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The Emergence of
China’s Mobile Technology
Sector
Nathaniel R. Hathorn
College of Liberal Arts
Political Science
Graduating Class of September, 2013
Mobile Industry Overview
• China has recently overtaken the
U.S. as the largest mobile device
market in the world.
• China has 930 million mobile
users as of 2012, up from 205
million in 2002.
• 99.7% of subscriptions
carried by three major
providers
• Chinese mobile manufacturers
such as Huawei, Lenovo, ZTE,
and TCL Corporation have
emerged as major competitors in
the international market.
• 10.5% of global market share
in 2012
Sources: Flurry Analytics, tech.163.com, Gartner Analytics
Growth of Major Mobile Manufacturers, 2002-2012
40
35
Revenue (billions of USD)
30
25
20
15
10
5
0
Huawei
Lenovo
2002 Revenue (billion USD)
ZTE
TCL Corp
2012 Revenue
Huawei: 1319%
ZTE: 1045%
Lenovo: 1009%
TCL Corp: 290%
Sources: Annual Reports, International Monetary Fund
Growth of Major Mobile Providers, 2002-2012
Revenue (billions of RMB)
600
500
400
300
200
100
0
China Mobile
China Unicom
2002 Revenue (billion RMB)
China Telecom
2012 Revenue
Chinese Mobile Subscribers, 2002-2012
2002: 205 million
0
100
200
300
400
2012: 930 million
500
2002 (millions)
Sources: Annual Reports, tech.163.com
600
2012
700
800
900
1000
Summary of Findings
• Revenue from China’s four
major mobile device
manufacturers and three
major mobile service
providers has grown from a
total of USD $40.13 billion
in 2002 to USD $266.55
billion in 2012.
• Over the last decade, these
companies have grown
664%.
Sources: Annual Reports
Causal Factors
• Deng Xiaoping’s “Reform
and Opening Up” policy
heralds modernization of
China
• “Four Modernizations”
encourage development
through improvements to
industry, science, technology,
etc.
• Reduction of tariffs and
establishment of SEZs spurs
economic experimentation
and development
• Since the year 1980, China’s
real GDP has grown at an
average annual rate of 9.9%.
Sources: International Monetary Fund
China: Growth in the Last Decade
Real Chinese GDP per Capita (PPP per capita)
10000
9000
8000
Real GDP per Capita
7000
6000
5000
4000
3000
2000
1000
0
Sources: International Monetary Fund
Foreign Direct Investment in China (billions of U.S. dollars)
200
180
160
FDI (billions of USD)
140
120
100
80
60
40
20
0
Year
Sources: International Monetary Fund
Exports of Goods and Services (billions of U.S. dollars)
2000
1800
1600
Exports (billions of USD)
1400
1200
1000
800
600
400
200
0
Year
Sources: International Monetary Fund
Conclusion
• As a result of rampant economic
growth, surging capital inflows,
and rising per capita incomes,
the Chinese mobile technology
sector, as represented by the
aforementioned major firms, has
risen from 2.76% of overall
GDP in 2002 to 3.24% in 2012.
• Although seemingly a small
increase, given rampant growth
of overall Chinese economy
during this interval, it is
significant that the mobile sector
has still outpaced aggregate
growth by such a margin.