Transcript Fone+: Connecting Millions of New Users to the Net

Eric Chang
Director of Incubation
Microsoft Advanced Technology Center
Beijing, China
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Total China
The “Glam” China
Top 10 cities – with Beijing,
Shanghai and Guangzhou as Top
3
Annual HH income in Top 10 =
US$4k, in Top 3 = US$5.5k
Symbolized by the Pudong skyline
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Household : 368m
People : 1298m
The China that got left behind
Annual HH income = US$1k
Living off the land, not the
global economy
Symbolized by the peasant
Urban
Rural
Household : 182m
People : 543m
Household : 186m
People : 755m
Urban, Top 10 cities
Urban, Everyone else
Household : 22m
People : 49m
Household : 160m
People : 494m
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The “Middle” China,
The “real “ emerging market of China
Annual HH income = US$3k
Symbolized by the moped
Source: China National Bureau of Statistics, & Gallup Poll, Dec-2004, inspired by Sen. John Edwards’ “Two Americas”
Income differences between urban
Even within urban, top 10%
households make 8X that of bottom
vs. rural
10%
USD 000
Top 10%
9.1
80-90%
5.5
60-80%
4.2
40-60%
3.3
20-40%
2.5
10-20%
1.9
Bottom 10%
1.3
0
Source: Gallup Poll, Dec-2004
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Dramatic increase in electronics
ownership between 1999 and 2004
% ownership
by household
Source: Gallup Poll, Dec-2004
…but significant gap between large
cities, small towns and rural areas in
2004
% ownership by
household, 2004
Recently concluded qualitative research in Henan
Province, Middle China; tested reaction to:
Fone+ as a PC alternative
Various applications on Fone+
Price points, hardware brands
Participants all made between US$100 and US $250
per month, PC literate, owned mobile phones but did
not have a PC at home
Different age and life profiles
Young Males 18 – 24
Young Females 18– 24
Single 24 – 35
Parents 35 – 45
Different geographic areas within Henan
Large metropolitan area (ZhengZhou)
Mid-sized, emerging town (XuChang)
Small town, semi-rural (Hui County)
Also conducted quantitative survey of 1146 people
across non-rural China (executed by McKinsey)
A sea of mopeds in front of
town’s only non-Chinese
restaurant
But clearly, there is a
new bourgeois in
town
Pop:
~½ mil
HH
Income:
~ US$200
per month
1/3 billion
Chinese
live in
towns like
Hui County
Education
• User Profile: Students below 18
• Grade 8 students in China
• Seed Education community
Emerging Market Internet
Access
• User Profile: Rural Households
Entertainment
• User Profile: (20-25 years old)
• Music, video & casual games
Q: “If you could select just one thing, what would you say appeals to you the
most about this idea?
% that selected the responses below
23%
22%
Top scenarios fully leverage the TV
16%
8%
7%
15%
6%
3%
Source: Quantitative Survey of 1146 people aged 13 to 54 across non-rural China
Eric Chang
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