Four Major Business Models of Intelligent Terminal

The first devastating creation in this global consumer electronics storm is to deepen the integration of computer networks and communication areas, and the industry barriers established by traditional telecom operators and equipment manufacturers was finally wiped out in the intelligent mobile terminal revolution led by Apple. In the near future, it is expected we will view the important things in our daily life such as TV and automotive will achieve intelligence.

First, we will see the rapid promotion of mobile terminal intelligence, and mobile internet era is no longer a dream. Nowadays, we are in a stage with intelligent terminal popularity; there is data showing Chinese PC ownership at the end of 2011 is 320 million units where smartphone has a 130-million-unit ownership and tablet PC (PAD) achieves ownership of 30 million units; moreover, the penetration rate of these types of products are quite high.
At present, there are four major business models in intelligent terminal industry chain.

Model one: enter into supply chain led by mainstream intelligent terminal manufacturers. Taking smartphone as an example, Apple iPhone in the past years got worldwide explosive growth in sales, which results in many Chinese components manufacturers entering Apple supply chain all realize rapid development and enhancement whether in enterprise performance or in industry position. A number of investors usually hold the first reaction of Chinese enterprises only gaining hard-earned money with very low profit margin and without technical content, the gross margin being low. However, in fact this is a kind of rosy glasses. In global division of labor, increasing Chinese companies can provide good solutions to problems, constantly winning orders through cooperating with global giants, which manifests competitiveness, but more symbolizes China’s electronics industry technical level increase.

Model two: Hardware and software integration becomes the trend. Previously, PC chain dominated by Wintel was a division of labor and cooperation model where each aspect in the industry chain focused on the own field and there was no interference with each other. While in intelligent times, Apple created “Apple Store+iPhone” model, which in essence, is hardware and software integration, connecting upstream and downstream industry chain, in other words, hardware terminal holds users and software service platform obtains user value; this kind of hardware and software integration greatly strengthens Apple’s competing advantage, making Apple get unprecedented commercial success.

Model three: A cloud and multi-screen is the big direction. Different intelligent terminals are not isolated from but connective with each other, resulting in the implement of one cloud and multi-screen. For example, Apple’s App Store can be operated in iPhone, in iPad as well as in iTV. As a matter of fact, there has appeared a host of “one cloud and multi-screen” enterprises in domestic market, such as video cloud, game cloud and voice cloud. These companies distribute cloud service to various terminal screens. At the current stage, not all terminal screens can achieve commercial value, but the model allows form strong competitive advantages: some screens are used to realize value, while some to maintain users.

Model four: Premium content / application value grows greater. Intelligent terminal popularity and multi-screen interaction bring rapid amplification of propagation effects, which is very favorable to fast realization of premium content and application value.