Comments (Total 3 comments)

• TMTEditor
  Fri 03 Apr 2009 14:01
  

  Dr. Cheng Dejie

  The following is a response from Dr Cheng, translated by Zhang Danwei:

  I’d like to thank Mr. Dan Butterfield for reading my article and making very in-depth analysis on the topics including the cooperation between Apple and China Unicom, the control over WVAS, the reason why Apple and Nokia don’t cooperate with China Mobile, and the prospect of China Mobile and Apple’s cooperation in 2G or 4G era.

  Mr. Butterfield’s analysis is instructive, but he and I have different standpoints:

  I analyzed the cooperation from operators’ point of view while Mr. Dan Butterfield from users’ and Apple’s point of view.

  Operators can attract some users by introducing iPhone, but for the long run, if operators cannot control the WVAS industry, what they do is just helping these content providers open the market and giving up their own capability to make profit from WVAS. That’s what happening between Apple and the operator that will cooperate with it.

  As the weakest operator, China Unicom’s capability of developing new mobile services and controlling WVAS industry is much less than China Mobile. In order to have a 3G user base expansion in a short time, China Unicom plans to introduce Apple to China. It’s just like drinking poison to quench the thirst. That’s why I’m not optimistic about the prospect of the cooperation.

  The introduction of iPhone will of course be a great joy to the handset users, and stimulate the development of local handset industry. These are good for the users. With Apple’s more and more sound position in China’s WVAS industry, China’s telecom operators, who used to totally control the service profit, will see the risk that their profit will be taken away. App Store’s success in China will spur the WVAS industry in China. More and more “App Stores” will appear. These are all good things. Apple is playing a role of WVAS industry advocator and forerunner.

  As for Mr. Butterbield’s analysis on the reason why Apple and Nokia turned China Mobile down, I think it’s just to the point.

  China Mobile is now paying for its negligence to TD-SCDMA in the past. Just like what Mr. Butterfield said, world-leading handset makers like Apple and Nokia will not pay the bill for the bad quality TD-SCDMA network built by China Mobile. China Mobile’s TD-LTE plan also doesn’t appeal to Apple and Nokia at all.

  As a state-owned company, China Mobile has the responsibility to the government’s TD-SCDMA project. However, China Mobile again and again ignored the government’s determination on TD-SCDMA, and paid little attention on this standard in the past.

  Now the global economic downturn makes the future commercialization of TD-LTE unforeseeable. China Mobile’s hesitation and delay on TD-SCDMA in the past wasted its own time to do the network deployment and terminal development. China Mobile doesn’t have the right to choose its favorite 3G standard, while its competitors, China Telecom and China Unicom, are now challenging its leading position by more mature 3G standards and more versatile terminal models.

  So we can say, although China Mobile is the biggest mobile telecom company in the world by user base, it’s not the smartest one!

• TMTEditor
  Mon 23 Mar 2009 11:41

  Editor’s note: I think it only fair to point out that the headline for Dr Cheng’s article was written by a sub-editor rather than the author himself (more license being taken with the translation in this area). However, this does not affect the article itself, nor the argument of Dan’s post.

  Dr Cheng has been made aware of your detailed response, Dan, and has told us he will look to reply in the next few days.