uninterrupted relations: When a consumer buys a mobile phone, it’s just the beginning of a series of purchases. Therefore, network operators are hoping to increase the number of users by lowering the threshold through cheaper prices or leases.

“A combination of TV and telecom can not only enhance our uninterrupted businesses, but also increase the number of Telecom users through the platform of TV,” Zhao said.

Vying for the market

CCID Consulting Co. Ltd. forecasts that Chinese users of Internet Protocol Television (IPTV) may show an increase from less than 50,000 in 2004 to nearly 300,000 in 2005. In the next five years, Chinese IPTV users may double and China may become the largest market of 3C products.

Industry watchers say that IT and home appliance manufacturers will contend for their share of the 3C market. So far, the fast-growing 3C market is promising to provide big opportunities for operators, content providers and equipment makers. But not everyone will be able to get in on the action.

Home appliance makers TCL, Haier and Hisense were the earliest in starting a strategic transition to 3C. However, they failed in the immature 3C market. Their predicament was concealed by their achievements in the area of traditional home appliances.

While Changhong cooperated with China Telecom in 2005, announcing its transition from traditional TV maker to 3C producer, another Chinese TV giant, Skyworth, is also making an approach.

Meanwhile, in the area of communications, mobile phone makers have announced that they are fully prepared for the transition to 3C. Down the industrial chain, distributors such as Gome and Suning are trying to diversify their commodities by adding 3C products.

At an electronics expo held in late 2005, Amoi, a new force of 3C, displayed its IPTV liquid crystal TVs, IPTV laptops and IPTV intelligence mobile phones. Changhong promoted its first 3C TV product, a kind of liquid crystal color TV that combined the functions of TV, computer screen and video phone.

While these products caught the attention of industry watchers and consumers at the expo, they were just for show and haven’t been put on the market.

In fact, to traditional home appliance makers, the transition to 3C isn’t as simple as combining three kinds of products.

Industry insiders say the advantages of domestic home appliance makers are only in scale production, as well as their potential in research and development (R&D) and the positioning of their brands. But they’re still lacking abilities in R&D of core technology in the upstream and in controlling the distribution channel downstream.

During the 3C transition of foreign enterprises such as Japan’s Panasonic and Sony, and South Korea’s Samsung and LG, they mainly depended on their core technology of home appliances, communication devices and computers. Through technological integration, their comprehensive competitiveness is raised.

If Chinese home appliance makers want to dominate the 3C era, if and when it catches on, improving the R&D of core technology is key.