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In the coldest time of China’s mobile phone market， a “polar bear” suddenly broke in.
People that paid close attention to China or the APEC might know the Russian mobile phone brand YotaPhone， which was sent to Chinese President Xi Jinping by Russian President Vladimir Putin as a gift during the meeting.
After a high-profile debut in China， YotaPhone has been confirmed to be available for Chinese consumers in the first quarter of next year.
However， it seems the worst time for YotaPhone to come to China as the Chinese smartphone market has already waved goodbye to the era of high- speed growth and the competition here is utmost intense.
But there are not only woes waiting for YotaPhone. China is now in the age of updating 3G to 4G， which is bringing the new brands and enterprises in this market， including YotaPhone， new opportunities. Now， everyone is looking at YotaPhone， which is a total stranger to the Chinese market. Can it get used to the environment here？
Not Yearning for Profits in the First Year
The Russian smartphone brands， which are far from the market leaders in the world， remained unknown in the Chinese market before the APEC.
Yota Devices is only a young company which was founded three years ago. YotaPhone1， the first product of this company， was only able to be produced massively at the end of 2013. However， YotaPhone did not come to the market in a low profile. In 2013 it entered the markets of Russia， Europe and Middle East – 15 countries/ regions in total. According to its plan， YotaPhone is going to get into around 20 countries/regions in the world at the end of 2014.
“I do not know what Mr. Putin has been through before making such a decision，” says Vlad Martynov， CEO of Yota Devices. But he confirmed to the Chinese journalists that Yota Device never made such a request to President Putin. As Vlad Martynov analyzed， Putin might want to deliver a message that Russia has been in a completely new area and the high-tech consumer prod- ucts will initiate the cooperation with China’s ecommerce dealers.
The director of China’s B2C website JD.com has confirmed the cooperation between JD and Yota Devices. “JD kept in close touch with Yota Devices. We are very willing to introduce YotaPhone into China and help it get good performance in this market.”
In Vlad Martynov’s opinion， the core competitiveness and the creative point of YotaPhone is with its “second screen” which happened to be an e-ink screen. In the other word， YotaPhone is a smartphone and also a Internet-accessible e-book after being turned over. In spite of this innovation， YotaPhone is still facing great challenges in China. “The mobile phone market in China has been obviously divided into two sectors – several big companies get a major part of the profits in the industry while other companies are having a tough day，” says Wang Yanhui， secretary-general of China Alliance of Mobile Phones.
According to the latest data from China’s Ministry of Industry and Information Technologies （MIIT）， the Chinese mobile phone market is suffering from an unprecedented big slump. Through October 2014， the shipment of smartphones hit 312 million units， down 10.4% year on year. As the industrial experts analyze， the depression in the market won’t be changed in the year of 2015.
Vlad Martynov says that YotaPhone with the e-ink screen has got more than 20 international creative rewards. However， Chinese experts do not think highly of its outlook in this market. “The e-ink technology has been out for a long while and none of the Chinese mobile phone manufacturers have used it. Are they all blind？”
“I think any product can win a certain group of consumers. However， if a company wants to survive the intensively competitive market， they must be able to increase its sales volume to a certain level and win the general approval of consumers，” says the expert mentioned above.
In that case， the price and sales target of YotaPhone are very important. When present in a conference in China， Vlad Martynov said that the price of YotaPhone was to be the same with the other high-end Android smartphones. As for the sales volume， Martynov said that they really held a high expectation for the sales， but the concrete figure was confidential.
Martynov also said in the conference that YotaPhone2 would be launched in the Chinese market， which is only the initial exploration of YotaPhone in China. “In the first year in China， to earn profits is not the most important thing. What matters is that we could show consumers a new way of using the smartphone. If this （dual-screen） model can become a trend and favor of everyone， I do not think money-making would be a problem in the future.”
How the “Polar Bear”Fights in China
In front of the Chinese media， Vlad Martynov revealed two “grand events”concerning the future of YotaPhone. Apart from the start of sale in the first quarter of 2015， the other thing is the closed cooperation between YotaPhone and JD.com. This means that the key of YotaPhone’s development in China is in the hand of the ecommerce dealers. Ecommerce has helped many smartphone brands settle down and rise in China. Chinese domestic brand Xiaomi is one of them. The experts attribute Xiaomi’s success in the highly competitive mobile phone market to two points： the wave of replacing functional mobile phones with smartphones and the rise of ecommerce.
