The mobile phone headset manufacturing industries in Greater China, comprising mainland China, Taiwan and Hong Kong, experienced significant growth in 2005, and will expand further in 2006. Supply and export volumes are expected to continue rising this year. As the expanding supplier base addresses the convergence of functions and applications, R&D efforts will be geared toward new technologies, products and designs.
Mainland China is currently the largest manufacturing base for headsets worldwide, accounting for 90 percent of the world's supply of all types of headsets. Makers supplying mobile phone headsets currently number 200, including the growing number of companies focusing on Bluetooth headsets.
Taiwan has about 150 mobile phone headset makers, many of which make traditional headsets and computer accessories. Most of the Bluetooth headset makers emphasize midrange and high-end models.
Some of the key findings of this report are:
• Further reductions in the price of Bluetooth chipsets, the entry of newer-generation chipsets and the hike in the supply of Bluetooth mobile phones are driving production and product development in Greater China.
• Wired headsets will continue in strong supply, but will mostly be for low-end applications.
• Bluetooth headsets will gain further traction in 2006. The versatility of Bluetooth stereo headsets will enable them to enter the mainstream and slowly edge out mono versions.
• RF and IR headsets are exiting the line.
• Prices will decrease by 10 percent to 20 percent in 2006 as a result of the continuous drop in the prices of Bluetooth chipsets.
• In addition to RoHS and WEEE, makers are hard pressed to obtain Bluetooth Qualifying Body (BQB) certification. The high application cost is deterring many mainland China companies from obtaining the certification and trade mark.
This report covers 19 mainland China-based, nine Taiwan-based and six Hong Kong-based companies, representing a cross section of Greater China manufacturers. Their projected aggregate output in 2006 is at least 153.13 million units, of which 106.37 million units or 69 percent will be exported. Their combined production of mobile phone headsets in 2005 totaled 112.30 million units, with exports reaching 66.80 million units or 59 percent of output for that year. This report also includes three South Korea-based companies.
Industry Overview
The mobile phone headset industries in Greater China, comprising mainland China, Taiwan and Hong Kong, are poised to continue an uptrend in 2006 and beyond, with supply and exports projected to rise substantially. Strong growth in the mobile phone market is fueling the market for accessories, whose dominant product line is the headset, along with battery packs and chargers.
Mobility and handsfree legislations in many developed countries and regions banning the use of mobile phones while driving are two of the main factors contributing to the present ubiquity of the mobile phone headset. The broadening adoption of Bluetooth resulting from the rising supply of Bluetooth-enabled mobile phones and lower chipset prices has also driven the growth of Greater China's mobile phone headset industries.
The expanding supplier base is addressing the convergence of functions and applications — mobile phone and entertainment — by developing new technologies, products and designs. This has in part resulted in the emergence of Bluetooth stereo headsets that are compatible not only with mobile phones but also with MP3 players and iPods. Some of these headsets are also able to support portable A/V players.
2005 saw the supply of mobile phone headsets rising substantially, largely because of the popularity of Bluetooth headsets. 2006 is expected to mark a watershed period as Bluetooth headsets start to dominate the mainstream toward fully displacing wired headsets. The worldwide market for Bluetooth headsets is forecast to reach about 110 million units by 2010.
In Greater China, Bluetooth headsets are slowly eclipsing wired and other wireless headset technologies in most companies' product lineups. Many of the large companies in mainland China, which have previously concentrated solely on wired mobile phone headsets because of the relative ease of manufacturing them, are gradually shifting to Bluetooth headsets.
Nearly all of the Taiwan companies in this report are making only Bluetooth headsets. Many of these companies also make other Bluetooth products for a complementary product portfolio.
Despite this strong trend toward wireless, however, supply of wired headsets will remain strong in the near term. These units are targeted at developing markets with low penetration rates for Bluetooth mobile phones and related accessories. Their supply is expected to steadily decline compared to wireless headsets in direct proportion to declining demand for wired mobile phone accessories in the worldwide market.
Industry Composition
Mainland China is currently the largest manufacturing base for headsets worldwide, with products covering the consumer electronics, computer and telecom marketplaces. The country accounts for 90 percent of the world's headset supply. Mainland makers' many years of experience in developing and producing A/V headsets, earphones and headphones have helped position the country as a powerhouse in mobile phone headset manufacturing.
There are at present about 200 mobile phone headset manufacturers in mainland China. About 75 percent of these companies are concentrating on wired headsets.
Supplier Profile
2001 Technology Inc.
Taipei-based 2001 Technology Inc. is engaged in the design, manufacture and marketing of mobile phone accessories such as travel chargers, car handsfree kits, and wired and wireless headsets. The company likewise produces computer and consumer electronic devices, including MP3 players and digital cameras. Since 2003, the company has been focusing on R&D of wireless headsets, particularly Bluetooth headsets and car kits.
All of 2001 Technology's US$25 million sales revenue in 2005 was generated from exports. Sales of mobile phone headsets accounted for 14 percent or US$3.5 million of 2001 Technology's annual sales in 2005. The company estimates sales of mobile phone headsets will hit at least US$4.2 million in 2006, up 20 percent from 2005.
Eighty percent of sales were generated from OEM buyers. Own-brand sales accounted for the remaining 20 percent. It takes two to three weeks for the company to deliver its products.
The company shipped 60 percent of its products to Western Europe, 25 percent to Oceania, and 10 percent to North America. The rest was distributed to Asia (3 percent) and Africa (2 percent).
2001 Technology ships its products from the export ports of Taoyuan in Taiwan, and Hong Kong.
Manufacturing Capability
2001 Technology has two factories located in Shenzhen in Guangdong in mainland China.
The factories have 25,000sqm work area with 40 production workers. The facilities are certified with ISO 9001, WEEE and RoHS.
The company's factories handle all manufacturing processes, including cosmetic design, plastic injection molding, SMT and manual component insertion. The factories also do PCB subassembly, painting and silkscreen printing, final assembly and QC in-house.
2001 Technology's factories can produce 100,000 units of Bluetooth headsets monthly. In case of larger order volumes, the company can outsource production to other companies. The company's subcontractors can turn out another 100,000 units of Bluetooth headsets per month.
The company also subcontracts production of speaker units and microphones. The subcontracted processes include mold making and packaging. The subcontractors provide several packaging types such as white boxes, color boxes and blister packs to meet buyer demands.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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