Cell phones: The cheaper the better

To attract mobile users in Asia Pacific, vendors should introduce low-price, entry-level handset models, as over 80 percent of handsets sold in 2005 would be to price-sensitive developing markets, said the International Data Corporation (IDC).

SINGAPORE--To attract mobile users in Asia Pacific, vendors should introduce low-price, entry-level handset models, as over 80 percent of handsets sold in 2005 would be to price-sensitive developing markets, said the International Data Corporation (IDC).

In its report--Wireless (Handsets) Device Market Forecast and Analysis 2000-2005--the market research firm predicted that developing countries, rather than developed countries, would witness the highest mobile subscriber growth, and this would be the major driver for the handset industry in the region.

"Less than 10 percent of the handsets sold in Asia Pacific (excluding Japan and Korea) are WAP- or ME (Mobile Explorer)-enabled. In fact, handset design and price, not added features/functionality, are key buying criteria among users in the region," said Rachel Lo, IDC senior analyst for Communications Research.

However, the market research firm maintained that it is also important to continue to launch "designer" models targeted at the high-end market so as to increase the average price point and create a premium brand name in the market place.

The IDC study revealed that handset sales in 2000 increased 45 percent from 1999 to 70 million units in Asia Pacific (excluding Japan).

The PRC (China), South Korea, Taiwan, Australia, the Philippines, Hong Kong, Malaysia, Thailand, Singapore and India contributed to 97 percent of the region's total sales with 67.5 million units. Actual consumption in the region was 78.7 million units, out of which nine million were parallel imports from other parts of the world.

China took second position in the worldwide market, after the US, with over 30 million handset units sold.

Lo said that many international vendors, such as Nokia, Ericsson, Motorola, Siemens, Philips, Matsushita Electric and Alcatel, have manufacturing plants in the PRC, causing local vendors such as Eastcom, Panda, and China Kejian to form alliances to compete with these overseas giants.

Nokia emerged as the Asia Pacific market leader in 2000, with close to 21 million handsets sold, capturing a 30.6 percent market share. Its success was attributed to its strong brand image and the presence of popular models with relatively long shelf life, said the IDC report.

Other leading brands Motorola, Samsung, Ericsson and Siemens together accounted for 47 percent of the market share. Siemens' market share increased from 4.5 percent in 1999 to 7.2 percent in 2000. IDC attributed this to Siemens' aggressiveness in brand creation and the launch of new models in the region.

Lo noted that Ericsson had a slight market share drop in 2000 (7.4 percent) compared with 1999 (8 percent), due to a "lack of model excitement".

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All