Abstract

Chinese makers such as TCL and Bird have been said to seek access to handset technology and international channels by working with international vendors such as Alcatel and Siemens. However, their attempts to power up shipment of GSM/GPRS (General Packet Radio Service) and CDMA mobile phones are expected to prove futile in the short term due to a combination of factors: Chinese makers are aggressively soliciting new low-frequency mobile phone users; their share in the domestic market already accounts for 50%; inventory pile-ups in distribution channels have not been cleared; a lack of technology experts and differences in preferred designs presents barriers to the international arena.

On the other hand, Korean and Taiwanese makers, which have been eyeing the Chinese market, are likely to strengthen their production network by means of acquisition and merger, joint ventures, or cooperation. In addition to low-frequency mobile phones, their efforts are expected to be another growth driver for the Chinese mobile phone industry.

Moreover, to gain more time for development of TD-SCDMA (Time Division Synchronous Code Division Multiple Access) offerings, the Chinese government has delayed issuing 3G (Third Generation) licenses. International vendors have thus been forced cutting prices of 3G infrastructure equipment. The Chinese government's move is aimed at not only sustaining momentum of low-frequency mobile phones, but also allows the less technologically formidable Chinese makers more room for growth. As a result, handset design houses, total solution providers, and EMS providers have formed a division of labor that is expected to push more growth and further enhance the R&D capabilities in the Chinese mobile phone industry. 

Appendix

Research Scope

This report covers major companies manufacturing mobile phones in China for the domestic market or export, including output from domestic makers, foreign direct invested entities, and joint ventures. Handset statistics include GSM, GPRS, CDMA, Smartphone, and PAS phones, where full system assembly is completed in China.

Definitions

Assembly Levels

Full System

Handsets that contain all components mounted on PCB (Printed Circuit Board) as well as complete assembly of peripheral components. Ready for immediate use after shipment to the customer.

SKD

PCB-mounted components and several other major components, such as battery and cover, are shipped disassembled to customer. The customer performs simple final assembly.

CKD

Components are shipped to customer. Customer performs surface mount and final assembly.

Glossary of Terms