Chinese Mobile Phone Industry Outlook Studies

The purpose of the article is to review the experience and lessons learnt from domestic mobile phone industry, analyze the current status of this industry and consider the existing issue and seek for solution based on time order and the development history of domestic mobile phone.Chinese mobile phone industry develops through four stages: Foreign product input stage due to domestic low technology and capacity shortage;domestic enterprise's leadership stage with the priorities of selling technology, cost and localization;some domestic and foreign enterprises win back the priority with advanced technology, it comes to a stage that foreign and domestic enterprises mutually merger and resource has been re-integrated;domestic technology development stage.The development of domestic mobile phone industry is the first stage before year 2000 and the second stage is in year 2001 to 2003. Currently, it comes to the third stage with the characteristics of capital re-integration and the turbulence and differentiation of price competition. Emok Panda, Kejian, Soutec burst out the break of capital flow. At the same time, new enterprises will take part in the competition of mobile phone market. Domestic mobile phone industry is gestating re-combination and new hope.Domestic mobile phone input & developmentThe market share of domestic enterprise is less than 10% before year 2000 and foreign bands dominate Chinese market. The two mainstreams of domestic mobile phone are, to use the combination of module and periphery components with own or South Korean ID and MMI design and to use OEM model directly. The market share of domestic enterprises climbs rapidly from 13% in 2001 to 30% in 2002 and even 50% in 2003.Main reasons for the leading position of domestic mobile phone: China is a country with vast territory;domestic enterprises can break through the market from the second and third class cities as a new force suddenly rises. That is so called "the country besieges the city";Domestic enterprises design differential products according to area differences and consumer differences. The advertisements become the life-saving straw for domestic enterprises because the consumers are usually influence by the media and price. Although there's a lack of highefficient selling distribution system, domestic enterprises reached success through the masses selling strategy.Domestic mobile phone enterprises win some market shares through the priorities of ID design, application technology, advertisement and selling distribution. Almost all the domestic enterprises pay great attention to aspects like product, price, channel management, market extension, quality and after sales in accordance with the strategy of this stage.Main difficulty:Domestic bands crisis, the result of market competition willbe disastrousDomestic enterprises are facing great crisis to the counterattack of foreign brands, the strike of some secret bands without national license and the fact that the supply exceeds the demand. Although the strategy change of foreign brands greatly effects domestic mobile phone industry and make it into corner, the main reason lies in domestic mobile phone enterprises themselves. During the development of domestic mobile phone, we haven't paid great attention to the core technology, which caused the big gap between domestic enterprises and famous foreign brands.Solution for domestic enterprises are:Emphasize product quality to insure product life;meet the needs of domestic consumers;expand oversea market according to own characteristic.The main difficulty most of the domestic mobile phone enterprises face is the capital flow, e.g., Panda, Soutec etc. besides, domestic enterprises should strengthen selling and service channel;dedicate to core technology research and development;however, such situation can't be changed in short term.The industry expectationChinese famous brand Lenovo which was just founded in year 2002 was a shinning star from drastic competition and became the second big brand in domestic market share, it really brings the new hope to domestic industry. The fast development in short term ascribed to Lenovo group's long-term strategy and the enhancement of marketing trend control. Whereas, it will be a long way to go for domestic mobile phone industry to research and develop hightechnology and walk out of downturn.Nowadays, products update very fast, it calls for new technology from domestic enterprises: on the one hand, smart phone is really a new opportunity and challenge to domestic enterprises and design houses. On the other hand, during the transition to 3G technologies, there are uncertainties from technology as well as enterprise management capability.In the past, management domestic enterprise mainly focused on product development, and ignored the market requirements. Moreover, they paid more attention to single project rather than overall strategy. They should have overall management, change old strategies and change the shortsighted performance from self-research and development, supply chain integration, channel control and selling management.Domestic mobile phone industry is changing from wide management to intensive management and completes the transformation from growing period to mature period.