Phonemakers lose market share to grey market devices from China
Published: 5 November, 2009
READ MORE: Metrics | China | Huawei Technologies | Handset | Android
It is no surprise that the Chinese appetite for smartphones is increasing, as average wealth rises and 3G gets built out. But while this is a key opportunity for global vendors, they will be harder hit by the huge boom in China's own handset production. Huawei and ZTE are both moving up the handset food chain into midrange smartphones, but of real concern is the rise of the grey market Chinese manufacturer, whose units will account for 13% of the world's phone business this year, according to researchers at iSuppli.
Within China, uptake of smartphones will triple between 2008 and 2013, according to In-Stat, with high end models already accounting for 15% of the country's cellphone purchases last year. Although the better branded domestic vendors are gaining some ground in their home country, especially through close collaborations with the operators on 3G roll-outs, the balance of benefit from smartphone growth is still expected to go to the international brands, which are much coveted in China (Nokia being by far the strongest, but with Motorola planning eight Android phones for the country in 2010, Apple just launched, and Samsung and Sharp also aggressive). In 2008, Symbian and Nokia gained some share and "a free and complete smartphone software platform from OHA (Android) and the Symbian Foundation will fuel smartphone market growth in the coming years".
The story is very different when companies look at the impact of Chinese vendors abroad. Huawei, in particular, is starting to gain position in the midrange, signing deals with carriers like Vodafone and introducing the first Android phone geared to prepaid deals, the Pulse (carried by T-Mobile in Europe). Less well known Chinese names like
Haier and Beyond Radio Technology have also announced Android phones headed for Europe, some of which will be white labelled by operators.
But the established brands still have many advantages over Huawei and the others in terms of brand recognition, carrier relationships and design expertise. More worrying is the growth of the challenge from grey market phones emanating from China. Grey market handset shipments from the country are set to grow to 145m units in 2009, or 13% of the size of legitimate global cellphone business, with two-thirds of the models finding their way outside China, eating into legitimate market share round the world.
According to iSuppli, grey shipments this year are set to be up by almost 44% on 2008 and quadrupled since 2005, as cellphone demand rises worldwide and consumers seek higher end devices at low cost. By contrast, worldwide shipments of legitimate mobile phones are likely to fall by about 8% this year compared to 2008. By 2013, the Chinese grey market could reach 176m, representing CAGR of 11.7% from 2008, and contrasting with CAGR of 4.4% in the mainstream market. However, the 2013 figure will be down from a 2012 grey peak of 192m units.
Pages: 1 | 2
More METRICS News
More CHINA News
More HUAWEI TECHNOLOGIES News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
