China, India propping up mobile manufacturers
(Xinhua)Updated: 2007-03-02 11:22
China and India are turning out to be major forces in rescuing handset manufacturers from the margin pressures they face elsewhere, according a survey released here Thursday.
The Wolff Olins/Goldman Sachs joint survey into the mobile phone market suggests that the Chinese and Indian mobile handset markets are coming of age and with rising incomes, strong purchase intentions, high levels of interest in technology and admiration for handset brands.
The survey reveals that Chinese and Indian consumers are very brand-aware, and says that the global brands that develop strong emotional bonds will win and preserve margins.
The online survey which sampled 8,800 respondents from the U.S., UK, China and India shows that in China and India 80 percent of respondents (compared to 55 percent in the UK and 48 percent in the U.S.) are planning to replace their handsets within a year and at least 40 percent of those customers are intending to spend more than they have previously on a handset.
Tim Boddy from Goldman Sachs said, "A surge in demand for more expensive phones will transform China and India. These markets, in spite of lower prices, offer more attractive growth and margin prospects for handset manufacturers than those developed markets."
Charlie Stott from Wolff Olins warned that "the strong margin prospects in these markets may only be a temporary phenomenon. As markets mature, and handsets and mobility cease to be new and exciting, price pressure will intensify."
The research shows that the long term strategy for success has to be about driving choice and loyalty by building lasting emotional bonds and creating differentiation in consumers' minds.
Based on respondents' purchase intentions, the survey predicts that among the brands surveyed, Nokia is set to gain a significant market share in China and Sony Ericsson in India.
Wolff Olins is a consultancy that helps organizations create or reinvent their brands to generate new growth. Founded in 1965, it serves Fortune 500 companies, ambitious enterprises and visionary individuals and is responsible for creating a number of the world's breakthrough brands.
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