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MMS Market Warming Up
China's MMS (multimedia messaging service) market will be on a roll this year thanks to falling prices and the wider availability of MMS-enabled handsets.

MMS-enabled handsets priced below 2,000 yuan (US$241) are expected to be on the shelves this year, industry executives said.

Those handsets most likely will not include cameras, they said.

MMS-enabled handsets with built-in cameras sell for about 5,000 yuan (US$602).

"With major handset makers, we are investigating the potential of the market for MMS-enabled mobile phones without embedded cameras," said Ye Bing, a senior official with China Mobile.

China Mobile launched the much-touted MMS service in October.

More than 2 million MMS messages were sent by the end of last year.

It's still a far cry from the SMS (short messaging service) boom.

During the just-ended seven-day Spring Festival holiday, China Mobile's subscribers sent nearly 6 billion SMS messages.

Meanwhile, only 1 million MMS messages were sent, indicate the latest statistics.

Analysts believe MMS is more likely than WAP (wireless application protocol) to emulate the runaway success of SMS.

WAP is a cut-down version of the Internet for mobile phones.

Unlike WAP, MMS had the advantage of being user friendly, and was a logical next step after SMS.

SMS is restricted to text, while MMS supports the transmission of colour pictures, animation, recorded sound and video.

Industry executives and analysts widely attribute MMS' slower-than-expected development to a lack of MMS-capable handsets, and their exorbitant prices.

Falling prices, however, should help MMS secure commercial success in China's price-sensitive market.

"Only by lowering the market barriers, will we likely foster a large pool of users," Ye said.

China Mobile President Lu Xiangdong said previously the company would suggest manufacturers produce MMS-enabled handsets without cameras to attract users and warm up the market.

Prices of MMS-capable handsets will continue declining this year, and millions of people will subscribe to the service, Lu predicted.

China by the end of November had more than 200 million mobile phone users, indicates the Ministry of Information Industry.

To promote its MMS service, China Mobile is subsidizing MMS-capable handsets in some cities.

China Unicom, Mobile's arch rival, reportedly plans to roll out its MMS service in March.

Convinced that MMS will be the next big thing, manufacturers are rushing to jump onto the MMS bandwagon.

Nokia previously said almost all of its new products this year would be MMS-capable.

Hard-charging domestic manufacturers are also expected to churn out MMS-enabled handsets, with or without cameras, beginning this quarter.

Eastcom, based in Hangzhou, in East China's Zhejiang Province, will enable 90 per cent of its new models this year with MMS functions, said company Executive President Ge Chen.

The company expects 80 per cent of its revenues from handset sales will come from MMS-enabled phones, Ge added.

Most of the new handsets Ningbo Bird will launch during the year's second half will have colour screens and MMS functions, said company official Wang Siqing.

As MMS-enabled handsets offer much higher profits, manufacturers are likely to initiate a price war this year, analysts said.

While increasing availability and declining prices of MMS-enabled handsets are revving up the MMS market, a complete industrial chain is vital to the service's success, industry executives suggested.

"Only with the involvement of all parties will MMS take off," Ye said.

An MMS business model attractive enough to content providers should be established, suggested Dong Yue, in charge of China Unicom's mobile data service.

"Sharing revenues from MMS services with content providers and service providers is the key to the take-off of MMS," he said.

Web portals, for example, can charge users for sending brief messages via their websites to cellphones.

Websites would keep 80 per cent of the revenues, while mobile operators would receive the remainder.

Rumours have been swirling that China Mobile might allow Web portals to keep 85 per cent of the revenues.

Currently, sending a SMS message costs 0.1 yuan (1 US cent), compared with 0.9 yuan (10 US cents) for an MMS message.

Analysts expect those fees will be lowered as more people subscribe to the MMS service.

(Business Weekly February 19, 2003)

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