China's Mobile Internet Messaging (IM) War, part 11: the battle is heating up

This is part 11 in this series. One can find the previous part (part 10) in this series here:

part 10 here

I am still keeping track of the weekly download statistics. The pattern I observed in part 10 is still valid. That is Netease/CHA (China Telecom)'s YiChat is still growing like crazy. Alibaba's LaiWang is a very strong grower. Sina's WeMeet is dying in front of our eyes.

In addition, there are two other new players that are getting into this space. One is from Shanda and another from a big retailer. But so far those two new players are not catching any traction at all.

Both Alibaba's LaiWang and Netease's YiChat had/will have major announcement. But first, some users statistics:

From the following article:

YiChat's super fast growth (in Chinese)

Netease's YiChat had already accumulated more than 30 million users. In addition, its user base are increased by 200k per day. Of all users accounts, 28% of them are daily Active account users. Thus, about 30*0.28 = 8.4 million users are using YiChat every day.

Considering YiChat starts operation on 8/19/2013, it is able to accomplish this feat in less than 2.5 months. I had never heard of any social networking product that are able to grow this fast out of the starting gate, anywhere.

But Alibaba is going all out for its LaiWang product. From the following article:

Alibaba is going all in (in Chinese)

Alibaba is offering all LaiWang users of free mobile data traffic cost for users in 4 major provinces. This trial will last 2 months for now. Alibaba would also likely to expand this free service.

Not to be outdone, Netease had just announced that it will have a major announcement on 11/8/2013. From the following articles:

Netease's major announcement (in Chinese)

(in Chinese)

(in Chinese)

The detail is still a little unclear. But it looks like CHA/Netease will expand the free data service offer for its YiChat users not just to all CHA users, but all users in China. It will also covers users from China Unicom (CHU) and China Mobile (CHL) users.

Of course, the cost of these free service is so large that is so far beyond what Netease can afford. Most likely, Netease is just alone for a free ride. Either the cost will come from CHA (China Telecom) or China Unicom and China Mobile will become partners of YiChat. We will find out more details on 11/8/2013.

end

China's Mobile Internet Messaging (IM) War, part 9: YiChat gets VOIP

One can find part 8 of China's Mobile IM war here:

Part 8 here

Yesterday, YiChat provided a major update and upgrade from version 1.1.2 to v.1.2. Please see the following articles for details:

Article 1 (in Chinese)

Article 2 (in Chinese)

Article 3 (in Chinese)

Article 4 (in Chinese)

Two major functions are added to YiChat. First, YiChat will start Voice Over IP (VOIP) service. In addition, calls from foreign country to China will be free (there could be a time limit however). Since YiChat has a sugar daddy in China Telecom, it will be China Telecom that will supply all the cost for this free service.

The second major function is that when a user uses YiChat and when the other party doesn't have access to internet, YiChat can convert the message to either SMS (if the message is text) or telephone messages (if the message is voice).

None of these two functions will grow the users by a lot in the short term. But both are very significant.

It is nice to have a sugar daddy, especially a sugar daddy who is a monopoly. Skyp had been trying to get into China for a long time now. In addition, all of China's private companies had known that VOIP is an incredibly lucrative business to get into.

But Chinese government won't allow any private, be it foreign or domestic, to get into this area because of the objection of its three state owned telecom operators, China Mobile (CHL), China Unicom (CHU), and China Telecom (CHA).

But now, Netease is able to get into this area through its cooperation with China Telecom. This is potentially a lot bigger than China's Mobile IM. If China truly allows VOIP, it could completely overtake all of China's telecommunication industry, considering the horrible reputation of the three state own companies among ordinary Chinese.

At this point, VOIP is not fully allowed yet. But China is allowing a crack, and only for the telecoms and Netease.

I am certain at this point, companies like Tencent, Alibaba, Sina, Sohu, are drooling with envy with Netease's great luck.

The second major feature is very important in YiChat's competition with Tencent's WeChat. Almost all of the analysis in China are on whether YiChat can replace WeChat. Well, I think the possibility of that is zero. If somebody comes up with a product that basically does what Facebook does. Even if that product is superior to that of Facebook. The possibility of that product to replace Facebook is basically zero.