Vlad Martynov was not ashamed to admit that YotaPhone was going to learn from Xiaomi. “I made careful studies into Xiaoxi’s success and the Chinese market. I have got some ideas， which we already used in our business in Russia and Europe.” He holds high expectations over the ecommerce of China. “In that field， China is doing better than the U.S. and Europe.”
In addition， Vlad Martynov tells the journalist that Yota Devices is going to reach cooperation with telecom operators in China. “We are not only thinking. We actually have begun to negotiate with operators in China. Since there are no contracts signed， I cannot tell much about the details.”
In what form the YotaPhone is to be sold in China depends on the negotiations between it and ecommerce dealers， operators and agents. “If we have the access to the big online channels， we can arrange our sales online. If we are able to cooperate with some agents， we can do our business both online and offline.”
In addition， in order to lower the cost， Vlad Martynov is going to manufacture all YotaPhone2 units in China. Yota Devices has built the partnership with two OEM in Tianjin and Suzhou. And several Chinese content suppliers and APP developers have pledged their products to this Russian brand. They are going to provide special tools for the e-ink screen.
Like many hi-tech companies in the world， Yota Devices also craves the opportunities brought by the 4G technologies in China. In spite of the already saturated market， the Chinese smartphone industry is still able to be driven by the wave of replacing 3G with 4G.
The statistical data from the MIIT reveals the drastic increase in the sales volume of 4G smartphones. Now， six out of the ten mobile phones sold in China are 4G compatible. As the industrial experts forecast， the sales volume of 4G smartphones is going to increase from 90 million to 250 million units.
However， other smartphone manufacturers have already foreseen the opportunities there. These far-sighted device makers already began to launch the 4G phone even before the initiation of 4G service in China. It is certain that when YotaPhone was launched in China， the other brands’ 4G smartphones are to be sold in the market in a large quantity. For YotaPhone which needs 8-14 months to update its product， the test is difficult and posing a great challenge.
In Wang Yanhui’s opinion， YotaPhone should get into the Chinese market earlier. One year later than the beginning of replacing 3G with 4G will result in the miss of the opportunity.“In the first half of 2014， Coolpad developed very fast in the 4G market， but there were a lot of new brands coming out in the second half of this year， leading to the dramatic increase in the inventory of Coolpad which has also felt the stress.”
All in all， it seems that the “dual screen” is the only resort for YotaPhone to win the market.
People that paid close attention to China or the APEC might know the Russian mobile phone brand YotaPhone， which was sent to Chinese President Xi Jinping by Russian President Vladimir Putin as a gift during the meeting.
After a high-profile debut in China， YotaPhone has been confirmed to be available for Chinese consumers in the first quarter of next year.
However， it seems the worst time for YotaPhone to come to China as the Chinese smartphone market has already waved goodbye to the era of high- speed growth and the competition here is utmost intense.
But there are not only woes waiting for YotaPhone. China is now in the age of updating 3G to 4G， which is bringing the new brands and enterprises in this market， including YotaPhone， new opportunities. Now， everyone is looking at YotaPhone， which is a total stranger to the Chinese market. Can it get used to the environment here？
Not Yearning for Profits in the First Year
The Russian smartphone brands， which are far from the market leaders in the world， remained unknown in the Chinese market before the APEC.
Yota Devices is only a young company which was founded three years ago. YotaPhone1， the first product of this company， was only able to be produced massively at the end of 2013. However， YotaPhone did not come to the market in a low profile. In 2013 it entered the markets of Russia， Europe and Middle East – 15 countries/ regions in total. According to its plan， YotaPhone is going to get into around 20 countries/regions in the world at the end of 2014.
“I do not know what Mr. Putin has been through before making such a decision，” says Vlad Martynov， CEO of Yota Devices. But he confirmed to the Chinese journalists that Yota Device never made such a request to President Putin. As Vlad Martynov analyzed， Putin might want to deliver a message that Russia has been in a completely new area and the high-tech consumer prod- ucts will initiate the cooperation with China’s ecommerce dealers.
The director of China’s B2C website JD.com has confirmed the cooperation between JD and Yota Devices. “JD kept in close touch with Yota Devices. We are very willing to introduce YotaPhone into China and help it get good performance in this market.”
In Vlad Martynov’s opinion， the core competitiveness and the creative point of YotaPhone is with its “second screen” which happened to be an e-ink screen. In the other word， YotaPhone is a smartphone and also a Internet-accessible e-book after being turned over. In spite of this innovation， YotaPhone is still facing great challenges in China. “The mobile phone market in China has been obviously divided into two sectors – several big companies get a major part of the profits in the industry while other companies are having a tough day，” says Wang Yanhui， secretary-general of China Alliance of Mobile Phones.
