International vendor share of Chinese mobile phone industry shipments decreased from 55.9% in the third quarter of 2003 to 49.9% in the fourth quarter, while share shipped by Taiwanese makers and Chinese makers respectively rose from 15.3% and 28.8% to 19.5% and 30.6%. Second tier makers such as Soutec, ZTE, Haier, CEC, Lenovo, and Daxian, taking advantage of the channel inventories that impacted first tier makers, saw a dramatic climb in shipment scale, enabling Chinese industry volume to grow 27.7% sequentially. Taiwanese maker shipment volume saw a considerable sequential rise of 52.9% due to steady contract awards and a build up of production in China. International vendors, despite a slight decline in Chinese mobile phone market share, experienced a 7.4% sequential gain due to the record high in global handset shipments in the fourth quarter of 2003.

Over the course of 2003, despite inventory problems and the SARS (Severe Acute Respiratory Syndrome) epidemic seen in China during the first half of 2003, the combination of seasonal factors in the second half and expanding PAS (Personal Access Phone System) mobile phone shipments inspired 70.9% annual growth in volume. Chinese mobile phone industry shipment volume reached 203 million units in 2003.

In 2004, with the handset replacement trend in the global mobile phone market and heavier investment by both Japanese and Korean vendors in the Chinese market, international vendors are anticipated to gradually hold a more stable position in the Chinese mobile phone industry. However, the intense state of competition among Chinese players is expected to endure over the short term as droves of new entrants continually clamor in and close relationships between some Chinese makers and government entities persist.