China's 3G handset market is projected to expand to 33-39 million units in 2010 versus 5-7 million units in 2009, according to Roger Huang, senior analyst at Digitimes Research. With telecom carriers becoming more involved in end-use device distribution, China's 3G communication market is vastly different from what it used to be during the 2G era, Huang said.
Disappointing 3G handset sales in China during 2009 were largely due to an underdeveloped supply chain. In 2010, with international brand vendors offering higher quality products at lower prices, sales improved dramatically, Huang said.
During the 2G era, which had much lower technological entry-barriers, a slew of local brand vendors and white-box players were able to roll out low-cost handsets and even drove out several international giants, Huang said. However, with China's telecom carriers now impacting the handset market via distribution, pricing through generous subsidization, handset customization and marketing, tight cooperation with service providers is the new strategy, he added.
South Korea's Samsung Electronics and US-based Motorola are the most aggressive in distributing through the telecom carriers, Huang noted. Samsung in particular has devices sold through China's Big Three China Mobile, China Unicom and China Telecom and offers products at an wide range of price points. Nokia, the world's largest handset vendor, has begun to work with telecom providers but its progress still lags behind competition.
Research in Motion (RIM), Apple and HTC target the high-end segment with smartphones. HTC, with an array of Android- and Windows Phone 7-enabled devices, has tapped into the China market via all three carriers, Huang said.
