The availability of higher Internet speeds in China's 3G era will boost market demand for small Mobile Internet Devices (MID), which offer a more diverse range of functions than a typical mobile phone in a device more compact than a portable PC, Dr. Henry Chen, CEO of Cynovo Inc., told Interfax in a recent interview.
"Among the various new products emerging in the 3G era in China, MIDs show the most promise and have huge market potential," Chen said. Cynovo plans to launch its first Wi-Fi enabled 3G MID, which will support all the three Chinese telecom operators' 3G standards, by the end of the year.
"There has been a distinct trend of inter-evolution in the consumer electronics sector. In terms of personal computers and mobile phones, PCs are decreasing in size and becoming more compact, while mobile phones are increasing in size and capacity. However, amidst all this inter-evolution, there was a distinct absence of products on the market with a screen size between four and eight inches, a niche segment that the MID, which consumes much less power than a regular PC while providing standard Internet viewing quality over that of a mobile phone, was designed to fill," Chen said.
"We are currently in discussions with the three Chinese telecom operators, and plan to sign contracts with China's reputable online distributors for the distribution of our MIDs," Chen said.
According to Chen, there are distinct differences in the Chinese market compared to Western markets. He noted that young Chinese consumers between the age of 16 and 35 are fashion conscious and more willing to try new things on the Internet, while in more mature overseas markets, products like MIDs mainly target business users to help them with daily tasks.
"The Chinese market is an emerging market with a low penetration of mobile Internet usage among mobile subscribers, so the newly deployed 3G networks provide great growth opportunity," Chen said.
As such, Cynovo plans to launch three to five MIDs targeting different groups of Chinese consumers in the near future before expanding internationally. "We will have specific MIDs targeting different demographics, such as children, business users and the teen-set, whose needs differ greatly from each other. The idea is to build a vertical market with specific applications for users from financial, educational, medical and other industrial sectors," Chen said.
Cynovo will also approach corporate customers with customized value-added services. "Service integration will be important to corporate customers, who will attempt to generate revenue from the devices and their data flow. As such, our MIDs are capable of being integrated with customized functions, such as billing systems, location-based service software and online video players," Chen said.
Chen expects MID products to experience a market boom around the end of the first quarter of 2010, driven by demand in first and second-tier cities. "We plan to attract a user base of 500,000 by the end of June 2010 and 3.1 million by the end of 2010," he said. To reach this goal, Cynovo is kicking off a promotion campaign in major Chinese cities starting in September, and they have already seen customer orders coming in.
The company currently holds over 10 patents in China and is applying for at least 20 additional patents of its MID design and manufacturing technologies internationally.
"Our long-term vision for success hinges not only on our success in the Chinese market, but in expanding globally next year. As such, we plan to make an initial public offering (IPO) in an overseas stock market, most likely in the U.S. in a few years," Chen said.
Chen and his partner, Dr. Wu Wei, founded Cynovo in Silicon Valley at the end of 2007, with two other overseas Chinese engineers. A Cynovo subsidiary was established in Wuxi City, Jiangsu Province in 2008 for the design and development of its Intel x86 based Atom MIDs. The company has R & D teams of 15 and 50 in Silicon Valley and Wuxi, respectively.
Source:interfaxchina