According to the latest data from China’s Ministry of Industry and Information Technologies （MIIT）， the Chinese mobile phone market is suffering from an unprecedented big slump. Through October 2014， the shipment of smartphones hit 312 million units， down 10.4% year on year. As the industrial experts analyze， the depression in the market won’t be changed in the year of 2015.
Vlad Martynov says that YotaPhone with the e-ink screen has got more than 20 international creative rewards. However， Chinese experts do not think highly of its outlook in this market. “The e-ink technology has been out for a long while and none of the Chinese mobile phone manufacturers have used it. Are they all blind？”
“I think any product can win a certain group of consumers. However， if a company wants to survive the intensively competitive market， they must be able to increase its sales volume to a certain level and win the general approval of consumers，” says the expert mentioned above.
In that case， the price and sales target of YotaPhone are very important. When present in a conference in China， Vlad Martynov said that the price of YotaPhone was to be the same with the other high-end Android smartphones. As for the sales volume， Martynov said that they really held a high expectation for the sales， but the concrete figure was confidential.
Martynov also said in the conference that YotaPhone2 would be launched in the Chinese market， which is only the initial exploration of YotaPhone in China. “In the first year in China， to earn profits is not the most important thing. What matters is that we could show consumers a new way of using the smartphone. If this （dual-screen） model can become a trend and favor of everyone， I do not think money-making would be a problem in the future.”
How the “Polar Bear”Fights in China
In front of the Chinese media， Vlad Martynov revealed two “grand events”concerning the future of YotaPhone. Apart from the start of sale in the first quarter of 2015， the other thing is the closed cooperation between YotaPhone and JD.com. This means that the key of YotaPhone’s development in China is in the hand of the ecommerce dealers. Ecommerce has helped many smartphone brands settle down and rise in China. Chinese domestic brand Xiaomi is one of them. The experts attribute Xiaomi’s success in the highly competitive mobile phone market to two points： the wave of replacing functional mobile phones with smartphones and the rise of ecommerce.
Vlad Martynov was not ashamed to admit that YotaPhone was going to learn from Xiaomi. “I made careful studies into Xiaoxi’s success and the Chinese market. I have got some ideas， which we already used in our business in Russia and Europe.” He holds high expectations over the ecommerce of China. “In that field， China is doing better than the U.S. and Europe.”
In addition， Vlad Martynov tells the journalist that Yota Devices is going to reach cooperation with telecom operators in China. “We are not only thinking. We actually have begun to negotiate with operators in China. Since there are no contracts signed， I cannot tell much about the details.”
In what form the YotaPhone is to be sold in China depends on the negotiations between it and ecommerce dealers， operators and agents. “If we have the access to the big online channels， we can arrange our sales online. If we are able to cooperate with some agents， we can do our business both online and offline.”
In addition， in order to lower the cost， Vlad Martynov is going to manufacture all YotaPhone2 units in China. Yota Devices has built the partnership with two OEM in Tianjin and Suzhou. And several Chinese content suppliers and APP developers have pledged their products to this Russian brand. They are going to provide special tools for the e-ink screen.
Like many hi-tech companies in the world， Yota Devices also craves the opportunities brought by the 4G technologies in China. In spite of the already saturated market， the Chinese smartphone industry is still able to be driven by the wave of replacing 3G with 4G.
The statistical data from the MIIT reveals the drastic increase in the sales volume of 4G smartphones. Now， six out of the ten mobile phones sold in China are 4G compatible. As the industrial experts forecast， the sales volume of 4G smartphones is going to increase from 90 million to 250 million units.
However， other smartphone manufacturers have already foreseen the opportunities there. These far-sighted device makers already began to launch the 4G phone even before the initiation of 4G service in China. It is certain that when YotaPhone was launched in China， the other brands’ 4G smartphones are to be sold in the market in a large quantity. For YotaPhone which needs 8-14 months to update its product， the test is difficult and posing a great challenge.
In Wang Yanhui’s opinion， YotaPhone should get into the Chinese market earlier. One year later than the beginning of replacing 3G with 4G will result in the miss of the opportunity.“In the first half of 2014， Coolpad developed very fast in the 4G market， but there were a lot of new brands coming out in the second half of this year， leading to the dramatic increase in the inventory of Coolpad which has also felt the stress.”
All in all， it seems that the “dual screen” is the only resort for YotaPhone to win the market.