Greater China's two-way radio market is experiencing continued expansion, marked by increasing output and exports from manufacturers in mainland China, Taiwan and Hong Kong. Total production in 2004 was estimated at 24.8 million units, of which 95 percent or 23.6 million units were exported. The forecast output and export figures for 2005 are 34.5 million units and 32.5 million units, respectively.
This report profiles 23 two-way radio manufacturers: 14 mainland China-based companies, four Taiwan-based companies and five Hong Kong-based companies. Combined, these companies' production volume for 2004 was 16.5 million units, representing 67 percent of the industry output for the year. Aggregate exports over the same period were 15.7 million units.
These companies' projected output and export figures for 2005 are 22.51 million units and 21.4 million units, respectively. These represent 65 percent and 66 percent of Greater China's estimated total output and exports for 2005, respectively.
Manufacturing Centers
• There are about 30 two-way radio manufacturers in mainland China. Taiwan has eight manufacturers left, and Hong Kong has 30 suppliers, comprising manufacturers and traders.
• In mainland China, the key production centers are Dongguan, Guangzhou, Shenzhen and Zhongshan in Guangdong and Quanzhou in Fujian.
• More than 80 percent of Taiwan companies still maintain factories on the island. Only 20 percent have completely moved production to mainland China, while 60 percent have factories both in Taiwan and mainland China. The Taiwan companies are based in Taipei and Taichung.
• All Hong Kong companies have their production facilities in mainland China.
Production
• Mainland China-based manufacturers produced an estimated 2.1 million two-way radios in 2004. This is forecast to grow 62 percent in 2005 to reach 3.4 million units.
• Surveyed Taiwan manufacturers produced 187,600 two-way radios in 2004. Output for 2005 is pegged at 265,600 units, a growth of 42 percent.
• Hong Kong-based companies produced 14.2 million units in 2004, and are aiming to turn out 18.9 million units in 2005.
Exports
• Western Europe and North America are the main export destinations of profiled manufacturers.
• Mainland China-based manufacturers shipped 1.3 million units in 2004 and are forecast to increase exports by 77 percent to hit 2.3 million units in 2005.
• Taiwan-based manufacturers exported 171,864 units in 2004 and will ship 232,960 units in 2005. This represents a 36 percent increase year-on-year.
• Hong Kong-based companies shipped 14.2 million units in 2004. Exports for 2005 are expected at 18.9 million units, an increase of 33 percent.
Industry Overview
Most interviewed manufacturers from mainland China have been increasing production and export volumes every year. The 14 companies surveyed represent 56 percent of the manufacturer population and account for 80 percent of the country's total two-way radio output. These companies' combined two-way radio production in 2004 was 2.15 million units. Exports were pegged at 1.32 million units.
Statistics from Taiwan's Bureau of Foreign Trade indicate that the island's total export value for two-way radios in 2004 reached US$10.55 million. This was a 48 percent growth over the US$7.13 million figure in 2003. Based on projections provided by the Taiwan companies interviewed for this report, Taiwan's two-way radio export value is expected to increase by 40 percent in 2005.
Competition in the mature product line has caused Taiwan's two-way radio sector to dwindle to eight manufacturers. The four companies covered in this report represent 60 percent of the maker base. These manufacturers also account for 60 percent of the island's total annual production. Combined, the companies produced 187,600 two-way radios in 2004, corresponding to sales of US$15.24 million. Exports for the year totaled 171,864 units.
Mainland China companies enjoy low production costs and a huge domestic buyer base. These benefits have allowed them to keep prices down. Their low prices have pressured Taiwan companies to focus on developing high-end units and avoid competition.
Between 2003 and 2004, there were more than 10 new entrant companies in Hong Kong's two-way radio sector. According to the HKSAR Census and Statistics Department, the total export value of two-way radios from Hong Kong has been experiencing double-digit annual growth.
The total export value for 2004 has gone up 19.41 percent over 2003 figures, amounting to US$235.7 million. Exports in 2003 reached US$197.385 million, a 10.9 percent year-on-year (YoY) growth.
It is believed that Hong Kong will have about eight new two-way radio manufacturers in 2006.
Almost all of the two-way radios on offer from all companies in this report are handheld models. These can be categorized into professional-use versions such as the Private Mobile Radios (PMR) and Land Mobile Radios (LMR); and civilian-use versions dominated by the Family Radio Service (FRS) models.
Other types available include General Mobile Radio Service (GMRS) versions and models that operate over VHF and UHF. Most makers can also deliver models that run on buyer-specified frequencies.
Supplier Profile
Abell Electronics Inc.
Established in 1994, Shenzhen-based Abell Electronics Inc. is a maker of handheld and wireless telecom equipment. Formerly known as Teletone, the company used to be the largest pager maker in mainland China. However, the slump in the domestic pager market in 1999 forced Abell to shift production to two-way radios.
The company started product development for two-way radios in 2001, and mass production commenced in December 2002. Abell currently generates 99 percent of its total revenues from two-way radios. From the total output volume of 60,000 units in 2004, about 30 percent, or 18,000 units, was shipped to overseas buyers. This is a huge jump from the previous year's export revenue of US$35,000, a mere 1 percent of total annual sales for 2003.
Roughly 20 percent of Abell's production is devoted to OEM orders, while 10 percent goes to ODM contracts. The remaining 70 percent is sold under the company's in-house label, Abell. Major destinations include Canada, the United States, Russia, Australia, Brazil, Argentina, Ukraine and Thailand.
Sales of two-way radios reached US$5 million in 2004. Revenue is targeted to rise to US$10 million in 2005, a 100 percent growth. To reach this target, the company is doubling its production volume in 2005 to 120,000 two-way radios.
Manufacturing Capability
The Global Sources team visited Abell's factory located at the Zhongxing Industrial City in the Nanshan district, a 30-minute drive from downtown Shenzhen. Located on the second floor of Building 14, the 1,500sqm facility comprises production workshops and four warehouses for storing components and finished goods.
Abell subcontracts its tooling, plastic injection and silkscreen printing requirements to local companies in Shenzhen. Likewise, it currently subcontracts SMT work, but plans to start handling its surface-mounting requirements in-house with the acquisition of new equipment in the second quarter of this year. Abell is currently constructing a clean room for the new SMT line.
The company's workshops are located next to its warehouses. Upon entering the facility, we saw five production lines, including one component insertion line, one manual SMT and part assembly line, two general assembly lines and one repair line. We counted a total of 25 workers, one QA technician and two QC workers on each line. At the end of the SMT line, there are two YX-IR-300 (D) reflow ovens with 12 heating zones and a YX-HW-300 wave soldering machine, all sourced from Shenzhen.
The ISO 9001-certified company implements TQM in all aspects of its operations: from R&D, procurement, production and inspection to quality improvement. Abell adopts the MRP system in QC, and complies with US MIL-STD810C/D/E standards.
Abell revealed that its monthly capacity for two-way radios jumped from 500 units a month during H2 2003 to 5,000 units in H1 2004. It hopes to double this volume to 10,000 units beginning H2 2005. As part of its preparations, the company has imported two Yamaha YV100Xe high-speed mounting machines from Japan, worth US$300,000. Abell has also purchased a five-story, 7,000sqm production facility in the Tongle Industrial Zone of Shenzhen.
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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