With the decreasing room for expansion in the wireless market confronting it, China Mobile is now planning to enter the data service business. While this may be viable move for the telecom giant, this may also be a threat to the dominance of Baidu in the data service market. Wang Jianzhou, China Mobile’s chairman said that their options for growth have been limited due to the high penetration rate that they have achieved in China. The wise move would therefore be to diversify and to introduce its own data service. The country’s data service market was once a sector that is dominated by Baidu. However, if China Mobile proceeds with its plan, it is definite that a good part of Baidu’s base will be taken away.
China Mobile will not be alone in this shift of focus though. As the mobile phone sector in China becomes acute, other carriers based in other countries have also applied this shift in order to retain profit margins despite the saturation of their respective markets. Wireless communication companies in Europe, Japan, and U.S. have included attractive data service offers in order to encourage mobile internet device owners to buy their apps. Since they have already sold so much hardware for those interested in mobile communication and internet, they themselves are responsible for the saturation. However, they have a solution and this to sell software this time.
China Mobile was once considered as one of the fastest growing wireless communications carriers in the world. However, even if it does meet expectations of being able to achieve a 7 percent revenue growth this year, it is now experiencing its slowest in years. According to analysts, the slowdown can be attributed to the growing number of Chinese who owns a mobile phone. However, with the introduction of new apps and better data services, more people may just decide in changing their units with those more advanced ones that are capable of mobile internet access and other functions. This is clearly the reason why China Mobile is entertaining ideas on this aspect.
If the plans will push through, the search engine to be developed by China Mobile will surely be a serious threat to Baidu. This is because the China Mobile already has control on the largest part of the wireless communications services. Making its search engine as the default of the phones that it sells would be very easy for China Mobile. However, officials of the telecom firm have said that they will not make their search engine an exclusive feature of their phones. They will still allow users to install Baidu as their phones search engine. The plan is still on the drawing board though and only when implementation begins can the actual effects be seen.
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