Summary
Lenovo has developed a serious contender to the iPhone and will launch it within a month (October 2009) in China, the home market for Lenovo. This article looks at the market ramifications this will have for the iPhone.
Analysis
Lenovo has hit it out of the park with the OPhone. This doesn't seem like a poor wannabe to the iPhone, but appears to truly be a serious contender. Disclaimer is needed: Yours truly has not seen the OPhone, only read the first details, seen pictures and know a lot about the Chinese wireless carrier market.
Why do I think the OPhone will compete and take the lead in China?
1. Choice of wireless technology
Lenovo made a natural pick when they integrated a TD-SCDMA modem into the phone. This is the wireless data protocol used by the largest carrier in the country, China Mobile, with an impressive 498M subscribers.
Apple picked GSM (GPRS, Edge, HSDPA), which has the largest Worldwide footprint but, that doesn't help in China.
2. Partner
Lenovo obviously targeted the largest carrier, which would give them access to the largest user market in China.
Apple is forced to work with China Unicom with "only" 141M subscribers. Integrating a new wireless modem is actually a major undertaking and would set Apple back at least another 6 months.
3. Localization
The Chinese language presents its own challenges. Lenovo has picked Chinese as its first language for obvious reasons. For Apple, Chinese is far down the list behind English and all other languages that support the same alphabet. Although you can design of flexible localization, there are always kinks to figure out.
4. Phone design
The OPhone is strikingly similar to the iPhone but also boasts some extras. A great post on the OPhone can be found here http://gizmodo.com/5118040/lenovo-ophone-sizes-up-against-iphone-iphone-3g
What are the challenges for the OPhone?
-A proprietary operating system, largely untested.
-Lack of applications. However, this may be mitigated by great Internet connectivity and an abundance of mobile web applications. Remember, China has a large mobile Internet audience due to the lack of ground-based infrastructure. As a result, there is a lot of mobile content available.
On the World stage, Apple will continue to rule, I am sure.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
