Trying to fuel the market during the January 2004 Chinese Lunar New Year, branded mobile phone vendors, operators, and channel players focused on handsets with color display and attachment camera, while carrying over low price promotion strategies from the fourth quarter of 2003 or bundling with service to stimulate handset replacement demand. With heavy promotions by mobile phone players, shipment share of color display handset grew 2.5-fold year on year and 15% sequentially to reach 67% of total shipments in the first quarter of 2004. Shipment share of attachment camera phones was approximately 35%, growing 3.5-fold year on year and 20% sequentially.

In the first quarter of 2004, market share of Taiwanese branded makers expanded to nearly 30%; Korean brand-name players grew above 10%, while US and European vendors dropped below 50%. Changes in market share were due to a combination of factors. Taiwanese makers benefit from home market advantages, as well as more flexible price strategies compared to international brand name vendors. Korean players Samsung and LG have increased value-line and mid-range offerings to cover a greater share of the market. Furthermore, second and third-tier Korean makers Innostream and Toplux rolled out high-end phones with superior price-performance ratios, cleaving themselves a niche in the market.

One reason for the decline in US and European vendors' market share was a result of scantier product line of Siemens, Sagem, and Alcatel, coupled with lengthy time-to-market of new mobile phones. However,  Motorola continues to introduce a wide variety of new models and flexible price strategies to retain market leadership; Sony Ericsson adopts a smaller selection of models to hone in on the mid-range and high-end market; Nokia has tuned its channel strategy, gradually strengthening cooperation with Arcoa and Aurora.

In the second quarter of 2004 mobile phone vendors will persist in rolling out new offerings, but without a major breakthrough in functionality or services, the impact on volume will be limited. Volume is expected to reach 1.4 million units, demonstrating little growth from the same period in 2003. As mobile phone players continue to compete on price, a sustained decline in prices of color display models will force monochromatic phones from the market. Color handsets are thus expected to have full reign over the market once inventories of monochromatic models such as the Nokia 2100, Motorola's V66, and Sony Ericsson's T100 are cleared.