Abstract

Partners of Equal Standing for Telecom Operators

Comparing the three models of telecom operators and netbook PC vendors, the model similar to the mobile phone bundled packages is currently used the most. More multinational operators are expected to roll out this type of models in 2009.

In the HTC model, ODM makers have to invest significant resources in after-sales services. In the current economic climate, many makers are reducing their expenditure budgets for 2009 to deal with the severe industry environment. Therefore, the influence of this particular model is expected to be limited in 2009.

Furthermore, operators have experience with cooperation with mobile phone vendors. For netbook PC brands, the increase in investments and resources is relatively limited, and their can expand their distribution deployment.

The orders released by major telecom operators are usually very large. If netbook PC vendors have delays in product deliveries, there is a real possibility that they have to pay large compensation as stipulated by contractual obligations. Certification of wireless modules is also time-consuming. For second-tier vendors, the relative risks are even larger than those for first-tier vendors.

For second-tier netbook PC vendors, which have relatively weak capabilities in terms of obtaining components and shipment efficiency, seeking partners with similar standing in their own markets is a better option when looking for telecom operators. They should choose regional operators, new entrants or operators which are ranked second or third in their respective markets.

Second-tier netbook PC vendors should cooperate with operators which have limited demand for product shipments and no strict contract stipulations. This will allow these vendors to steadily progress, accumulating cooperation experience and operational expertise. When shipment volume and market share increase, bargaining power will grow accordingly, allowing vendors to expand the scope and levels of cooperation.

Regarding models whereby distributors assemble their own packages, the leading role in putting together these packages lies with these distributors. If branded netbook PC vendors are able to fully exploit their original cooperation links with distributors, this model can serve as an extra marketing tool for them, and can also push their product sales.

For consumers, although the low-priced or free netbook PCs are attractive, their willingness to buy these products is affected if the monthly service charges are too high. Especially in the current economic climate, with large-scale layoffs and salary reductions, people will cut back on their monthly spending. Therefore, the service charge rates of the operator service will therefore be a key factor in determining whether consumers will opt for this type of bundled service packages.

Appendix

Research Scope

This report examines cooperation between netbook PC vendors and telecom operators whereby they bundle netbook PCs with mobile broadband services. The report analyzes bundled offerings which were launched before December 2008.

Product Definitions

Netbook PCs are notebook PC products with screen sizes between 7- and 10.2-inch. End-market prices of netbook PCs generally range from US$350 to US$650. Internet access is the main feature of netbook PCs.

List of Companies