According to Taiwan's MIC (Market Intelligence & Consulting Institute), an ICT industry research institute based in Taipei, the Chinese Smartphone market volume reached around 180.0 million units in 2012. Driven by the popularization of Smartphones and subsidies of telecom operators, the market volume is estimated to hit approximately 280.0 million units in 2013. According to the estimates of China's three major telecom operators, the combined mobile phone user base topped over 1.0 billion, 700 million of which were China Mobile's users, constituting over 60% of market share, followed by China Unicom's 20%.
MIC estimates that Smartphones priced around 1,000 RMB (US$161.3; US$1=6.2 RMB) are becoming best-selling products in China. In 2012, the share of Smartphones priced less than 1,000 RMB (US$161.3) reached around 24%. The share is projected to hit around 30% in 2013. Taking China Unicom as an example, some of its WCDMA (Wideband Code Division Multiple Access) Smartphones have priced less than 500 RMB (US$80.6), thereby significantly lowering the purchase barriers for consumers. Meanwhile, with chipmakers continue to put forth low-cost and highly integrated mobile platforms, the price competition in the Smartphone market is expected to become increasingly intensified in 2013.
Looking at the Smartphone IC market, Qualcomm continues to lead the market. Meanwhile, the MediaTek MT6573 solution has helped the company regain its market foothold while Chinese chipmaker Spreadtrum has a similar solution to compete against MediaTek. It is predicated that as the Chinese Smartphone market grows rapidly, the Smartphone IC market will become rather competitive as well.
Of total mobile phone user base in China, nearly 80% are still 2G users. Nevertheless, the 3G user base grew fast in 2012 to around 233.0 million users at year-end 2012, up from around 128.0 million users at year-end 2011. As of year-end 2012, user adoption of 3G mobile services broke 20%, 37.7% of which were TD-SCDMA (Time Division-Synchronous CDMA) users, 32.8% were WCDMA users, and 29.6% were CDMA users. MIC observed that although China Mobile still has the most 2G users, the gap in user adoption of 3G among three major Chinese telecom operators is not as wide as that of 2G. Therefore, the competition in 3G is rather intense.
After pouring a massive amount of resources to construct 3G networks, three major Chinese telecom operators have been actively launching 3G products and corresponding mobile data services in order to increase revenues. Smartphones are envisaged as best means for delivering mobile data services and therefore telecom operators tend to place equal sign between 3G services and Smartphones during promotions. In the initial stage, Smartphones were classified as mid- to high-priced products. Nowadays, with Smartphone chipmakers delivering more total solutions and subsidies plans proposed by telecom operators, it is estimated that the prices of Smartphones will be reduced at a faster pace and the Chinese Smartphone market growth will appear promising in 2013, according to MIC.
More information can be found in the following MIC report: Chinese Mobile Phone Application IC Market Development, 1H 2013 and Beyond
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About MIC
Market Intelligence & Consulting Institute (MIC), based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry. https://mic.iii.org.tw/english