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The tech world’s eyes are glued firmly on China, and with good reason too. It has the world’s largest online population. And despite, or perhaps because of, a series of controls colloquially known as the Great Firewall of China, it is home to some of the world’s largest social networks.
Once written off as Twitter and Facebook clones, the likes of Sina Weibo and Renren now regularly have space in the Western media. Chinese mobile manufacturers like ZTE and Huawei meanwhile are becoming dominant players in the smartphone scene, largely on the back of their successes in the budget Android sector.
This clearer understanding of how the country’s tech and online space works now means that we can also get a clearer picture of where it’s going in the future. Tech research company Gartner has outlined five key predictions for how the space will evolve in 2013 and beyond.
1. By 2013, Lenovo will become the top smartphone vendor in China
Lenovo is already the world’s top PC manufacturer, and the company’s mobile business is gaining real momentum. Its smartphone market share rose from 1.7% in Q3 2011 to 14.8% in this year, making it the number two smartphone brand, ahead of Apple (6.9%) and behind Samsung (16.7%). According to Gartner, it is the only local smartphone player that can compete with global top brands in China, thanks to its household brand recognition, nationwide distribution, strong portfolio and reasonable pricing.
A large part of its success is down to the fact that it is positioned at the mid-to-lower end which will drive much of its future growth, and this is where global brands are less competitive. It will also gain share from open markets where its brand and distribution are better established than local competitors.
2. By 2014, at least three personal cloud providers will extend the service to TV
Many personal cloud services today offer content access from computing devices that include the PC, mobile phones and tablets. Some device vendors enable content sharing between TV and mobile devices via apps and Wi-Fi connections, but such service is limited to devices of the same brand and doesn’t make use of the cloud. Personal cloud services will break such limitation and bring content access and sharing across devices of different brands.
Gartner reckons that at least three providers will extend their services to the TV by 2014. Going forward, providers will look for new areas of differentiation, and TV support will be one of those. This can also enhance the user experience where users can pause on one device and resume from the other. In the future, this could extend beyond media content to allow users to make calls, view emails and respond to text messages from the TV while they are away from computing devices.
3. By 2016, tablet shipments will equal those of mobile PCs
As is the case in the rest of the world, tablets are becoming much more affordable in China. Gartner reckons that the average price of media tablets in the country will drop from US$262 in 2011 to US$176 in 2016. This price drop will make tablets a much more viable purchase than laptops, ultrabooks and netbooks. According to Gartner, tablet shipments will reach 57-million units in China in 2016, nearly matching mobile PCs at 58-million units.
The adoption of media tablets is not limited to the consumer market. There is increasing media tablet demand in industries such as hospitality, insurance, finance, retail transportation, and education.
4. By 2016, most enterprise server workloads in China will be virtualised
Similar to the worldwide trend, the growth of server virtualization in China will be fuelled by data center energy saving, floor space reduction and servers utilization as well as the path to private cloud.
Growth of Hosted Virtual Desktop (HVD) workloads will outpace server workloads over the next few years. The growth in server virtualization and HVD market will impose significant opportunities for virtualization technology vendors, systems integrators and private cloud service providers, especially for those who have already built a local presence and delivery capabilities in China.
5. By 2016 at least 50% of today’s government-funded public cloud service providers in China will be out of the market
The Chinese government’s twelfth five-year plan listed public cloud computing as a national-level strategic technology and the government has encouraged investment in the last five years by providing direct funding or policy incentives such as tax reductions. Around 10 provincial governments will build 30 large data centers of more than 1 000 square meters each to support companies by offering public cloud services locally.
In the short-term more government-involved public cloud computing service data centers will get online, but many of them will not be able to make their businesses profitable, and they will be forced out of the market — many by being sold to other providers — before they can expand. Anyone who does survive will have the opportunity to demonstrate a profitable business model or real innovation.