May 16, 2002 saw Microsoft (China) Co., Ltd. contracted a memorandum of cooperation with TCL Mobile Co., Ltd. in Beijing for developing the next generation of OMIT product on the basis of PocketPC 2002 Phone Edition and Smart phone 2002.

The signing of the memorandum for cooperation by Microsoft with TCL Mobile is the first cooperation officially announced by Microsoft for the mobile phone market in China.

Dr. Wan Mingjian, managing director of the TCL Mobile Co., Ltd. expressed openly by saying, "The mobile phone with phonetic function only, we think, cannot avoid the doom of the pager in the mobile communication end-product in future. The development of the OMIT product is the trend in the days to come."

As TCL holds, what the OMIT most need of is the matured software technology which can assuredly be met with the cooperation from Microsoft. It is hoped that TCL will pioneer a way forward in the production of mobile phones through the cooperation.

For Microsoft, what counts for it is that TCL knows the ropes of the Chinese market and its customers and secondly, TCL is also specialized in PC, household electric appliance, IT product and in communication field as well. And TCL also deems it that the superiority of TCL in the field of manufacturing and marketing is the key reason for the two "Aces" to join hands.

According to the introduction of Du Xiaopeng, vice president of TCL, the mobile phone products reaped a profit of RMB 300 million yuan (US$36 million) last year and the sales value has already overtaken RMB 3 billion yuan (US$362.33 million) in the first four months of this year.

Microsoft marches into mobile phone market

In view of the analysis by Microsoft on the mobile phone market, the world communication industry is now shifting from the fixed phone over to the mobile communication. The mobile phone as a rising industry is pumping a great vital force into the global economy.

In the face of the very big market potential, Microsoft began to set the ball rolling with its own strategy and tactics.

By the end of 2000, Microsoft already brought into the market its product PocketPC and the beginning of 2002 with its mobile software platform. For Microsoft, a software giant as such knows quite well that the mobile software platform is its starting line for marching into the mobile phone market.

To follow up, Microsoft hopes that more mobile phone producers will use its software platform. As to his rival the British Symbian, surely, Microsoft is not dare to take light of it, for after all almost all the big mobile phone-set producers in the world are its clients including Nokia, Motorola, Sony-Ericsson and Siemens.

Microsoft has been looking around for partners in the world which are able to put its idea into practice and we've found that Samsung, British Sendo and NAFCO and Compal in Taiwan all have established cooperative partnership with the Microsoft in connection with its mobile software platform. Microsoft has talked over with several domestic mobile phone producers, hoping that it can find out a satisfactory partner in China. So the cooperation of Microsoft with TCL suggests an important step to take before it marches into the Chinese mobile phone market.

Microsoft is in action

As data indicate, it has witnessed a quick increase in the domestic mobile phone market in China. The year of 2001 saw the mobile phone business come to some 42.8 percent of the total communication businesses with the mobile phone users accounting for 44.13 percent of all users. The mobile phone users reached 145 million, an increase of 71.3 percent as against that in 2000, standing out a No.1 mobile phone using country in the world. According to the market forecast, the mobile phone users in China will reach 251 million by the year of 2005, showing a big market potential.

Facing such a big market as with 160 million mobile phone users Microsoft cannot sit there idly taking no notice of it.

Microsoft has it that the OMIT of TCL as based on the mobile software platform should be the product at middle or high level in the Chinese market. And according to its judgement of the market, the middle-and-high-level mobile phone users come to some 35 percent and this poses a very good market vista in future.

(People's Daily May 27, 2002)