Mainland China and Taiwan produced 290.15 million mobile phones in 2004, of which 69 percent or 200.01 million units were exported. The export volume accounted for 29 percent of the total worldwide shipments for 2004 of 680.5 million mobile phones, according to the Industrial Economics and Knowledge Center (IEK) of Taiwan's Industrial Technology and Research Institute (ITRI).
Forecasts from mainland China's Ministry of Information Industry (MII) and the IEK place the aggregate output from mainland China and Taiwan at 326.10 million units in 2005. The forecast combined export volume is 222.80 million units, a growth of 11 percent from 2004 shipments. The two supply markets will continue to account for 29 percent of the worldwide shipment of 760 million mobile phones, as forecast by the IDC.
Mainland China has about 60 mobile phone makers, of which 16 are covered in this report. Taiwan has 30 mobile phone makers, and 9 are represented in this report. The 25 mobile phone makers accounted for 29 percent and 15 percent of mainland China and Taiwan's combined production and exports, respectively, in 2004. They are expected to contribute 34 percent and 22 percent of the region's production and exports, respectively, in 2005.
Manufacturing Centers
• Mainland China's main production centers are Shenzhen and Huizhou in Guangdong, Ningbo and Huangzhou in Zhejiang, Qingdao in Shandong and Xiamen in Fujian.
• The other production bases are Nanjing in Jiangsu, Dalian in Liaoning, and Beijing.
• The key manufacturing centers in Taiwan are Taipei, Taoyuan and Hsinchu.
• Taiwan mobile phone makers have set up plants on the mainland in Kunshan, Suizhou and Wujiang in Jiangsu; and Dongguan and Shenzhen in Guangdong.
Production
• The aggregate output from surveyed mainland China and Taiwan mobile phone makers reached 83.53 million units in 2004. It is forecast to grow to 109.36 million units in 2005.
• The output from surveyed mainland China makers was 64.20 million units in 2004. This is forecast to grow by 20 percent to hit 76.71 million units in 2005.
• The output from surveyed Taiwan makers reached 19.33 million mobile phones in 2004. Production growth in 2005 is projected at 69 percent to reach 32.65 million units.
• Mainland China makers forecast there will be over 60 licensed GSM and CDMA manufacturers in the country by the end of 2005.
Exports
• The aggregate exports by surveyed mainland China and Taiwan mobile phone makers reached 29.33 million units in 2004, and is forecast to rise to 50.03 million units in 2005.
• Shipments from surveyed mainland China makers reached 10.26 million units in 2004. This will grow by 74 percent to reach 17.82 million units in 2005. Total export percentage is forecast to climb from 16 percent in 2004 to 23 percent in 2005.
• Aggregate exports from surveyed Taiwan makers totaled 19.08 million units in 2004. Makers project a 69 percent growth in 2005 toward an export volume of 32.20 million units. They expect to export 99 percent of their mobile phone production in 2005.
Industry Overview
Mainland China and Taiwan are expected to account for at least 29 percent of the worldwide shipments of mobile phones in 2005. Aggregate exports from both supply markets are projected to reach 222.80 million units in 2005, a growth of 11 percent from the combined exports of 200.01 million units in 2004.
The Industrial Economics Knowledge Center (IEK) of Taiwan's Industrial Technology Research Institute (ITRI) estimated worldwide shipments in 2004 at 680.5 million mobile phones. The IEK projects a growth of 10 percent toward total shipments of 750 million units by the end of 2005.
Industry forecasts from market research firm IDC place worldwide shipments of mobile phones in 2005 at 760 million units. This is a 10 percent growth from 2004 worldwide shipments of 692 million mobile phones. IDC predicts the market growth rate will start slowing and stay at 5 percent compound annual growth rate (CAGR) through 2009.
