Case Notes/Answers
Case Solutions for THE CHINESE WIRELESS
COMMUNICATIONS INDUSTRY IN 2012 AND BEYOND
AN INDUSTRY NOTE by Gang Zheng Wang Yajuan
Robert Burgelman
Discussion Questions:
1. What is the value chain of the global wireless communications industry?
2. Describe the general characteristics of the Chinese wireless industry in terms of the value
chain.
3. What is the relative position of the different operating system (OS) providers in the
Chinese wireless telecom industry?
4. What are the strengths and weakness of the different players in the Chinese wireless
industry, and what are the strategic implications?
5. Why has Apple’s iOS been less successful in the Chinese market in 2012?
6. How likely will Android become and remain dominant in the Chinese wireless industry?
Why?
7. What are the chances of Microsoft's Windows Phone OS becoming a significant player in
the Chinese wireless industry? Why?
8. Why does the Chinese government support the TD-SCDMA2 standard? What long-term
strategic objectives does it serve？ What are the strategic implications for the non-Chinese
companies？
9. What is the relative position of the various handset device manufacturers? What is the
explanation for Samsung’s rise in Chinese market?
10. Under what conditions might the Chinese entrepreneurial companies try to develop their
own mobile OS standard? What would it take for such Chinese standards to become
successful (widely adopted)?
11. What is the relative position of the chipset providers? Under what conditions could Intel
become an important player in the Chinese market?
, TEACHING NOTE: SM-227
DATE: 05/13/14
TEACHING NOTE FOR
“THE CHINESE WIRELESS COMMUNICATIONS INDUSTRY IN
2012 AND BEYOND ”
CASE OVERVIEW
The case describes the Chinese wireless communications industry, which has been the world’s
largest market since mid-2012 and shows the highest adoption rate of smartphones. The scale of
the Chinese wireless communications industry has grown very fast since the introduction of the
first generation (1G) of the cellular mobile communication system in 1987. By 2012, the number
of mobile phone users in China had reached 1.11 billion, including 234 million 3G subscribers.1
Over time, the industry value chain and structure has evolved from simple to complex and in
early 2013 was still in the process of establishing a stable equilibrium. The case also describes
how the strategic dynamics of the Chinese wireless communications industry, and the various
ecosystems that it contains, are different in important ways from those of the European and
North American ones.
The case is intended for use in courses focused on the strategic management of technology and
innovation in the global context. It highlights the rapid change of the Chinese wireless
communication industry and the dynamic forces that were shaping the fortunes of the major
Chinese service providers, as well as the relative success of Chinese and non-Chinese handset
manufacturers and major component suppliers in 2012 and beyond.
The major objectives of the case are to help students identify and understand:
(1) The strategic forces that were driving the Chinese wireless industry forward in 2012 and
beyond.
(2) The general characteristics of the Chinese wireless industry.
1
Lei Zhao, “China's Mobile Telecom Market Sees Rapid Growth,” China Daily, February 22, 2013,
http://www.chinadaily.com.cn/china/2013-02/22/content_16249905.htm (March 3, 2013).
,
, Teaching Note for “The Chinese Wireless Communications Industry in 2012 and Beyond” SM-227 TN p2
(3) How these strategic forces and specific market dynamics were and are shaping the prospects
of the Chinese local and international participants in the Chinese wireless industry.
MAJOR THEMES
The case provides an opportunity to discuss the following major themes/questions:
1. How have technological change and market demand fostered the rapid advancement of the
wireless communications industry in China?
2. How have changing competitive dynamics resulted from this rapid technological change in
China?
3.How are strategic market forces shaping the prospects of the Chinese local and international
participants in the Chinese wireless industry?
4. How may the “Cross Boundary Disruptor”(XBD) framework help assess the chances of
various would-be XBDs of the wireless communications industry (Apple and Google, or Lenovo,
Huawei and Xiaomi) to succeed in radically changing the new potential industry equilibrium to
their advantage in the Chinese wireless industry?
ANALYTICAL QUESTIONS
1. What is the value chain of the global wireless communications industry?
2. Describe the general characteristics of the Chinese wireless industry in terms of the value chain.
3. What is the relative position of the different operating system (OS) providers in the Chinese
wireless telecom industry?
4. What are the strengths and weakness of the different players in the Chinese wireless industry, and
what are the strategic implications?
5. Why has Apple’s iOS been less successful in the Chinese market in 2012?
6. How likely will Android become and remain dominant in the Chinese wireless industry? Why?
7. What are the chances of Microsoft's Windows Phone OS becoming a significant player in the
Chinese wireless industry? Why?
8. Why does the Chinese government support the TD-SCDMA2 standard? What long-term strategic
objectives does it serve？What are the strategic implications for the non-Chinese companies？
9. What is the relative position of the various handset device manufacturers? What is the explanation
for Samsung’s rise in Chinese market?
10. Under what conditions might the Chinese entrepreneurial companies try to develop their own
mobile OS standard? What would it take for such Chinese standards to become successful (widely
adopted)?
11. What is the relative position of the chipset providers? Under what conditions could Intel become
an important player in the Chinese market?
2
TD-SCDMA is a technical standard developed through China's independent innovation, and is a third-generation
communication technology that is recognized internationally.
