After restructuring of telecoms sector in 2008, the telecoms operators in China entered the stage of all-service operation. As the products via integration of the Internet and telecoms network, the netbook and home information machine come with the tide of fashion under such background.
Keep the confidence: integrated terminal will be chosen by blue ocean strategy
As compared with computer and cell phone, netbook and home information machine boast unique value orientation. Based on the blue ocean strategy, the potential market for integrated terminal may be available.
According to the strategy analysis, the netbook boasts larger screen, stronger data download and more functions as compared with cell phone; also, it has higher performance price ratio, quicker on-off and portability.
Currently, home information machines from abroad mostly adopt home wireless broadband network and touch screen, so that the access to the Internet, acquisition and application of home recreation & living-related information could be available to the aged and children. As compared with cell phone, the home information machine boasts larger screen, stronger data download capability and more functions; as compared with computer, it features easier operation, prompt application via one slight touch, continuous standby, legerity and fashion.
The development of integrated terminal values the combined effect from price, shape, function, brand, portability, quality and contents. For the blue ocean strategy, one of the options to make innovation come true is focused on the core function mostly demanded by the user and the simplification of other product properties, so as to achieve the user's greatest value in use.
Product form still remains exploring
In the long run, it is universally accepted that the integrated terminal may affect the structures of such sectors as IT, telecoms, consumption and electronics. However, setbacks are always encountered as developing integrated terminal products.
The definition of netbook seems to be more and more blurred in the layout of mainstream manufacturers: the so-called high-end netbook that enjoys edge in both performance and personality actually returns to the level of traditional notebook computer, while the low-end netbook obviously lacks clear planning.
The home information machine is still in the course of development. Thus, the operators are at a loss about the functional localization of such products. On the one hand, it is difficult for the home information machine in the Mainland China to copy the successful pattern of PCCWEye 2 in Hong Kong, because no domestic operator is actually provided with broadband operation capability like PCCW; on the other hand, to draw on the business model of VerizonHub, China Mobile may access the household voice market and transfer the mobile value added services to the integrated terminal at home. However, it does not conform to China Telecom's tentative idea: the information machine is used to enhance the diversity of broadband application and loyalty of broadband users.
At present, it is crucial to make in-depth study on the basis of user demand, so as to find out the core functions truly required by the users. Such core functions should be improved substantially. After the size of users is preliminarily expanded, the operators should know how to handle the information from both business halls and end users, so as to grasp the users' demand tendency. Thus, the clear orientation for optimizing of integrated terminal could be planned.
The integrated terminal needs four “W”
Currently, each operator lays emphasis on the market penetration of integrated terminal and fully understanding of clients' demands, so as to accurately lock up the target customers as well as optimize sales promotion and marketing channels. In the near future, the operator's marketing strategy will still focus on the following aspects:
WHO: The primary target users for integrated terminal; for the integrated terminal user chain, it is most likely that the policymaker, purchaser and user are independent from each other. So, based on the new variability, we should further make analysis to form the segment market such as family structure.
WHAT: Ascertain the core product of integrated terminal; the core product should be oriented to the top quality and fashion, so that such concepts as fashionable consumption and internet could be implanted to the propagandizing and marketing of integrated terminal. The tangible product is mainly based on the concept of integration and emphasizes the integration of portability, the Internet and communication network, while the product extension should adopt built-in setting and table top display to integrate the special business of each operator.
HOW: The diversified promotion policies could promote market development more soundly and quickly. First of all, popularize product concept in the large-scale; secondly, the advertisement should be put into the areas and communities where a lot of target users are available, and then the experience centers could be established in the business halls and agencies, so as to attract users to experience the application of integrated terminal. Finally, the appropriate price subsidy and incentive could be adopted to promote the user's purchase.
WHERE: How to effectively and quickly cover IT distribution channels in the short and medium term; netbook and home information machine are regarded as electronic digital products. So, some users prefer to buy them at the shopping mall for electronics. The distribution of integrated terminal is related to the balanced coverage from the channels of both IT and operator. Now China Unicom takes the lead in updating channels. Besides the traditional business halls, it also branches out the on-line electronics market.
Author: Chen Shuying, Research Manager, Market Research and Consulting Service, Sinotrust
