desirable price level should be around 2,000 yuan ($240), which is considered acceptable by Chinese standard. Perhaps the biggest barrier is service charge. It costs .9 yuan (11 cents) to send a message, which is higher than what the public is willing to pay. According to a survey, most Chinese would accept the range of .5-.6 yuan (6-7 cents) a message, which is about five times of SMS. China Mobile and Unicom will lower MMS charges with seasonal discounts or permanently. It is difficult to identify the essential trigger for MMS growth, if there is one. Is it cheaper handset or better content? Or is it lower service charge? Or is it that people who use SMS have become blasé about the service which makes them less interested in experiment with the enhanced version? My analysis is price may play a role in the picture, but it is by no means a major one. Chinese are known to throw money for something very expensive but deemed valuable. For example, very few Westerners would spend hundreds of dollars for a handset, but most Chinese do it happily. For the same reason, although .9 yuan for sending a message sounds much higher than SMS, it only costs 18 yuan ($2.2) for 20 messages a month. What can 18 yuan do in China? Not even a can of soda in an upscale restaurant. It seems clear that the value system (perceived but not necessarily true) that most Chinese adhere to is a major criteria for decision making. Though difficult to change, it can be "fooled" or manipulated into believing that the cost of using MMS is worthy the money. << - Eric -

To: Eric L who wrote (2970)	4/23/2003 10:17:21 AM
From: Eric L	Respond to of 9255

China Handset Forecasts for Top 5 Sino-Foreign Manufacturers >> China To Produce 170 Million Handsets This Year Original date: 2003/4/23 Translator: Chinmei Sung DigiTimes (Taiwan) Handset production in China will reach 170 million units this year, up 34% from about 126.8 million last year, reported The Japan Industrial Journal, citing estimates by Fuji-Keizai, a Japan-based research firm. China’s Ministry of Information Industry (MII) estimated that 131.55 million mobile phones were produced in China last year. China 2003 Handset Production Forecast MII estimate Company 2003 Y/Y for 2002 Motorola 50m 38.8% 31.36m Nokia 38m 16.5% 36.64m Siemens 15m 30.4% 13.10m Samsung 10m - - Source: Fuji-Keizai, compiled by DigiTimes, April 2003 - IC -