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Doors closing to Google in China mobile market

01 апреля 2010

Google Inc.'s censorship battle with Beijing might cost the U.S. giant more than its stake in the regular Internet in China--the door might also be slamming shut on its bid to conquer the mobile web market.

Mobile operators and handset manufacturers already seem to be turning their backs on the U.S. firm, after it rerouted its Chinese search engine traffic to its Hong Kong site last week to evade Beijing's vast army of censors.

China has the world's largest mobile market of more than 750 million subscribers, many of whom access the web on their handsets.

And experts say China Mobile and China Unicom--the main players--will be hard-pressed to maintain ties with Google.

"For state-owned companies, it probably is a must (to abandon Google). For private companies, it's a practical decision," said Eric Wen, head of Internet and media research at Mirae Asset Securities in Hong Kong.

"If Google.com.hk is unstable or could even be shut down, a logical choice is not to work with Google."

Already, the writing on the wall isn't good for the U.S. Internet titan.

The company said Monday its mobile Internet services were "partially blocked" in mainland China, but it wasn't immediately clear whether the interruption was a retaliatory move by China, or a service glitch.

China Mobile Ltd., the country's top cellphone operator with 533 million subscribers at the end of February, uses Google's search engine on its mobile Internet home page. Officials refused to comment on future plans.

China Unicom (Hong Kong) Ltd., number two in the market with 151 million subscribers, has decided to remove Google's search function from new handsets, the Financial Times reported, quoting company president Lu Yimin.

A Unicom spokeswoman said there is currently no "direct cooperation" with Google on search services, and that handset manufacturers decide themselves on a search engine provider.

The spokeswoman added that in choosing a partner for mobile search, Unicom would favor "cooperation in line with China's laws"--hinting that an uncensored Google wouldn't be welcome.

Patrice Nordey, an expert on high-tech issues in Asia for Atelier BNP Paribas, says even without formal announcements from the Chinese mobile heavyweights, their choice "seems inevitable."

In a bid to placate nervous Chinese operators, handset makers are likely to strip the Google search function from mobiles powered by the U.S. firm's Android operating system.

Motorola Inc., the biggest U.S. mobile maker, has reportedly already made that choice for its phones sold in China. The company refused to comment when contacted.

Analysts said while Google no longer makes any money from Android--the technology was shared with other firms through the Open Handset Alliance--it loses a competitive advantage if its search engine isn't part of the package.

"Android is the weapon in Google's long-term strategy to break into and saturate the mobile Internet market" with its associated services, Nordey said.

"Google made it its Trojan horse, because it figured that if the world's first billion Internet users were on PCs, the second billion would use their mobiles," he said.

"In such a competitive market, Google needed China, the world's top user of Android-powered phones."

China today offers only a small fraction of Google's global sales, and experts say the long-term loss in the world's largest Internet market is difficult to calculate.

Shaun Rein, director of China Market Research, said the beneficiary could be Microsoft Corp. with its upstart Bing search engine, which has a Chinese version and the company's global heft behind it.

"A lot of mobile phones are rumoured to be dropping Google and going to work with Bing," Rein said.

Источник: Total Telecom

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