I guess YiChat could be to WeChat for what Google+ is to Facebook. It could become a 2nd place player in China's Mobile Internet Messaging market. But I think YiChat can be much more than that.

Here in the US, we have Facebook, Twitter, LinkedIn, Tumblr, Instagram, Foursquare, Pinterest, etc. Any one person can have more than one social circle. Similarly in China, the top 3 are QQ, Weibo, and WeChat. But there is definitely more room for more.

But there are a basic limitation for the top 3 social media products. They are limited by that both side have to have internet access at the same time. This is where there is a niche for YiChat to thrive.

Because YiChat has the support of China Telecom, it provides its users free access to home phone and SMS (Short Messaging Service). Its true advantage that nobody else have is it allows its users  free access to 3 networks (internet, home phone, and SMS). This second feature is the start of Netease's attempt to start to integrate the three networks together. If China truly allows Netease to have full VOIP service, YiChat can combine that and we will have four networks integrated into one.

end.

China to launch trial of 3G mobile phones

China Mobile (CHL) is going to start the TD-SCDMA commercial trial on 4/1/2008. The following is the news in English and in Chinese.

http://www.usatoday.com/tech/wireless/phones/2008-03-28-china-3g_N.htm?csp=34

http://tech.sina.com.cn/t/2008-03-28/11182106926.shtml

My last post on WVAS is here:

http://chinese-net-gaming-stock.blogspot.com/2007/04/rumored-china-mobiles-chl-wap-policy.html

The Chinese news from sina has a lot more information in them.

TD-SCDMA is a 3G cellular phone standard. The world only have three 3G standards, the WCDMA, the CDMA2000 and TD-SCDMA. WCDMA is the standard developed by Europe (its 2G equivalent is GSM). CDMA2000 is developed by American (its 2G equivalent is CDMA95). TD-SCDMA is developed by China.

It was a tremendous technical break through for China.

Chinese mobile operators don’t like TD-SCDMA. They have good reasons. A cellular phone standard is so complicated, it will be impossible for TD-SCDMA to be even close to the two existing standards in terms of performance and robustness.

Even if Albert Einstein and Thomas Edison are the one invented TD-SCDMA, it will be at least 10 years behind both the WCDMA and CDMA2000.

The only way TD-SCDMA can survive is for the Chinese government to dictate China’s mobile operator to use it.

But to conform to WTO charter, China has to give WCDMA and CDMA2000 level playing field. But if China follows the intend of WTO charter, TD-SCDMA won’t have any chance to survive.

But I guess lawyers have to have some use in them. I think China will do anything and everything to ensure TD-SCDMA will not just survive, but to thrive.

Expert had been predicting this date since 2005. It had been delayed so many times. The date is finally here. So this is a pretty big news.

I think there are several type of companies that will benefit from the wide-spread usage of TD-SCDMA.

First, equipment maker like SPRD will benefit for obvious reason. Second, I think WVAS companies such as KONG and SINA will benefit greatly. The WVAS companies that specialize in WAP will be the winner. KONG is betting it future survival on this date. SINA has been gearing all its web site to be compatible with WAP. For SINA, every story SINA generated have WAP counterparts. Both KONG and SINA had been throwing money into the drain for the past few years just to gear up for the arrival of 3G.

Of course, for the WVAS companies, the mobile operators such as CHL or CHU can throw monkey wrenches into this. But, unlike for SMS where KONG and SINA are just distributor and middlemen, now KONG and SINA will be content generators for the WAP. KONG and SINA will be in a stronger position. In addition, there is talks about China shaking up the mobile operators. That may prove positives to the WVAS companies since the mobile operators will be busying in re-structuring. Also, China will have a new ministry that will handle this function. The charter of the new super ministry can change also. That adds some uncertainties. The power of this industry is so lopsided tilt toward mobile operators such as CHL and CHU, any change to the existing structure can only help the WVAS companies such as KONG and SINA.

But according to sina link above, only 20,000 users will take part in the trial. There is no news of how long the trial will last. Therefore, it will not have any material contribution to all the companies that are discussed here. But in a year time, this could be an exciting growth driver for all the company mentioned here.