China's mobile phone shipment dips

Mobile phone shipment in China took a slide in June compared to figures in the previous months, due to slow market demand and competition among manufacturers.  

According to a report by the China Academy of Telecommunication Research of MIIT released Thursday, mobile phone shipment dipped to 4.2 million, compared to 5.5 million, 5.9 million, and 6.4 million over the previous three months. 

Some smaller cellphone manufacturers in China have been cutting production on inventory and funding issues, according to a Sina news report, which cited a report by First Financial Daily. iiMedia CEO Zhang Yi told the Chinese newspaper many Chinese brands also were adjusting their pace to reduce the frequency of new product launches as they aimed for higher profit.

Zhang believed conslidation among Chinese mobile phone brands and manufactures would escalate in the following months.

Many domestic market players are struggling to stay afloat. Faced with falling margins and profits, smaller handset makers have been forced to closeand these have included veteran market players in the market who had been in business for over two decades. OEM cellphone manufacturers are competing for orders, some agreeing to lower their  profit to just 1 percent in order to secure the big orders.

A cellphone manufacturer told First Financial Daily that major local telcos, including China Mobile and China Telecom, were promoting mobile handsets priced between 299 and 499 yuan (US$48.7 to US$81.3), which basically cut off sales of other lower-end cellphone brands. The market was now a "playground for [well-known] foreign and domestic cellphone brands", he added.