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iSuppli: China mobile handset shipments to reduce

Posted: 12 Feb 2008     Print Version  Bookmark and Share

Keywords:mobile handset shipments  GPS  mobile TV  TD-SCDMA 

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Mobile handset shipments from manufacturers headquartered in China grew dramatically in 2007, reaching 22.9 crore units, a 76.2 per cent growth from 13 crore in 2006. However, this rate of growth will slow this year by 19.7 per cent, dropping to 27.4 crore units, reports iSuppli Corp.

"There were two major drivers for the fast growth in China's handset industry during 2007," said Kevin Wang, senior analyst, China research for iSuppli. "One was the continuous increase in domestic demand from first-time buyers and the replacement market. The other factor was the significant increase in export shipments from China handset manufacturers. Domestic OEMs, such as Huawei and ZTE, doubled their export shipments. Moreover, domestic gray market suppliers shipped millions of handsets to developing countries."

In 2007, the domestic China handset market totaled about 20 crore units—consisting of 15 crore licensed handset units and about 5 crore gray-market handsets.

Limited new features
Sustained increases in CPI, rising housing prices and major stock market fluctuations in China are expected to hurt consumer confidence this year. Except for handsets supporting GPS and mobile TV functionality, there are no popular new handset features to drive new sales, said iSuppli. Due to higher ASPs, iSuppli expects that GPS and mobile TV equipped phones will remain niche consumer products for now. Consequently, the replacement market will experience very limited growth during 2008, restraining increases in shipments in 2008.

However, iSuppli anticipates that sales of handsets supporting TD-SCDMA and Edge will ramp up quickly in 2008 as they become more widely available.

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