Phone-makers collaborate on a file-transfer system
In an interesting move, three of China’s largest smartphone makers and ferocious rivals, Xiaomi, Oppo and Vivo, announced they’re working together to develop a file-sharing system. The feature uses Bluetooth rather than cellular networks, saving users some data charges. It will be available on phones running MIUI, ColorOS or FuntouchOS software.
This peer-to-peer transfer system appears to be similar to Apple’s AirDrop, which was introduced in 2011 and is now very popular among Apple device owners, mainly thanks to its ease of use, speed and convenience.
Within the Android ecosystem, Google introduced its own file-sharing tool, called Android Beam, based on NFC and Wi-Fi in 2011, but this hasn’t gained much traction. Google plans to remove it from its next version of Android, and to replace it with a new “Fast Share” feature. However, Google services aren’t available in China, so users there will not have access to this improved technology.
This is certainly a justification for Xiaomi, Oppo and Vivo to create a home-grown file-sharing system. Collectively, these players accounted for about half of the Chinese smartphone market in the second quarter of 2019. This means that hundreds of millions of Chinese users could potentially benefit from this new service. The protocol will be available at the end of August 2019, and the alliance is open to other manufacturers.
This somewhat unexpected move by three fierce competitors highlights two implications.
Firstly, Xiaomi, Oppo and Vivo are clearly pressed by Huawei in their home market of China. Huawei’s current troubles mean it is even more reliant on domestic sales, so it must continue to build share on its home turf. So far, this is happening mostly at the expense of international rivals, but its Chinese competitors are feeling the crunch, too. Making the competitive situation even more difficult, the Chinese smartphone market has been stagnant for the past few quarters. The imminent launch of 5G networks are expected to deliver a boost to the market, but competition will only intensify, as all players are eagerly waiting for the dawn of these next-generation networks. So, Xiaomi, Oppo and Vivo have chosen to cooperate to build differentiation against its largest rival.
Secondly, this move highlights the growing chasm between Chinese and Western people in how they use technology in everyday life — something that CCS Insight predicted at our Predictions event in 2018. Some of that rift is down to differences in lifestyle: Chinese consumers use smartphones for shopping, payments and online-to-offline services much more than people in the West. They also predominantly use services from Tencent, Alibaba, Baidu and other Chinese Internet players, partly because these are optimized for the Chinese market, and partly because the Western alternatives from Google, Facebook and others aren’t available in China. However, the growing wave of tech nationalism, aggravated by trade wars, is playing its role, too.
CCS Insight’s Predictions for 2020 and Beyond event will be held on 3 October 2019 in London. Find more information here.
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