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Report: One-third of China handset makers to disappear

Posted by inet - 2005-11-20

MANHASSET, N.Y. — Thirty percent of China's handset makers will be gone by the end of 2006 due to the segmentation and centralization of China's handset market, according to a report by Analysys International.

In its Quarterly Tracker on Handset Market 2005-Q3, the firm said increasingly fierce competition in China's handset market had reduced the competitive advantages of domestic handset makers and resulted in decreased market share.

The data shows that the total market size had increased steadily by 3.25 percent to reach 19.38 million sets. The decreased market share of domestic vendors stems mainly from the declining share of GSM vendors, while market shares of CDMA handsets had still increased 2.3 percent.

''The improvement in performance of domestic CDMA handset makers mainly comes from the fact that China Unicom had increased its centralized purchase power," said Zhao Yuewang, an analyst with Analysys International. "This takeover of the sale function has helped the domestic makers to put the expenses saved into R&D and production and therefore promoted its strength and the competitiveness of the products. Moreover, handset customization had helped those new vendors to stand at the same start line with traditional makers."

Yuewang expects that as the centralization of the handset market increases, many makers will disappear.

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