Gartner provides more bullish forecasts, estimating total shipments in 2005 to reach 779 million units, 16 percent higher compared to the 671.5 million units shipped in 2004. The market research firm expects accelerating sales of next-generation phones to help drive market growth. It predicts 100 million 3G phones to be sold in 2006.
iSuppli reported worldwide mobile phone shipments in Q1 and Q2 2005 totaled 170 million units and 181 million units, respectively, with each up by 2.4 percent and 7.1 percent over the same periods last year. Q3 and Q4 2004 shipments were estimated at 190 million units and 210 million units, respectively. The market research firm estimates total mobile phone subscribers to increase from 1.6 billion people in 2004 to 1.9 billion people by the end of 2005.
This report uses IDC's global shipment forecast of 760 million mobile phones for 2005 to calculate2005 projections.
Overall growth in the worldwide mobile phone market, although slowing down compared to the double-digit growth of previous years, will be sustained by the thriving replacement segment in mature markets on one hand and an uptake in emerging markets on the other. Even as sales in key markets such as the United States and Western Europe are starting to dip, the release of more advanced multimedia phones based on 2.5G or 3G standards will drive growth in the replacement market. Meanwhile, rising supply of entry-level phones will fuel growth in emerging markets, particularly in mainland China and India.
These developments will be complemented by deeper mobile phone penetration in more developing countries, as aimed by the Emerging Handset Market (EMH) project of the GSM Alliance (GSMA). The project hopes to encourage mobile phone makers to develop and introduce GSM phones at entry-level prices — sub-US$40per unit — to make them more affordable to countries and regions where mobile phone penetration remains low.
Supplier Profile
Amoi Electronics Co. Ltd
Amoi Electronics Co. Ltd specializes in the design and manufacture of communication, computer and consumer electronic products. The company has six business divisions: mobile communication products, consumer audio systems, consumer video systems, portable systems, IT products and electronic equipment.
Amoi started producing mobile phones in 2001. Within five years, the product line has started to account for the bulk of sales. Amoi is currently one of the 10 largest producers of mobile handsets in mainland China. It has US$500 million in assets.
The revenue in 2004 was US$610 million, of which 80 percent came from sales of mobile phones. Amoi aims to further boost exports, expecting an overseas demand of 750,000 Amoi labeled mobile phones in 2006, mainly from Europe, the United States, India, Singapore and the Middle East.
Amoi is one of few manufacturers to have achieved breakthroughs in W-CDMA, CDMA2000 and TD-SCDMA. It is a member of the TDSCDMA Alliance and one of the manufacturers supported by the MII. For W-CDMA, it has established long-term cooperation with Ericsson on work covering 2G, 2.5G and 3G. During the 3G Conference in 2004, it signed a strategic cooperation agreement with Qualcomm for the development of 3G handsets based on CDMA2000.
In 2004, Amoi produced 5 million mobile phones and exported only 250,000 units. In 2005, it aims to export 750,000 units, which will account for 12.5 percent of the total output projected at 6 million units. The major overseas markets are the United States, Europe, the Middle East and Southeast Asia.
The company's major overseas customers are Orange, TIM and ChungHua Telecom. Over 90 percent of exported models carry the Amoi brand.
Amoi has set up regional sales offices in the United States and Singapore. Its 3G phones are targeted at Europe.
Manufacturing Capability
Amoi has two factories. The 70,000sqm production facility in Tong'an Town, Xiamen produces speaker cabinets and drivers. The second production facility is the 200,000sqm Amoi Electronic Town, located in Haicang District, also in Xiamen. In 2004, it expanded the factory area to 430,000sqm.
Amoi's mobile phone production is handled in the second facility, which has teams working on software development, hardware design, SMT, plastic injection and final assembly. The facility currently has 29 SMT assembly lines, 18 assembly lines and 18 key assembly lines. It also has 95 plastic injection equipment.
Amoi currently has a monthly capacity of 800,000 mobile phones. Expansion plans are underway, with a target capacity of 1 million mobile phones in 2005. It plans to add 18 new SMT lines by the end of 2005.
Amoi implements strict QC. It introduced Statistic Process Control (SPC) and Industrial Processing Control (IPC) in 1999 to organize the production process. It has ISO 9001,TL 9000 and ISO 14001 certifications. A 100-member team is in charge of QC, which covers IQC, IPQC, QA and OQA. The QC team uses advanced test equipment, for LCR, X-ray, transistor and Tirode tests.
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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