White box phone market thriving

Vendors selling white box phones are challenging bigger brands in the low-cost handset segment, say industry observers who note that features on former sometimes trump those from established makes.

White box phones are on the rise and challenging established brands in certain parts of the market, said industry observers who add that such handsets even include features not available from the bigger players.

In a phone interview with ZDNet Asia, Mumbai-based Gartner's principal research analyst Anshul Gupta said white box phones are already challenging bigger players in the low-cost handset market. With their move to expand product lines to smartphones, these white box phone players can become a big challenge to established brands, he added.

He made a distinction between white box phones and gray market phones, explaining that white box phone makers have a legitimate business model in place. In addition, the phone has a proper International Mobile Equipment Identity (Imei) number, he added.

K.F. Lai, CEO of mobile media company BuzzCity, told ZDNet Asia in an e-mail that the firm's advertising network has seen a "substantial number" of white box phone users. In a Nov. 18 media release, BuzzCity announced that downloads by white box phones on its mobile game portal Djuzz increased from 8 percent in October to 20 percent in November.

In a Nov. 24 blog post, Gartner research vice president Carolina Milanesi noted that the government crackdown of black market phones has led to the perceived growth of white box phones. Last year, 70 percent of this product segment was sold in the black market or with fake Imei numbers, while the figure is reversed this year with 70 percent of such phones sold legally, she revealed.

Gartner's Gupta estimated that the white box phone market in Asia-Pacific is around 300 million units this year. China makes up a large portion of the manufactured volume with 200 million phones, while the rest come from other parts of the region, he added.

White box handsets more features
White box phones are popular in emerging markets, especially in the rural areas, as they are targeted at the specific needs of the consumers, said Gupta.

Like its white box PC counterpart, white box phones are cheap. However, unlike plain vanilla PCs, white box phones often include "amazing" features that are not available on handsets from established players, added Gupta.

Additional features on white box phones include 72-day battery backup, multiple SIM (subscriber identity module) card slots, support for the GSM technology, expandable memory slots and so on, he said.

BuzzCity's Lai added that the more popular white box phones offer QWERTY keypads and trackpads with navigational features similar to smartphones. "Many devices support video chat and come installed with a variety of online applications that are much sought after by consumers, such as Facebook, Twitter and instant messaging," he said.

Gupta also pointed out that white box phone vendors such as MicroMax and G'Five are spending a lot of money building their brands. Customers often see branding and aftersales service as a sign of quality, he added.