Chinese makers grow on low-cost mobiles

According to analyst Eric Chen, part of the bank's technology research team, companies such as Mediatek, ZTE, TianYu and Huawei are garnering nice shares of the market for ultra low cost (ULC) mobile phones. MediaTek itself designs chipsets for mobiles and will be unveiling a new chip soon, which will be smaller and offer handset makers more frills than what Infineon currently has to offer.

Chen forecasts Chinese handset makers will ship 200 million phones to emerging markets by the end of this year, accounting for a share of 18%. Chinese brands and unbranded handsets account for 130 million of the total 200 million phones shipped to emerging markets. BNP Paribas says Mediatek holds over 75% of the total GSM/GPRS chip market.

Operators are thinking about buying more handsets from Chinese makers, even though most operators such as T-Mobile and China Mobile buy most ULC mobiles for emerging markets from big, established brands such as Nokia and Samsung. Mr Chen states that Vodafone will order 35% of it's handsets from Chinese players ZTE, Huawei, TCL-Alcatel and Foxlink in 2009. Other operators, such as India's Spice, are currently looking to China for handsets. Samsung and Nokia will gain 15% and 50% respectively of operator orders in emerging markets in the third quarter of this year.

ZTE, the largest player in China, is planing on toppling either Motorola or Samsung within the next three years to become one of the three major maker of handsets worldwide. People's Liberation Army spin-off Huawei is expected to ship 20 million handsets this year, in comparison to 10 million in 2007. Huawei has been gradually switching from Texas Instrument designed chips to Mediatek in the last three quarters for it's 2G GSM and CDMA models. Chen noted Huawei is expanding aggressively in Africa.

BNP Paribas has high hopes for Mediatek's up-and-coming phones, which will hit the market in early 2009. Mediatek managed to ship 84 million units in this year's the third quarter, compared to 51 million units in the previous quarter. However, Chen sees short term inventory build up in the retail channel. Mediatek's revenue is expected to be Taiwan Dollars (TWD) 94.15 million this year (2.86 million US dollars), TWD 111.75 million in 2009 (3.4 million US dollars) and TWD 130.75 million (3,984,580 millon US dollars) in 2010. Net profit is forecast to grow from TWD 22.37 million (681,700 US dollars for this year to TWD 32.37 million (986,408 US dollars) for full year 2010.

source-http://www.itexaminer.com/chinese-makers-grow-on-low-cost-mobiles.aspx