 By
the end of 1999, the total number of nationwide mobile-phone subscribers
had reached 43 million. Of them, there were 33 million GSM subscribers
to China Mobile Telecommunications, 4.95 million subscribers to Analog
Net, and 5.23 million GSM subscribers under China Unicom. Based on
the development plan of the China Mobile Telecommunications Group,
the number of its new mobile phone subscribers will increase to 20
million this year. And China Unicom will increase the number of its
mobile phone subscribers to more than 8.4 million. The number of new
subscribers to China Mobile Telecommunications has exceeded 10 million,
and the number of those to China Unicom has reached more than 4.7
million. In the first half of the year, the market demand for mobile
phones was 14.7 million; with other factors, such as replacing old
models and moving the Analog Net to GSM, the total mobile-phone volume
on the market was between 18 million and 20 million. If one mobile
phone sells at a price of RMB2000 on average, the total mobile-phone
value on the market will reach between RMB30 billion and RMB40 billion
in the first half of 2000.
Supply of mobile phones is in surplus, but raw materials are in short
supply
In 2000, with mobile phone makers having drawn up ambitious production
plans with an over-optimistic attitude towards the domestic market,
and the total mobile phone volume in China growing significantly with
Chinese made mobile phones being launched on the market, the output
of mobile phones has risen sharply, and the supply of some mobile
phones has exceeded demand in some areas.
 However,
the materials needed to produce mobile phones are in short supply.
Under a highly-specialized global production system and with a growing
worldwide demand for IT products, the demand for semi-conductor chips
has grown fast in 2000. Affected by the financial crisis in Southeast
Asia a few years ago, the production of some components has been stagnating.
The abrupt growth in demand leads to a short fall in the supply of
components, which has affected the world's leading mobile-phone makers
to varying degrees. It is reported that Motorola has reduced its next
year's mobile-phone production plan. In general, component suppliers
guarantee the major producers' demand for components first, so smaller
mobile phone makers will be affected more adversely. With a late start
and a small scale, China's mobile phone makers have been affected
by the shortage of raw materials. Without an expandable production
scale, they cannot seize a larger share of the market.
The brand and fashion of mobile phones have expanded, but WAP mobile
phones have still not become leading products
In the first half of the year, with the fiercer competition among
brands, mobile phone makers launched new models of mobile phones with
a higher speed. On the market now there are mobile phones of more
than 100 models, including more than 60 leading models. For example,
Motorola launched four major brands in the first half of 2000, namely
Accompli, Timeport, Talkabout and V series. Within two months, it
will launch another new mobile phone on the market. Motorola's five
most recent mobile phones launched on the marke are the Accompli 6188,
Talkabout T2688, V8088, L2000WWW and T2288. Ericsson launched its
sophisticated T28sc mobile phones first, then launched the R320S and
R380S WAP mobile phones at the opportune moment. Siemens launched
its 3508, 3518i and 3568i mobile phones in March, among which the
last two are WAP-enabled. And other manufacturers are turning out
various new models.
 Although
WAP mobile phones have not become leading products on the market,
the WAP function is indispensable to a sophisticated mobile phone.
To date, there are 100,000 registered WAP mobile-phone subscribers
in China. But restricted by future costs, design of mobile phones,
released information, speed of network, and related safeguards, the
growth of WAP mobile phones is still not very fast. Viewed from the
development plan of distributors in 2000, China Mobile Telecommunications
plans to develop 800,000 new subscribers, and the number of its subscribers
will reach 4 million next year. Therefore, the outlook for the development
of WAP mobile phones is bright.
The market structure has not changed, but the market share of Chinese-made
mobile phones has grown significantly Viewed from the market share
of Chinese-made mobile phones, although the figures produced by different
surveys differ from each other slightly, the ranking of mobile-phone
brands has still not altered significantly. People feel encouraged
by the growing market share of Chinese-made mobile phones. Based on
figures released by the Ministry of the Information Industry, domestically-made
mobile phones have seized about 10% of the market.
The market structure has not changed, but the market share of Chinese-made
mobile phones has grown significantly Viewed from the market share
of Chinese-made mobile phones, although the figures produced by different
surveys differ from each other slightly, the ranking of mobile-phone
brands has still not altered significantly. People feel encouraged
by the growing market share of Chinese-made mobile phones. Based on
figures released by the Ministry of the Information Industry, domestically-made
mobile phones have seized about 10% of the market.
 Overall,
mobile phone prices have gone down. Last year, the average retail
price was about RMB2,100, but it is below RMB2,000 this year. And
a fashionable mobile phone is sold at a price of about RMB1,500 in
2000. As an inevitable result triggered by the over-supply of mobile
phones, the price of all models fell by a wide margin in the first
half of 2000.
The structure of sale channels of mobile phones has not changed, and
mobile phones seek their sale agents based on the models
Mobile phones have always been sold by agents, and domestically-made
mobile phones are trying to be sold in a similar way. Today, different
brands of mobile phones have a number of first-level agents, who perform
a vital role on the domestic mobile phone market.
In the first half of the year, mobile phones were seeking sales agents
based on their style and color. Following Nokia, major mobile-phone
makers have adopted this mode of sale, with an agent selling a single
style of a certain brand independently. This mode of sale can play
a vital role in stabilizing market prices.
Furthermore, seasonal demand for mobile phones has changed a little,
and sales are steady. Over the first half of the year, sales peaked
in May and June. i |
