'Grey' smartphone sales tipped to dip

PUBLISHED : Saturday, 23 July, 2011, 12:00am
UPDATED : Friday, 08 May, 2015, 4:18pm


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A steady decline is forecast for the mainland's mobile phone 'grey market' as the major handset brands expand distribution of their popular smartphones, industry experts say.

Market research firm IHS iSuppli said a nationwide crackdown on grey-market vendors, growing demand for more advanced smartphones, and the expansion of dominant local players such as ZTE, Huawei Technologies and TCL Communication Technology contributed to the projected slowdown.

'Grey-market handsets are cellphones manufactured in China that are not recognised or licensed by government regulators,' Kevin Wang, the director of China research at IHS iSuppli, said.

Domestic shipments of these mobile phones are forecast to reach 213 million units next year, down from the estimated 255 million units this year and 228 million units last year.

Richard Mok Joe Kuen, an executive director at Hong Kong-listed mobile components supplier AAC Technologies, said mainland manufacturers 'are more capable of designing higher-specification smartphones' and providing ancillary after-sales support services to customers.

Wang added that the cost advantage of cheap grey-market handsets was also being eroded due to the demand for branded smartphones with 'compelling mobile internet applications' and widely available at competitive prices.

TCL Communication, for example, has heavily promoted its Alcatel-brand smartphone through traditional shops and online stores. At the same time, Lenovo Group's LePhone is marketed through its partner mobile network operators and retailers.

'China's domestic smartphone market is booming this year as prices for handsets and 3G services fall,' Wang said.

He estimated the average selling price for smartphones on the mainland would, for the first time, reach US$299 this year, down 4.9 per cent from US$314 last year.

Mok, however, pointed out that Apple's iPhone had become hugely popular on the mainland as the company expanded its availability through its branded stores and local distributors. 'The iPhone has become a status symbol,' Mok said.

Apple chief operating officer Timothy Cook said this week that the number of iPhones sold on the mainland, Hong Kong and Taiwan increased 500 per cent year on year in the nine months to June.


The record revenue, in US dollars, that Apple reported on the mainland, Hong Kong and Taiwan in the quarter to June