China holds great opportunities for MID handset developers willing to create and market their own technologies, says Heart Yang, the CEO of Hyctron
Most companies buy the OS, but we did it ourselves. That's the biggest difference between us and the rest.
Heart Yang, the CEO of Hyctron
Shanghai. August 15. INTERFAX-CHINA - Not long after a number of international giants launched mobile internet device (MID) handsets, China may see its own domestically produced MID handset, with Hyctron Electronics Ltd. and planning to release its own GSM+Wi-Fi and CDMA+WiFi MID handsets based on its own operating system (OS).
"The Chinese market is full of opportunities," said Heart Yang, CEO of Hyctron. "Although the MID handset industry environment in foreign countries is better than that in China, China can provide more [sales] opportunities than any other country. Such opportunities mean a big potential user base. For consumer electronics, user base is the best advantage."
Yang, a graduate of East China Normal University's Department of Microelectronics and former Creative and Philips CE employee, said he has planned on getting involved in MID handset development for a long time.
"Although I intended to develop a MID handset earlier, the development level of CPUs (central processing units), screens and hard disks were all too low," Yang said. "We had to start our business with MP3 and MP4 players, because we wanted to gain some experience in multimedia application services first."
Yang said he knew that with the upcoming 3G, 4G and Wi-Fi eras, multimedia applications would become major handset function. As basic voice services in China will be free or nearly free in the future, domestic operators may become like foreign operators, that is, depend on value-added services for revenue.
Hyctron has produced demonstration MID handsets for Chinese telecom operators that utilize its self-developed OS, called Hyos. Wi-Fi has been a key feature of such demo handsets, Yang said.
"Wi-Fi is a hot topic in China now. However, it too late for new companies to enter the market, as [the market] is already hot," he said, adding that his company has been involved in Wi-Fi for many years.
Handset hardware is different from PC hardware, Yang said. Compared to the PC industry's high level of standardization, differentiation in design, hardware and software make up a part of a handset company's competitiveness. As a result, cross-system compatible is limited.
However, many Chinese companies use the handset platform developed by Taiwanese company MediaTek, which covers hardware, OS and application software. As a result, such companies do not control the core technologies they are utilizing, and can rarely market their own individual services.
"There are few companies like us in China that make handsets from the ground up. Handset production can be divided into hardware production and software production. The software part also can be divided into two parts: OS, and application software that is put on the OS," Yang said.
"Most companies buy the OS, but we did it ourselves. That's the biggest difference between us and the rest. Since the OS is our own, we can add many unique services on the OS very quickly for our clients."
Yang said the company has used this business model, focused on self-developed software and hardware, for some time, going back to when it made MP3 players. "At that time, many MP3 companies didn't develop their own chips and OS. Although they could make products quickly, they couldn't produce better products than other companies. But we did, because of our own OS."
Companies that make quick money may make quick losses too, since they make very low profit, Yang said, explaining that Hyctron decided to develop unique technologies so as to ensure long and stable development.
"Doing our own OS has meant many difficulties, and in China there are few other companies that have the same business model," Yang said.
The company is now focusing on its upcoming GSM+Wi-Fi and CDMA+WiFi MID handsets, Yang said.
"We started the MID handset business in 2007, and you will see our handsets on the market in one or two months," Yang said. "We have cooperated with China Telecom for about two years, and we have some contacts with other Wi-Fi operators. They think our products are good."
The company hopes to become the biggest MID handset supplier in China in five to six years. Yang said future handsets will be linked more closely to the Internet, instead of just making calls and sending messages. E-mails and the Internet will be the new basic functions of future handsets, he said.
"Our strategy for new handsets is [to release them at a] high price first, and then lower prices. At the beginning [of selling a type of handset] there will not be a big competitor [present]. And, after our great investment in development, of course we will charge a high price," Yang said. "When there are other companies [competing], we will slash our price."
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