3G Phone Sales to Pick Up Leading by Domestic Brands
BEIJING, Sept. 17 /Xinhua-PRNewswire/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released a report on China’s TD mobile phone market in 2008H1.
By the end of June 2008, China’s TD users reached 50,000, trial commercial users exceeded 8,000. TD mobile phone sales greeted the first accelerated phase after the official commercial launch of TD. CCID Consulting forecasts that TD terminal users will reach 2.3 million by the end of 2008.
TD Mobile Phone Will Become the Market’s New Focus
In 2008H1, China’s mobile phone market performed poorly along with the overall economic situation due to rising energy costs, RMB appreciation and weak purchasing power, but within the industry, lack of innovation in new products also pointed to the slow growth. With the TD commercial trial, users gradually hold reasonable attitude on changing mobile phones.
After four months of trial commercial use, there are only 8,000 TD commercial users. The major reasons are that TD network layout still needs to upgrade; as for terminal technology, mobile phones’ performance in not stable, most of terminal 384kb’s descent velocity is difficult to widen the disparity with EDGE; as for marketing, TD sales is heavily affected by branding, as currently, the brands in the market are still the six brands that won in the first bid, limiting retail channels to business halls, in D.PHONE, ZOOMFLIGHT, KINFIC, GOME and SUNING; as for consumption psychology, clients still hold reasonable attitude on TD products. With rooms for improvement in performance and services through the upgrade of network and terminal, TD also continues to explore business modes, brand marketing and Olympic Games’ training. With improvements shown to the market, 3G mobile phones will become the market’s new focal point.
Figure 1: Shipment of TD Mobile Phones in Chinese Market, April-June 2008
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Source: CCID Consulting, July 2008
Figure 2: Growth and Forecast of TD Mobile Phone Users, 2008-2012
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Source: CCID Consulting, July 2008
China’s Domestic TD Mobile Phone Manufacturers Achieve Initial Success
By the end of June, trial commercial mobile phones were limited to six kinds. As for sales volume, although ZTE’s U980’s price is higher than the other five kinds of TD terminals, based on its better performance, it still leads in the TD mobile phone market, which accounts for 33.5% of the total market. The next is Samsung, which accounts for 18.9%; the third one is LG, which accounts for 17.6%. CCID Consulting forecasts that at the initial stage of TD commercial use, based on its technical advantage and large investment, ZTE will maintain a leading position; based on technical advantage, Samsung and LG’s market share will increase; NOKIA will set foot in TD at selected times.
Figure 3: Brand Structure of China’s 3G Commercial Mobile Phone Markets (April 1-June 30 2008)
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Source: CCID Consulting, July 2008
Although China’s domestic TD mobile phones have obvious advantage in China Mobile’s former two purchases, which account for 85% in the second purchase, CCID Consulting’s data shows that more than 70% of TD commercial mobile phones’ shares are mastered by ZTE, Samsung and LG. With TD mobile phones’ sales channels’ gradual development, international brands’ joining will bring great pressure to Chinese domestic manufacturers. In order to strengthen product competitiveness, firstly, China’s domestic brands should lay a good foundation and have long-term development strategy. There are 40 kinds of TD mobile phones with thread network access detect, but only 25 kinds entered China Mobile’s purchase list. In TD’s trial commercial use stage, products’ consubstantial trend is important. Manufacturers should pay more attention to technology accumulation; Explore differentiated market so as to realize products’ long life-force. They also should enlarge their accumulation of brands and market cultivation so as to shorten the distance with international brands. Finally, they should strengthen industrial alliance’s inner cooperation. China’s domestic brands have obvious distance with international manufacturers at the aspects of capital and R&D strengths; meanwhile, chip performances are not mature and unfavorable interoperability of brands restricts the development of every TD mobile phone manufacturers.
Carriers Drive the Start-up of TD Mobile Phone Market
Compared with other 3G standards, TD started off late and its industrial chain is weaker in strength, so China Mobile adopts centralized purchasing for its mobile phone terminals: on one hand, it could reduce TD industrial business risk, which is still in a growth stage; on the other hand, based on China Mobile’s brand and marketing advantage, it could reduce terminal manufacturers’ marketing promotion cost for TD mobile phones. Meanwhile, China Mobile expands overall marketing strategy to build TD, open its own channels to terminal manufacturers and set up electronic sales platform; as for marketing, China Mobile strengthens brand building and pertinence; as for services, China Mobile launches innovative characteristic service, such as mobile phone lease service; as for customer development, China Mobile develops unprecedented subsidy policy. With China Mobile’s full-scale starting to TD, TD will focus on young consumer group with stable income, and gradually expand to the whole society, which will drive the start-up of TD terminal sales.
Value-added Service Becomes TD Mobile Phone’s New Highlights
Based on mobile phones’ multimedia and two-mode, mobile phones have trend to the homogenization, terminal profits are gradually weak. As for 3G market’s opportunities, terminal manufacturers expand abroad and flexible cooperation, aiming at carriers’ various services. As for business content, after China Mobile’s acquisition of China TieTong, compared with the other two carriers, China Mobile has obvious disadvantages in fixed network, as fixed network has high investment, low output, leading to China Mobile’s decision in not considering the integrated service of fixed network, broadband, mobile communications as development emphasis, but focus on the value-added service, content and quality of mobile Internet services. China Mobile provides clients with abundant and pertinent value-added service. Thus, for value-added service, TD terminal manufacturers strengthen the support and cooperation with China Mobile, coordinate value-added service to enlarge R&D, position products’ selling points, strengthen terminal products’ difference and competitiveness. As for carriers’ customized service, ZTE’s U85 embeds China Mobile’s DM software’s auto-upgrade functions and PIM. This value-added service will strengthen TD mobile phones’ competitiveness.
About CCID Consulting
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China.
Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting’s customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.
For more information, please contact:
Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
Tel: +86-10-8855-9080
Email: liuyan@ccidconsulting.com
