It is a remarkable year for the mobile phone industry in 2007 -
Nokia continues to be market leader, the launch of the
revolutionary iPhone and Google's planned new mobile system.
In China, curbs on handset manufacturers have been relaxed and
market share of home-grown firms has rebounded in the third
quarter.
What's in store for the industry in 2008?
In the domestic market, the sales volume of mobile phone has
reached 37.43 million units in the third quarter, a growth of 7.4
percent over the last quarter. Nokia led the market with 35.1
percent followed by Motorola with 13.6 percent and Samsung at 11.6
percent, according to Analysys International, a Beijing-based IT
consulting firm.
The ultra-low end segment of the phone market where handsets
cost less than US$40 each will grow rapidly, the firm said.
Rapid penetration of mobile phones in highly populated emerging
markets is supporting the explosive growth in the ultra-low end
handset market. The Asia-Pacific, central and eastern Europe,
central and Latin America are the main markets for ultra-low end
handsets. Handset companies cannot afford to ignore this
spectacular growth, especially at a time when expansion in
developed countries is tapering off, Merrill Lynch said in a recent
report.
By the end of September, China's mobile phone penetration
reached 39.9 percent, half the level of Western countries,
according to the Ministry of Information Industry.
But the low-end models will be integrated with more
sophisticated functions like multimedia, thanks to the development
of the semiconductor industry.
"Our market share in China is several percentage points higher
than the global level as demand surges for low-cost single-chip
products LoCosto and eCosto," said Xie Bing, Texas Instruments'
China president.
TI expects its under-US$20 chipset for multimedia mobile phones
to have great potential in China, Xie said.
On the other hand, the premium (above US$300) and high-end
(US$191-US$299) handset segments are also steadily increasing,
Merrill Lynch said in a note.
"The handset industry is seeing a polarization of the low-end
and high-end segments," the US-based investment bank said.
Digital convergence seems to be fueling growth in the market
segment which combines multiple functions into one cell phone, such
as Sony Ericsson Walkman Phone and Cybershot Phone (camera phone),
while Apple's iPhone is regarded as the best invention of 2007 by
Time magazine.
Other popular features include large high-definition screen,
mobile payment and mobile TV in China, according to Beijing-based
CCID Consulting, a research firm under the MII.
Co-branding between a luxury goods maker and a cell phone
manufacturer will also be another potential area to tap. Examples
of such alliances are LG's Prada phone and Samsung's tieup with
Giorgio Armani.
Handsets will also become "smarter", thanks to the operating
system, which runs the phone, and new software.
Nokia has adopted the Symbian-based OS which is by far the
most-used system for mobile phones today. The Symbian is expected
to be challenged by the evolution of lower-volume systems like
BlackBerry's system, iPhone's Mac OS, Windows Mobile and Google's
Android, which will be available in the second half of 2008.
Smart phone sales have accounted for one percent of all sales in
China in the third quarter and are expected to grow significantly
when 3G, or third generation, is available, according to CCID.
"Software companies are trying to attract end-users with their
user-friendly and well-known software applications. For example,
Apple's iPhone emphasizes its compatibility with iTunes," Merrill
Lynch said.
Google, though without a wireless platform now, has also begun a
mobile search service in China to test the water.
Global positioning system-equipped phones are another fledging
market segment to explore.
(Shanghai Daily November 23, 2007)