Case Solutions for THE CHINESE WIRELESS
COMMUNICATIONS INDUSTRY IN 2012 AND BEYOND
AN INDUSTRY NOTE by Gang Zheng Wang Yajuan
Robert Burgelman
Discussion Questions:
1. What is the value chain of the global wireless communications industry?
2. Describe the general characteristics of the Chinese wireless industry in terms of the value
chain.
3. What is the relative position of the different operating system (OS) providers in the
Chinese wireless telecom industry?
4. What are the strengths and weakness of the different players in the Chinese wireless
industry, and what are the strategic implications?
5. Why has Apple’s iOS been less successful in the Chinese market in 2012?
6. How likely will Android become and remain dominant in the Chinese wireless industry?
Why?
7. What are the chances of Microsoft's Windows Phone OS becoming a significant player in
the Chinese wireless industry? Why?
8. Why does the Chinese government support the TD-SCDMA2 standard? What long-term
strategic objectives does it serve？ What are the strategic implications for the non-Chinese
companies？
9. What is the relative position of the various handset device manufacturers? What is the
explanation for Samsung’s rise in Chinese market?
10. Under what conditions might the Chinese entrepreneurial companies try to develop their
own mobile OS standard? What would it take for such Chinese standards to become
successful (widely adopted)?
11. What is the relative position of the chipset providers? Under what conditions could Intel
become an important player in the Chinese market?
, TEACHING NOTE: SM-227
DATE: 05/13/14
TEACHING NOTE FOR
“THE CHINESE WIRELESS COMMUNICATIONS INDUSTRY IN
2012 AND BEYOND ”
CASE OVERVIEW
The case describes the Chinese wireless communications industry, which has been the world’s
largest market since mid-2012 and shows the highest adoption rate of smartphones. The scale of
the Chinese wireless communications industry has grown very fast since the introduction of the
first generation (1G) of the cellular mobile communication system in 1987. By 2012, the number
of mobile phone users in China had reached 1.11 billion, including 234 million 3G subscribers.1
Over time, the industry value chain and structure has evolved from simple to complex and in
early 2013 was still in the process of establishing a stable equilibrium. The case also describes
how the strategic dynamics of the Chinese wireless communications industry, and the various
ecosystems that it contains, are different in important ways from those of the European and
North American ones.
The case is intended for use in courses focused on the strategic management of technology and
innovation in the global context. It highlights the rapid change of the Chinese wireless
communication industry and the dynamic forces that were shaping the fortunes of the major
Chinese service providers, as well as the relative success of Chinese and non-Chinese handset
manufacturers and major component suppliers in 2012 and beyond.
The major objectives of the case are to help students identify and understand:
(1) The strategic forces that were driving the Chinese wireless industry forward in 2012 and
beyond.
(2) The general characteristics of the Chinese wireless industry.
1
Lei Zhao, “China's Mobile Telecom Market Sees Rapid Growth,” China Daily, February 22, 2013,
http://www.chinadaily.com.cn/china/2013-02/22/content_16249905.htm (March 3, 2013).
,
, Teaching Note for “The Chinese Wireless Communications Industry in 2012 and Beyond” SM-227 TN p2
(3) How these strategic forces and specific market dynamics were and are shaping the prospects
of the Chinese local and international participants in the Chinese wireless industry.
MAJOR THEMES
The case provides an opportunity to discuss the following major themes/questions:
1. How have technological change and market demand fostered the rapid advancement of the
wireless communications industry in China?
2. How have changing competitive dynamics resulted from this rapid technological change in
China?
3.How are strategic market forces shaping the prospects of the Chinese local and international
participants in the Chinese wireless industry?
4. How may the “Cross Boundary Disruptor”(XBD) framework help assess the chances of
various would-be XBDs of the wireless communications industry (Apple and Google, or Lenovo,
Huawei and Xiaomi) to succeed in radically changing the new potential industry equilibrium to
their advantage in the Chinese wireless industry?
ANALYTICAL QUESTIONS
1. What is the value chain of the global wireless communications industry?
2. Describe the general characteristics of the Chinese wireless industry in terms of the value chain.
3. What is the relative position of the different operating system (OS) providers in the Chinese
wireless telecom industry?
4. What are the strengths and weakness of the different players in the Chinese wireless industry, and
what are the strategic implications?
5. Why has Apple’s iOS been less successful in the Chinese market in 2012?
6. How likely will Android become and remain dominant in the Chinese wireless industry? Why?
7. What are the chances of Microsoft's Windows Phone OS becoming a significant player in the
Chinese wireless industry? Why?
8. Why does the Chinese government support the TD-SCDMA2 standard? What long-term strategic
objectives does it serve？What are the strategic implications for the non-Chinese companies？
9. What is the relative position of the various handset device manufacturers? What is the explanation
for Samsung’s rise in Chinese market?
10. Under what conditions might the Chinese entrepreneurial companies try to develop their own
mobile OS standard? What would it take for such Chinese standards to become successful (widely
adopted)?
11. What is the relative position of the chipset providers? Under what conditions could Intel become
an important player in the Chinese market?
2
TD-SCDMA is a technical standard developed through China's independent innovation, and is a third-generation
communication technology that is recognized internationally.
