BEIJING - Apple's iPad may have met its first serious Chinese challenger in the tablet PC market in China: Beijing ErenEben Information Technology Co
Chief operating officer, Beijing ErenEben
The Chinese "dark horse" sells portable wireless products like the iPad in China, and their sales performance is almost on par with the iPad in the Chinese mainland now.
Established in 2009, Beijing ErenEben (which roughly translates to "everybody gets one") is very different from Chinese iPad copycat makers. Beijing ErenEben built its own tablet PC research and development (R&D) team in 2004, and launched its first portable PC on Jan 7 this year - three months before iPad launched in the United States.
At the beginning of this year, Beijing ErenEben only had a few stores in China. Now, the company has over 300 authorized dealers and sold over 40,000 of their first-generation products.
Now, the firm has already received 50,000 pre-orders for its second-generation tablet PC before it is even launched. "Our aim is open 1,200 (IT) boutiques by the end of this year, and top 200,000 (unit) sales," said Jiang Yufei, chief executive officer of the company.
Late last month, Legend Capital Limited and Tuspark Venture Capital Management (Beijing) Inc invested an undisclosed amount into Beijing ErenEben.
This is the second injection of funds by Legend Capital within the year, pushing total investments by all VCs to 56 million yuan ($8.25 million).
The aim of the investment is to support the company in maintaining its market lead and help it to quickly enhance its technological advantages.
According to an analysis made by Zero2IPO, a service provider in the China venture capital and private equity industry, the company occupies about 80 percent of the market share among Chinese tablet PC producers.
"We have to thank Apple for launching its iPad, because the iPad helped Chinese customers accept the concept of the tablet PC. And after the iPad heated up the market, our sales have increased rapidly," said Jiang.
But the Chinese company's target customer is very different from Apple's.
"We are aiming for Chinese business people over the age of 35, while most of Apple's customers are young people," said Jiang.
So the functions of Beijing ErenEben products are designed for business usage. The core innovation of their products is a technology called "Mind Mark". It's a handwriting technology that let's users have a writing experience similar to writing on paper, by using the electronic touch screen and a touch pen.
"Most Chinese business people and government officials cannot get used to using their fingers or a virtual keyboard to type, so we invented a function where users can use their own writing style, which is easier for them to write in their own handwriting, even via e-mail," said Fang Liyong, chief operating officer of the company.
Store locations are also a consideration for Beijing ErenEben's target market. The company did not put much focus on the gray market or electronics' bazaars like Zhongguancun, famous for its cheap prices and chaotic environment. Instead, Beijing ErenEben chose high-end shopping malls for its franchised stores, catering to the tastes of China's business elite. Priced at 3,980 yuan ($590), it has a competitive advantage over the iPad in the Chinese market. An iPad with similar functions (WiFi and 3G) costs about 6,000 yuan in China's gray market.
"Price is the biggest advantage for ErenEben compare with the iPad," said Yu Bin, an analyst from Dratio, a Chinese research firm.
Customized service is another difference between Apple and the Chinese company.
"We can print the customer's company name on our case and even help them to change the screen background picture to their CEO's face," said Fang from Beijing ErenEben.
"Now the company occupies most of the market share for the domestic tablet PC market, but when PC manufacturers rush into this market, Beijing ErenEben will face more fierce competition later on," said Yu from Dratio.
The tablet PC maker may need to take a more detailed look at its target market, suggested Zhang Yanan, analyst from Zero2IPO. Beijing ErenEben "needs to do more research on the market and their (target) customer before they take the next step, as the 35-plus-age group of business people is still too big."