China's Mobile Phone Shipments Slow
In 1H08, But Vendors Remain Confident September 18, 2008
CCID Consulting projects
mobile phone shipments for 2008 to be 165 million, as the Chinese consumer
is holding back and waiting for more revolutionary new features enabled by
China's upcoming 3G networks. While CCID Consulting projects shipments to
exceed 2007, growth rate will continue to slow.
Source: CCID Consulting, July 2008
In 1H 2008, sales have not
peaked as in previous years. From a quarter-by-quarter perspective in
1H2008, 1Q was stronger, as 2Q was plagued by the May Sichuan earthquake and
cancellation of the national May holiday. Usual promotional activities
around such holidays have been muted.
Source: CCID Consulting, July 2008
Competition intense, but
mobile phone vendors remain confident.
In 1H08, Nokia had the
largest mobile phone shipment share in China, followed by Samsung and
Motorola. The remaining top ten vendors included Tianyu, Lenovo, Sony
Ericsson, Amoi, LG, Bird, and Gionee.
All vendors struggled
somewhat given the decline in overall mobile phone growth rate. Nokia
reported its 2Q08 Greater China mobile phone shipments declined by 16.2%
over 1Q. While Sony Ericsson reported increases in shipments, net profits
However, there were a few
1H08 highlights by Chinese domestic vendors. TIANYU K-Touch, Gionee, Guohong,
BBK, EY, and other emerging domestic vendors performed satisfactorily.
TIANYU K-Touch and Gionee have stayed in the top ten with good product
positioning, channel development, and market promotions. Chinese domestic
vendors have done well in general with good channel management, addressing
channel partner and retailer profit concerns.
Despite severe competition
in China's mobile phone market, Chinese vendors remained confident in light
of the upcoming 3G development. Lenovo, Amoi, and others have cross-over
strategies from their PC business to mobile phones. TCL, Haier, ZTE, and
Huawei have strengthened their overseas market development. Tianyu K-Touch,
Gionee, Guohong, BBK, and other emerging vendors have begun focused on
building their brands. China's mobile phone market will be even more
competitive with the advent of 3G.
More functionality and
more applications are the focus; Open operating platforms the enabler.
So far in 2008, more and
more mobile phones in China have features such as electronic wallet, WiFi,
Push-mail, digital TV, PTT, GPS navigation, information security, and NFC/RFID.
What used to be high-end
features are increasingly moving down the consumer product line. Integrated
camera, music playback, and Bluetooth have become standard features. CCID
Consulting expects more advanced functionalities in the future, such as
digital TV, mobile payment, GPS navigation, PTT, and wireless Internet to be
more prevalent in China.
The Chinese consumer is
getting smarter, and demanding more. As a result, mobile phone vendors are
increasingly focused on more open platforms and applications. Apple's iPhone
led the way with a platform encouraging new and innovative applications,
further intensifying customer loyalty, and connecting the customer with
content. This will be further fueled by increasing popularity of the mobile
network and Internet.
Other vendors are following
suit with open operating systems, such as Google, HP, Dell, and Microsoft.
In June 2008, Nokia announced its intention of integrating Symbian, S60, UIQ,
and MOAP into an open mobile phone operating system. CCID Consulting
believes that Nokia's action will unlock the closed smart phone operating
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Unless otherwise specified,
all information provided is sourced from CCID Consulting.