China set for mobile entertainment explosion

The Chinese market is set for a mobile entertainment explosion, according to a new report from JBB Research, which predicts revenues will hit $18 billion by 2013 driven by increased 3G and 4G use, mobile application stores and more advanced smartphones.
In its report, “The State of the Chinese Mobile Entertainment Market: Taking Advantage of the 3G, Mobile App stores, and Smartphones Revolution,” JBB said it expects mobile advertising, location-based services, mobile payments and mobile television and video services will drive revenue growth in China over the next three years and push mobile entertainment revenues from $6.5 billion in 2008 to $18 billion by 2013. Also helping to propel revenue growth is an expected doubling of mobile entertainment subscribers in the world’s largest wireless market.
“As competition around mobile applications stores starts to head up in 2010, we expect Chinese carriers to heavily promote their own mobile application stores to increase customer retention and capture a larger share of this growing business,” said Julien Blin, principal analyst and CEO of JBB Research. “For mobile app store providers like Apple and others, focusing more on developing Chinese-language mobile apps will be critical in order to help them drive the popularity of their mobile app store.”
Despite the expectations for strong growth, JBB warned that the Chinese market still has hurdles to face. Those include the current small penetration of 3G services and smartphones, a large proportion of low-income customers, handset limitations for many feature phones, high costs for both mobile data services and corresponding handsets, competition from free Wi-Fi and content. JBB also pointed out that the country’s stringent censorship rules and general level of fraud and corruption could limit growth of mobile entertainment services.