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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 157

China Business Intelligence No. 157

Samsung Economic Research Institute Beijing Office

May 6, 2010

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Highlights:

I. Industry

Market demand for China's optical communication has reached a record high. As the convergence of 3G standard and the three major networks drastically expands investment in setting up optical communication, it is expected to become China's core business within the next three years. Foreign optical communication companies are strengthening cooperation on R&D with Chinese companies. Industrial alliances between different regions and industrial chains are driving standardization and increasing the scale of each industry. From the user's perspective, it is necessary to implement optical communication businesses and introduce the appropriate operation model. As optical fibers are used in diverse areas such as finance, transportation, energy, monitoring and medical sectors based on industries becoming increasingly information-oriented, optical communication solutions are expected to gain greater attention.

II. Economy

After experiencing slow growth since its entry into the Chinese market in 2006, Research In Motion (RIM), has begun to cooperate with Chinese telecommunication companies. In 2009, RIM partnered with China Telecom to attract customers and adopted differentiated operation models from its competitors. Sales of Blackberry in China in 2008 stood in the thousands, with smart phone taking up less than 1% of the market share. From April 2009, RIM made several adjustments in structure, R&D, production, purchase and distribution, to meet the demands of the Chinese consumer. Based on its advanced technology and solution in the wireless market, Blackberry earned the trust of large global corporations and business users. RIM's operation model may face difficulties in China's highly competitive smart phone market. Therefore, RIM needs to develop localized applications while expanding its Social Networking Services based on its strengths in push email technology.

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