BUSINESSWEEK ONLINE : MAY 22, 2000 ISSUE
INTERNATIONAL -- COVER STORY China Surfing (int'l edition) The world's biggest market is ready for takeoff Inside Motorola Inc., the device was code-named Dragon Ball--a secret weapon to crack open China's wireless Internet market. Renamed Accompli and now on sale in Beijing and Shanghai, the product is a nifty combination of mobile phone, handheld computer, and wireless Internet device. To tailor it to local tastes and win over China's protectionist officials, Motorola developed the $600 handset and sourced everything from chipsets to software in China. Accompli was designed around the wireless application protocol (WAP) software standard. Although China had no WAP service until a few months ago, industry executives expect demand to soar. ''Amazingly, China is ahead of other markets in introducing WAP,'' says K.Y. Chan, Motorola's Beijing-based vice-president and global telecom solutions group director. ''In other [Asian] countries, many operators are still just in testing.'' China's wireless market is certainly attractive to multinationals. The country had 43 million cellular users last year, according to International Data Corp., and an additional 20 million may subscribe in 2000. ''China probably represents the largest wireless market worldwide,'' says Lucent Technologies Inc.'s Asia Vice-President Scott Erickson. He notes that China has the same number of subscribers as Japan--but that mobile-phone penetration rates are just 1%, compared with 50% in Japan. NETWARD HO. To usher its people into the wireless Internet vanguard, Beijing is pushing its state-owned telecoms to accelerate the push into WAP. China Mobile Communication and China Unicom, the two main mobile-phone operators, have recently launched wireless Net service in major cities. The government isn't stopping there. WAP is part of a broader development plan to help Chinese living in poor provinces that lack good fixed-line telecom service get onto the Net. Motorola is intimately familiar with all these nuances. China last year accounted for 10% of the company's overall revenues of $31 billion. It also controls nearly one-third of China's wireless phone market, according to IDC, despite withering competition. To retain its position, Motorola is pushing powerful new GPRS (general packet radio system) equipment that turns rudimentary digital networks into high-speed WAP highways. Its executives also have been signing up partners, including China's state-run cellular giants and 20 entrepreneurial dot-coms. CALLS WAITING. One piece of Motorola's Net strategy is its investment in San Francisco-based MeetChina.com. MeetChina is a business-to-business exchange backed by China's powerful Information Industry Ministry (MII) and other agencies. Motorola says the investment is small. While the two partners are planning to develop MeetChina content especially for WAP, they also have launched a relatively primitive paging service for computer-less Chinese companies that aren't yet online. ''This allows us to do messaging direct to the factory without having to use the Internet,'' says MeetChina CEO Leonard Cordiner. Of course, Motorola won't have China's wireless Web to itself. Nokia plans to invest $600 million in a high-tech facility devoted to mobile telephony. It also has preliminary agreements to provide WAP applications and infrastructure to China Unicom. Ericsson has similar deals. Still, it may be a while before WAP takes off. While the service costs half as much as calling from a regular system, the network is slow--and services are limited. After checking out several WAP phones at Shanghai's Carrefour hypermarket, Yu Lijun, who works at a local telecom equipment joint venture, says he decided to wait because the service isn't yet worth the cost. But as operators install Motorola's GPRS equipment, network speed should quadruple. And some analysts predict prices of wireless handsets will keep dropping 10% to 15% annually. By yearend, 10% of the cell phones in China will use WAP, and users will be going online ''without even knowing they are using the Internet,'' predicts Chan. Inside China and outside, Motorola and its many rivals are counting on that. By Bruce Einhorn in Hong Kong, with Alysha Webb in Shanghai _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Wireless in Cyberspace (int'l edition) INT'L COVER IMAGE: Wireless in Cyberspace TABLE: The Clash of the Wireless Titans Begins CHART: Across the Globe, Demand for Digital Cell Phones Is Soaring Japan's Cutting Edge (int'l edition) CHART: Japanese Internet, Cellular, and Wireless Net Users Goliath vs. Goliath (int'l edition) CHART: Western European Internet, Cellular, and Wireless Net Users Sprint's a Web Evangelist (int'l edition) CHART: Total Internet, Cellular, and Wireless Net Users in North America China Surfing (int'l edition) CHART: Asia-Pacific Internet, Cellular, and Wireless Net Users Commentary: Yes, It Really Is the Next Big Thing (int'l edition) ONLINE ORIGINAL: IBM's Mark Bregman: "The Immediacy of Data" Will Change How We Work ONLINE ORIGINAL: Let a Million WAP Users Bloom ONLINE ORIGINAL: Matsushita's Takashi Kawada: "All We Have Is a Little Time Advantage" BW E.BIZ: "Martin Cooper: A Wireless Prophet Who's Pushing 'Smart Antennas'" INTERACT E-Mail to Business Week Online

Copyright 2000-2009, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use   Privacy Notice