Guest Column: MID handsets and services

Guest Column: MID handsets and services

 

By Leo Wang

In the latest Interfax guest column, Leo Wang, co-founder of Mobile2venture, shares his opinions about the development of Mobile Internet Device (MID) handsets. He argues that MID handset companies should integrate hardware, software and services, so as to better compete with other players in the market. Translated by Zhang Danwei.

Shanghai. August 14. INTERFX-CHINA - The Mobile Internet Device (MID) handset is a new type of smartphone focused on Internet and data services. The iPhone is a successful example of an MID handset, and its success proves that the era of MID handset is here.

Nokia, the world's largest handset brand, has also released several MID handsets. The company purchased Symbian in June, and Nokia now has a worldwide handset hardware brand, Nokia (hardware), which enjoys the biggest handset market share in the world; a smartphone operation system, Symbian OS (software), which also enjoys the biggest mobile system market share; and a mobile Internet portal, OVI.com (service), which was released last year.

Apple has also released a new Internet service: MobileMe, which automatically puts new e-mail, contacts and calendar events on Macs, PCs, iPhones or iPods. Apple and Nokia's strategy of entering the MID handset market rests on a hardware+software+service strategy. While products such as PC software and hardware are usually separated at first, the combination of mobile software and hardware is necessary because of the basic nature of mobile equipment.

The key point for successful mobile industry players is the advantage of dealing in both hardware and software. It's also worth remembering that the business model for the handset market is now changing from selling hardware to selling software and services.

Besides Nokia, the world famous handset provider, and Apple, the world famous PC provider - which chose the same hardware+software+service strategy and became MID handset and service providers - RIM, a company that provides Blackberry hardware, software and services, is also a positive example. A bad example is Palm. Due to the lack of a mobile Internet service, that brand has retreated from the MID handset market.

Google and Microsoft are also two companies that deserve attention. One is a forerunner of Internet services while the other is a world-famous PC system and software provider. They are both entering the mobile terminal market by using their unique weapons: Windows Mobile and Android (software).

Windows Mobile came from Microsoft's PC system, so its high price and high power consumption became its weak points despite its powerful functions. Moreover, Microsoft only has an operating system, and the hardware for a handset has to be provided by a third party.

However, even third party companies with a strong R & D capability, such as HTC, can hardly add differentiated functions from the lower system level under the Windows Mobile operation system. This weak point in hardware might explain the reason why Microsoft recently purchased a Portuguese company, MobiComp, and intents to release the Zune Phone, Microsoft's self-developed MID handset. However, this purchase might influence the income of handset producers that use Windows Mobile systems in their own handsets.

Linux is another major operating system used in the market. As its programs come from different companies and are hard to integrate though, there are few successful applications on Linux so far. Motorola's failure is an example of how Linux destroyed a company, an incident that has made Google, which also uses the Linux system, very alarmed.

As a PC service developer, Google does not understand the entire process of handset production, and cannot recognize all the major problems. Its Android platform, based on the Linux, is continuously changing its SDK [Software Development Kit: a set of development tools that allows a software engineer to create applications for a certain software package, software framework, hardware platform, computer system, video game console, operating system or similar platform], causing great trouble for handset producers intent on using the Android platform.

In turn, this has delayed the release of Android handsets. Analysts predict that Android handsets are unlikely to be seen on the market in 2008, and the future of the Android handset is not optimistic.

If the market trend is mobile Internet services, MID handsets must first focus on service quality. Service quality basically depends on the operating system, software and SDK. It's important to have a self-developed, multi-task and multi-media capable operating system with an attractive interface and good user experience. The basic hardware, including main boards, chips, keyboards and screens, are also important for a successful handset.

The invention of the iPhone shows that a successful MID handset requires a company with good integration capabilities, such as Apple. MTK, a chip and solutions provider, is this kind of company. It is good at integration and provides both chips (hardware) and solutions (software), and as a result, MTK dominates the low-end handset chip market.

Besides Apple, Nokia and RIM, do any other companies have the ability to enter the mobile Internet market? Let's see what we have in the industry now:

・ Operators like China Mobile, Vodafone and AT&T, who provide software and services;

・ Family electric appliance companies like Haier, Konka and Amoi, which also produce handset hardware;

・ Telecom equipment manufacturers like Huawei, ZTE and Cisco, which also produce handset hardware;

・ Chip and solution providers like MTK, Spreadtrum, NXP and TI, which produce hardware and basic software;

・ Handset integration solution providers like Longcheer, Simcom and Dewav, which produce hardware and application software;

・ Mobile application platform developers like Vogins, which produce software and services;

・ Mobile solution integration providers with their own operating systems and Web service portals, like Hyctron; and

・ Leading Web portal and IM service providers like Tencent.

I prefer the Hyctron+Vogins model, if taking R & D ability and strategy into consideration.

Hyos, Hyctron's self-developed smartphone operating system, has the advantage of low power consumption, multi-media and multi-tasking. As opposed to independent design houses (IDH) like Longcheer, Simcom and Dewav, although Hyctron uses chips from TI and MTK, it has an independent operating system for handset R & D and integration, and has total control over its handset hardware.

Hyctron has also opened a mobile Internet portal. Together with Vogins' application software, Hyctron can provide very convenient SDK and applications for third parties (handset makers), and share revenue with its partners by using its platform. In this way, Hyctron is able to enjoy the second highest position in the mobile service industry, next only to telecom operators.

I think Hyctron is so far the only company that has shown the ability to create a "Chinese iPhone". However, its sales, marketing and brand influence still need to be expanded. The Internet era is an era full of miracles. As long as the company follows the right direction, it is sure to be successful.

The above is an exclusive English translation of a posting on Leo Wang's Chinese-language blog, betashow.blogbus.com. It is a personal opinion piece by the author, and its publication in no way implies that Interfax shares the views expressed.

About the author: Leo Wang is the co-founder of Mobile2venture, a mobile Internet company incubator. He graduated from Xi'an Institute of Post & Telecommunications in 2001, and has worked for Huawei Technologies Co. Ltd., Shanghai Lantop Information Technologies Co. Ltd., Chipnuts Technology Inc. and Wealink.com. Leo Wang is now a consultant for several new companies, such as Vogins Technology (Shanghai) Co. Ltd., Shangmail.com and City600.com.