A number of Chinese Internet companies started to tap into the smartphone market this year, a move that will further stir up competition in the sector.
Tencent Holdings Ltd released six smartphone models targeting student customers. Baidu Inc, China's most-used search engine, introduced two smartphone models running on its self-developed mobile operating system.
Qihoo 360 Technology, an anti-virus company, teamed up with three manufacturers including the nation's home appliance giant Haier Group to offer new models to the market. "As an Internet company, Qihoo has more than 100 million users and we are good at online marketing. Both of our specialties can help mobile phone makers explore the market and boost sales," said Zhou Hongyi, chief executive officer of Qihoo 360.
Almost all the devices provided by the Web companies were priced lower than 2,000 yuan ($314), less than half the price of an iPhone 4S.
"The competition in the low-end market is poised to grow as more businesses enter it and telecommunication carriers start to cut subsidies to lower-end smartphone makers," said Hao from the academy of telecomunication research.
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Qualcomm's competitors are not Tencent, Baidu, or Qihoo 360. First, those companies are not really big players in the smartphone market, they are much smaller than Huawei and ZTE. Second, they are phone makers, not chip makers. Qualcomm's real competitors are Spectrum, Mediatek, RockChip and AllWinner, they make and sell much more low-end 3G chips and ARM-based MPUs than Qualcomm in China.
Seems to be a catchup move but given Qualcomm's past successes, this may be a winner. The high end smart phone market is saturated any way so it is inevitable for the chip makers to look else where.