Chinese Makers' Savvy Tailoring to Local Preferences to Spark 24% Volume Growth in 2002
December 17, 2002
- The Chinese mobile phone industry's shipment volume is expected to grow to 31.9 million units in the fourth quarter of 2002, up 16.2% from the third quarter as international vendors ramp up production for the peak retail season. Combined with the jump in shipments sparked by Chinese makers' aggressive launch of a wide variety of handsets, Market Intelligence Center (MIC) anticipates that 2002 shipments for the Chinese mobile phone industry will total 106.9 million units.
By contrast, in the third quarter of 2002 shipment volume virtually plateaued, slightly dropping by 0.2% from the second quarter to 27.48 million units. The industry failed to grow mainly due to the shrinking shipments of international vendors, which are facing slow growth in the worldwide handset market. International vendor shipments slid 11.6% from the second quarter down to approximately 19.1 million units.
Shipments of Chinese handset makers continued to expand, however, increasing over 40% from the second quarter to reach over 6.6 million units. "Chinese mobile phone makers have pooled their resources to engage in brand management and marketing, seizing the opportunities presented by domestic consumers' emphasis on industrial design and the local preference of clam-shell handsets," explained Sean Kao, Senior Industry Analyst with MIC.
Chinese mobile phone makers employ the product designs and knocked-down kits from Korean and Taiwanese makers, or redesign full system casings. Domestic makers have also offer high profit margins to distributors and retailers to spur sales. Chinese makers have subsequently increased market share to over 20% in the 1,500 RMB and above mid-range and high-end segments.
"Chinese makers are likely to continue boosting shipment volume in the short term, as many international vendors are not offering many clam-shell handsets," said Kao. "However, as the product specifications, positioning, and marketing strategies of these domestic makers are very similar, there will likely be constant displacement in the Chinese mobile phone industry's top ten ranking," Kao added.
According to MIC, the third quarter also saw the addition of Flextronics and Amoisonic to the Chinese mobile phone industry's top ten rankings. Flextronic's growth is mainly attributable to the continually increasing trend of outsourcing among international vendors. Domestic maker Amoisonic's considerable increase was owed the success of the clam-shell A6 and A8 launched with the support of Korean handset module provider Bellwave.
For more information on the Chinese mobile phone industry, please refer to the report "The Chinese Mobile Phone Industry, 3Q 2002 and Beyond."