China's Mobile Internet Users May Double in 5 Years, Lee Says
Lee Kai-fu, chairman of Innovation Works
Nelson Ching/Bloomberg
Lee Kai-fu, chairman and chief executive officer of Innovation Works Inc., speaks in Beijing.
Lee Kai-fu, chairman and chief executive officer of Innovation Works Inc., speaks in Beijing. Photographer: Nelson Ching/Bloomberg
Sept. 7 (Bloomberg) -- Bloomberg's Stephen Engle reports on the business strategy of Lee Kai-fu, the former head of Google Inc.’s China division. Lee set up Innovation Works, a technology business incubator, after leaving Google. His company is investing in a mobile-software maker and 11 other businesses in the country to benefit from booming demand for Web technology. Lee says China’s mobile Internet users may more than double within five years as smartphones that can browse the Web and download music become more affordable. Bloomberg's Susan Li also speaks. (Source: Bloomberg)
China’s mobile Internet users may more than double within five years as smartphones that can browse the Web and download music become more affordable, Lee Kai-fu, the former head of Google Inc.’s China division, said.
The number of people accessing the Internet on their mobile devices in China may grow to 800 million within three to five years, from about 300 million now, Lee said today in an interview at the Beijing headquarters of Innovation Works, the technology business incubator he set up after leaving Google.
Lee’s company is investing in a mobile-software maker and 11 other businesses in the country to benefit from booming demand for Web technology. Lenovo Group Ltd., China’s biggest maker of personal computers, expects products aimed at the mobile Internet market may comprise as much as 20 percent of Lenovo’s sales in five years, President Rory Read said in April.
“It’s beginning to really take off,” Lee, 48, said of the nation’s mobile Internet market. “Everyone is starting out, figuring out how things will go. That’s exactly the right time when we want to get engaged.”
As 83 percent of mobile Internet users in China are aged about 29 years or younger, they don’t have a lot of money and are very sensitive to handset prices, Lee said. Smartphones must be priced lower than 2,000 yuan ($295), or less than half the current cost of more than 4,000 yuan, to be affordable, he said.
The price of a smartphone running Google’s Android system is likely to drop to about 1,500 yuan this year and 750 yuan in 2011, making such devices affordable to more people, Lee said.
Innovation Works raised $115 million to invest in startups, and eight of the 12 companies the company has funded so far are in the mobile Internet business, Lee said. Innovation Works, which received funding from WI Harper Group and Foxconn International Holdings Ltd., invests between $15,000 and $2.5 million in new businesses and supports them by providing access to technology-industry expertise, according to Lee.
--Edmond Lococo, Stephen Engle. With assistance from Douglas MacMillan in New York. Editors: Suresh Seshadri, Terje Langeland
To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at +86-10-6649-7507 or elococo@bloomberg.net; Stephen Engle in Beijing at +86-10-6649-7582 or sengle1@bloomberg.net
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