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Fone +: Connecting Millions Of New Users To The Net. Eric Chang Director of Incubation Microsoft Advanced Technology Center Beijing, China. Fone+: “A connected computing experience via a cell phone”. China – A Tale Of 3 Countries. The China that got left behind

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Fone+: Connecting Millions Of New Users To The Net

Eric Chang

Director of Incubation

Microsoft Advanced Technology Center

Beijing, China

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“A connected computing experience via a cell phone”

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China – A Tale Of 3 Countries

  • The China that got left behind

  • Annual HH income = US$1k

  • Living off the land, not the global economy

  • Symbolized by the peasant

Total China

Household : 368m

People : 1298m

  • The “Glam” China

  • Top 10 cities – with Beijing, Shanghai and Guangzhou as Top 3

  • Annual HH income in Top 10 = US$4k, in Top 3 = US$5.5k

  • Symbolized by the Pudongskyline


Household : 182m

People : 543m


Household : 186m

People : 755m

Urban, Top 10 cities

Household : 22m

People : 49m

Urban, Everyone else

Household : 160m

People : 494m

  • The “Middle” China,

  • The “real “ emerging market of China

  • Annual HH income = US$3k

  • Symbolized by the moped

Source: China National Bureau of Statistics, & Gallup Poll, Dec-2004, inspired by Sen. John Edwards’ “Two Americas”

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Wide Income Distribution

Income differences between urban vs. rural

Even within urban, top 10% households make 8X that of bottom 10%

USD 000

Source: Gallup Poll, Dec-2004

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TV and Mobile Phones Are Pervasive

Dramatic increase in electronics ownership between 1999 and 2004

…but significant gap between large cities, small towns and rural areas in 2004

% ownership by household

% ownership by household, 2004

Source: Gallup Poll, Dec-2004

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Fone+ Research in Middle China

  • Recently concluded qualitative research in Henan Province, Middle China; tested reaction to:

  • Fone+ as a PC alternative

  • Various applications on Fone+

  • Price points, hardware brands

  • Participants all made between US$100 and US $250 per month, PC literate, owned mobile phones but did not have a PC at home

  • Different age and life profiles

  • Young Males 18 – 24

  • Young Females 18– 24

  • Single 24 – 35

  • Parents 35 – 45

  • Different geographic areas within Henan

  • Large metropolitan area (ZhengZhou)

  • Mid-sized, emerging town (XuChang)

  • Small town, semi-rural (HuiCounty)

  • Also conducted quantitative survey of 1146 people across non-rural China (executed by McKinsey)

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Emerging China: XuChang

A sea of mopeds in front of town’s only non-Chinese restaurant

But clearly, there is a new bourgeois in town

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Small Town China: Hui County


~½ mil

HH Income:

~ US$200 per month

1/3 billion Chinese live in towns like Hui County

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Top Scenarios Fully Leverage TV

Q: “If you could select just one thing, what would you say appeals to you the most about this idea?

% that selected the responses below



Top scenarios fully leverage the TV







Source: Quantitative Survey of 1146 people aged 13 to 54 across non-rural China

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Please come to DemoFest tomorrow!

Eric Chang

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© 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.

The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.