China's Wireless Mobile Spending Spree

Reflecting the need for round-the-clock connectivity, small and midsize businesses will spend billions on wireless infrastructure

Small and medium-sized businesses (SMBs) in China and India will invest approximately US$9.5 billion to beef up their wireless infrastructure in 2007, up 17 percent over last year, says AMI-Partners.

In its survey released last week, the research house said China will dominate spending in this market segment, with SMBs investing up to US$7.2 billion in various wireless components including hardware equipment, applications and services running on portable computers, PDAs, handheld devices and cell phones.

While 79 percent of the country's current PC-owning medium-sized businesses--with between 100 and 999 employees--have mobile workers, only 9 percent of the workforce in this company segment is mobile, said Antara Jaitly, a New York-based research analyst at AMI-Partners, in a statement. The study defines mobile employees as those who travel for business at least four to five days in a month.

Jaitly added that, at 10 percent, India's medium-sized businesses "exhibit low mobile workforce penetration", when 71 percent of Indian midsize businesses that own PCs have mobile employees.

The AMI-Partners study revealed that staff mobility among small businesses--with fewer than 99 employees--is also on the rise. Jaitly attributed this to strong economic and population growth in both countries, coupled with the fact that "relatively low penetration rates for wireless technologies in India and China provide connectivity opportunities for adoption of [mobile] products, such as notebook PCs and mobile phones".

According to the study, China-based midsize businesses are expanding their ownership of notebook PCs. Currently, 82 percent of these businesses own notebooks, while an additional 34 percent plan to buy one in the next 12 months.

"The growing importance of notebook PCs is evident even among price-sensitive small-sized businesses, that have traditionally viewed desktops favorably," Jaitly said. About 20 percent of China-based PC-owning small-sized businesses and 12 percent of India-based PC-owning small-sized businesses, indicated plans to buy notebook PCs this year, she added.

The study noted that India's medium-sized businesses are also increasing their adoption of the portable PC. Currently, 55 percent of the midsize companies own a notebook PC, while 14 percent plan to buy one this year.

In addition, SMBs in China and India will spend up to US$4.9 billion on wireless phone equipment and cell phone service this year, Jaitly said. "Factors such as brand recognition, expanding distribution network and portfolio breadth across price segments, are vital to mobile telecom success in these economies."

The increasing need for 24 hours by 7 days round-the-clock connectivity is also driving the demand for mobile access technologies among SMBs, according to the AMI-Partners study, which added that e-mail and instant messaging tools are the most common mobile applications used by these companies.

Jaitly said: "As SMBs in India and China reap the rewards of improved connectivity and mobility, adoption of networking services such as wireless LAN is expected to gain traction.

Currently, 33 percent of China's LAN-enabled medium-sized businesses have deployed wireless LAN (local area network), and an additional 25 percent of them are planning to do so in the next 12 months, she said.

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