Top Ten Conjectures of China's Mobile Phone Industry in 2012

1. In 2012, the Chinese market sold about 300 million mobile phones, and smartphones accounted for 40%

In 2012, China’s mobile phone market totaled 300 million units, of which smart machines accounted for 40%, reaching 130 million units. Specifically, 40 million units of TD-format smart machines were shipped, 25 million units of WDCMA smart machines were customized, and 40 million were on the open market. The CDMA standard smart machine has a customized market of 25 million units.

2. In 2012, the TD "half" open market was launched. Qualcomm may be the dark horse's 2012 TD terminal target of 60 million units, of which 30 million to 40 million intelligent machines, and China Mobile headquarters will collect 10 million units. Local mobile procurement 25 million units, feature phones and other terminals 20 million to 30 million units. The semi-open market here refers on the one hand to the local mobile market, on the other hand, it means that the TD open market is more likely to start in the second half of the year, because technically TD still lags behind WCDMA for about half a year. The opportunity of Spreadtrum’s TD smart phone program is to purchase locally, and Qualcomm may become a dark horse in the TD field in 2012.

3. MTK 2G shipments remained at the same level as in 2011, with 3G further hitting Qualcomm's MTK. The 2G chip shipments in 2012 were the highest and remained unchanged at around 530 million units in 2011, and even declined slightly. The growth is unlikely. MTK has planned series chips on 3G and 4G, and several models will be launched or mass-produced in 2012. Among them, MT6575 with Cortex-A9 core and 1GHz frequency will be mass-produced in the second quarter of 2012 and will impact Qualcomm's existing 7-series chips. Boldly speculate that in 2012 MTK will seize 25% to 30% of China's 3G smartphone market share from Qualcomm.

4. The “GDP” competition for mobile phones runs through 2012. 2012 is the year that smartphones continue to compete in hardware. The standard of the 1,000-yuan smartphone will be upgraded to a 4.0-inch WVGA capacitive touch screen and a 1GHz-plus clock processor. Not only that, but the upgrading and competition of “GDP” (GPU, DDR, Display, Processor) will continue throughout 2012. Chip suppliers, screens and other accessories manufacturers, mobile phone companies, operators, and all aspects of the mobile phone industry chain will be involved.

5. Mainstream thousand dollars smart machine cost into the current 3.5-inch capacitive screen range of 60 US dollars, 1GHz main frequency mainstream smart machine costs about 80 US dollars, is expected to master chip, memory chip, touch screen and other expensive components in 2012 prices further Lowering, the cost of this configuration smart machine will enter the 60 US dollars range, and the terminal price will be reduced from the current 1,000 yuan to less than 800 yuan.

6. The price war for smart phones has become fiercer. Internet companies have lost money to sell mobile phones. In 2012, smart phone price wars were inevitable. On the one hand, because the upstream chip solution has matured, more and more terminal manufacturers have entered the smart phone market, and the competition is fierce. On the other hand, both chip manufacturers, handset manufacturers and operators hope to occupy the terminal market quickly and expand at this stage. For user groups, profits have become the second thing considered and there is enough incentive to conduct price wars. In the era of feature phones, terminal prices were three times higher than hardware costs. In the smart machine era, e-commerce companies and operators have made channels more transparent, and the terminal price is only twice the hardware cost. It is worth noting that in 2012 there will be more venture capital support for Internet companies to enter the mobile phone field. In the field of mobile phones, the customary logic of copying Internet companies to make money first and then earn money will make the price war more fierce than ever before.

7. The number of exporters has fallen, and more mobile phone companies have returned to the global mobile phone industry from 2G to 3G. The penetration rate of mobile phones in Asia, Africa, and Latin America has also exceeded 50%. The market is gradually becoming saturated, and the competition is fierce and gradually mature. The demand for brands from purchasing consumers is also increasing. Under this trend, traditional international companies such as Nokia and Samsung have gradually gained market share thanks to their brand advantages. On the road to building a brand, Chinese companies have found that local companies in these areas have advantages over themselves because they are protected by the local government. Encouraged by the enemy, in 2012 there will be more Chinese mobile phone companies temporarily returning to China to run their brands.

8. Emerging brands in the lower third-tier cities have higher mobile phone prices than the first and second-tier brands. In the era of smart phones, mobile phone design companies either serve brands or create their own brands. Leading domestic design companies such as Ximtong, Longqi, Huaqin, Xike and Ruijiake have already shifted their focus to brand customers and achieved relatively stable shipments. Wyntek and other design companies also launched mobile phone brands such as Wing, Cameome, Wei Lok, and Qi Le. These brands have no advantage over first-tier and second-tier cities such as Nokia, Samsung and other international brands such as OPPO. However, taking advantage of the vastness, depth, and low transparency of the Chinese market, most of these emerging brands are pursuing deeper levels of the tertiary market, and the prices of smartphones for a number of manufacturers are higher than those of first-tier and second-tier brands in first and second-tier cities. Brands such as Huawei and Huawei are priced through handsets with the same hardware specifications sold by operators.

9. The e-commerce channel has become more popular in 2012, but the number of successful users has been overwhelmed by the high cost of traditional channels. The cost of stand-alone channels can reach 30% of the price of mobile phones. The barriers to entry for operator channels are too high for non-general companies to bear. Some mobile phone companies that have traditionally been shipped via e-commerce channels such as Taobao, or mobile phones that are inspired by the success of Meizu and Xiaomi e-commerce channels, will join e-commerce channels in 2012. However, the e-commerce channel seems to have low barriers to entry, and in fact the hidden costs are not low. First of all, e-commerce channels are not as easy to control as traditional channels. For example, the quality of individual mobile phones may be quickly amplified due to the influence of the Internet and difficult to handle. After the e-commerce channel has been widely adopted, in order to obtain sufficient user attention among numerous competitors, the financial resources and energy required to invest will also increase rapidly. In addition, most of the medium- and small-sized companies are mainly faced with the market below the third level, and the implementation environment of e-commerce channels is relatively poor. There is still a lack of both the consumer's habits and the degree of supporting logistics. Therefore, although e-commerce channels will be tried by a large number of mobile phone companies in 2012, the number of successful people will not be much.

10. Leading companies saw a surge in shipments, but profitability is worrying that ZTE and Huawei’s shipments of smart phones may increase significantly in 2012. Among them, Huawei will increase from 17 million units in 2011 to more than 50 million units in 2012. It will increase from 12 million units in 2011 to more than 30 million units in 2012. However, the gross profit of the mobile phone business of the two companies is lower than the average 30% gross profit of their international counterparts, which is only about 20%. With the intensification of the price war in smart phones in 2012, the profit level may be further reduced.