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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4147)	1/12/2005 7:00:03 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Mainland China handset brands lose ground to overseas competitors Posted : January 13, 2005 China (mainland) – Unprecedented growth in the local mobile phone sector in 2003 was followed by a drop in market share in 2004. At the peak of market performance in 2003, domestic brands commanded 55 percent of the country's mobile phone market. However, this share started dropping slightly since the beginning of 2004, eventually settling at 48.7 percent in September 2004. Estimates place further slides to close the year at with a 41 percent drop rate compared to 2003. China Customs statistics show that local brands account for only 2.7 percent of the country's total handset exports. Entry into the WTO forces the mainland to lift all customs tariffs on major electronic information products such as mobile phones by Q1 2005, which could further push down the market share of local brands. Mainland China mobile phone makers formerly had the advantage of established sales channels, appealing handset designs and price. However, deeper market penetration has allowed overseas brands to attain the same plus factors. In addition, although makers had access to readily available technology from foreign manufacturers, the 3G era could force out suppliers with weak R&D capability. An ensuing market shakeout could mean mobile phone makers with only manufacturing to their credit would fold, and only those with strong technical development capability will stand against the onslaught of overseas competition. Despite the changes, some large mobile phone makers are optimistic about the local market's future. Many local brands are catching up with foreign mobile phone makers. Konka Group set up a $6 million research institute in early 2004, and will invest $12 million in 2005 for 3G development. Konka's investments are indicative of local makers' resolve to stay in the game, companies said. According to IC Insight, another local mobile phone manufacturer, Bird, managed to rank eighth among the world's top mobile phone brands. The company's exports rose 600 percent in Q1 to Q3 2004. telecom.globalsources.com