Last month, Xconomy reported on a visit to China by five Seattle-area tech companies as part of a mobile-telecom mission organized by the Washington Technology Industry Association (WTIA). The goal of the trip was to open up business opportunities for the companies by setting up meetings with potential partners, investors, and customers. On Friday, I sat down for a one-on-one with Ken Myer, the president and CEO of the WTIA (and an Xconomist), to talk about the trip and what he learned about the Chinese mobile market.
Myer led the delegation, together with the Washington State Community, Trade and Economic Development office, and representatives from the local tech companies Formotus, McObject, Mobile Semiconductor, RealNetworks, and Zoodango. The trip included stops in Beijing, Shanghai, and Shenzhen, extensive meetings with dozens of companies and local government officials, and an excursion to the Great Wall—Myer’s first trip there, though he’s been to China several times.
Their experience struck me as useful stuff for anyone thinking globally about the impact of their company or organization, particularly in the mobile sector. So, here are Myer’s top five take-aways after observing the China mobile market up close:
1. It’s even bigger than you think. With more than 700 million handsets out there (100 million were sold in the first half of this year alone), the Chinese market size is truly impressive. “Embedded software around improving performance or cost of a device is an early adopter opportunity,” Myer says.
2. Mobile behaviors of consumers are very different compared with the U.S. Hardly anyone leaves a voice message, there’s lots of texting, and much less use of data applications—the mobile market is something like 90 percent voice and 10 percent data (versus 69 percent voice and 31 percent data in the U.S.), according to Myer.
3. Think regionally. Domestic growth is key to the Chinese mobile industry. And a lot of that growth is in rural areas, where there are cheap “mountain plans” for wireless service. “There’s no single application for all of the country,” says Myer. “Pick a province, and focus on one arm of a carrier that’s amenable to working with you.”
4. Mobile business applications are in early days. “It’s a good time to get in,” says Myer, though there are long sales cycles and adoption times at this point. And mobile gaming is even further behind.
5. As for intellectual property, go in with your eyes wide open. Keep in mind Web services are probably easier to protect than a technology that involves a disk or file that can be copied.
Myer also stressed the importance of building personal and business relationships. Each day on the trip was filled with formal business meetings, followed by a lavish banquet. (Myer cited steamed fish, seafood, and duck as his favorite dishes.) “Meals are really where the relationship is established. You talk to people one-on-one, and you cement the personal relationship…It’s important to think of these efforts as long-term,” he says. At the same time, “we want to get business and revenues flowing for our members.” To that end, Myer says he plans to return to China early next year, in part to visit more companies and formalize a trade cooperation agreement with Chinese officials.
Lastly, Myer had an unrelated (and much more Washington-centric) public service announcement: Get your applications in this week for the annual Industry Achievement Awards, which will be given out at the WTIA’s 25th anniversary bash on the evening of March 25, 2009, at the Paramount Theater in downtown Seattle. The deadline for all entries is this Friday, November 21. The award categories include technology innovator of the year, consumer product or service of the year, and a new one, breakthrough startup of the year.
