Current Competition in China's Mobile Phone Design Industry Home Market is Tough and Price Wars Have Become Universal

Business Wire, Sept 12, 2005

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c24133) has announced the addition of China Mobile Phone Design Industry 2005 to their offering.

This report looks at the Chinese mobile phone design industry. It includes analysis of the industry environment, upstream and downstream supply chains, competition and cooperation, business models, working process, mobile phone design manufacturers, mobile phone brand manufacturers, chip suppliers, software design manufacturers, and OEM/ODM/EMS manufacturers. It analyzes in-depth mobile phone design technology, market status and trends in China, providing detailed information to those enterprises aiming to enter this industry.

Current competition in China's home market is tough, and the pricing war has become universal. As a matter of fact, a new mobile phone model can only keep its price for a few months before diving. Manufacturers have to release more and more new models for profits. A new model's release is always accompanied by the diving price of existed products. Some manufacturers only depend on introducing new models to gain profits. The R&D speed is left far behind the market desire, hardware configuration upgrade, mobile application development, etc. Therefore, a new object -- the mobile design company -- was born.

In order to save the development cost, Chinese indigenous manufacturers transferred their handset design orders to those indigenous companies. To make the mobile phones more familiar to Chinese customers, they started to buy out the domestic mobile phone design houses' design projects massively. During 2003-2004, Chinese mobile phone design houses achieved a prominent performance in China's home market.

As of the beginning of 2005, China already has about 60 mobile phone design houses.

Successive increasing mobile design houses lead to more specialization in the market. At present, there are mobile phone software development companies, mobile phone hardware design houses, mobile phone style design companies, handset structural design houses in the upstream. Mobile phone software companies include handset interface software, games, office and network software, multi-media software, and other application software development companies.

Since 2004, the growth of the Chinese home market has been slower than before. Indigenous brands' market share has been declining. This has caused many design houses' bad performance, even bankruptcy. The market trend is as follows:

Horizontal integration

1. Small and medium sized mobile design houses will merge with the
   big ones

2. Public companies become multinational mobile phone design houses

Vertical integration

1. Mobile phone design houses evolve to mobile ODMs

2. Mobile phone design houses evolve to handset vendors with their
   own brands

3. Chinese domestic design houses evolve to foreign mobile brands'
   Chinese R&D center

Companies mentioned:

TI, Freescale, Agere System, Philips, Infineon, Intel, ST, ADI, Renesas, Broadcom, Qualcomm, Wavecom, Skyworks, CNS, Hopen, Coretek, Smartcomm, Koretide, MLG, Pollex, Yulong, eZiText, Huoma Software, Tegic, Guobi, Genetech, ExIdeas, Wintone, EDI, CIC China, NSTEK, GZ Qidian, HYF Soft, Infotalk, Openwave, Access China, Opera, SmartTrust, Funian, Xiamen TianYuHenTong, Intergrafx, ArcSoft, Anyka Software, Digital Red, Xinkongqi, iaSolution, Gameloft, Mammoth Word, UEN, EA US, Techfaith, CECW, Yulong SZ, Wanzhong SZ, Yuhua Teltech, Jingwei, E28 (Shanghai), Simcom (Shanghai), Elitek, SUNPLUS, Gionee, Unitone SZ, ZEUS Telecommunication, Goldwiz Electric, Shanghai Longcheer Telecom, TrueTel, Orsus, ZJ Huali, Shanghai Huntel Technologies, COSMOBIC Technology, Runtong, Wanglixin, Mobicom Corporation, JCT Mobile, InterCEL, Spreadtrum Communications, Inc., BeiGaoZhi Tech, ELEON, TOGO/TRIO, Moma Design, Loemedia, Shanghai Kungson, Yisdesign, Chuangyu International, BenQ, Arima Communication, Quanta, Compal, HTC, Compal Communications, Envada, Qimei Communication, Huawei, ZTE, Lenovo, Bird, TCL, Amoi, Hisense.

For more information visit http://www.researchandmarkets.com/reports/c24133