Chinese people does not have the benefit of using 26 letters for all words, that's where the IME fill the blank. For years, PinYin is the most popular method to input Chinese because it follows the pronunciation word instead of the character structure(Believe me, those Chinese characters are COMPLEX). Google isn't doing so well in China because Baidu, No.7 most high traffic site in the world ranked by Alexa, have more market share according to this report in Search Engine Journal. The release of it's Google Chinese PinYin IME already caused over 1.5 million download in 2 days, even I got a piece of the treat.

In my opinion Google could slowly gain the market back by this product, at least it have a amazing feature of store the common phrase you type in the Google server so you can syndicate with your Google IME.
BTW I got featured in Getthemlaid.com