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Growth defines China's smartphone, display markets

Posted: 26 Mar 2007 ?? ?Print Version ?Bookmark and Share

Keywords:China smart phone market? smart phone market report? China LCD market?

China's market for smartphones and displays posted growth in 2006, according to the reports of local-based consulting firm CCID Consulting Co. Ltd.

In 2006, China's smartphone shipments amounted to 10 million units. The market posted revenues of $5.17 billion, more than double in 2005.

For the display segment, shipments reached 23 million units, up 22 percent from 2005 figures. Sales revenues rose to $3.8 billion, up 17 percent y-o-y. Of this figure, sales of own-brand products reached 10.441 million, up 21.3 percent y-o-y. Meanwhile, sales of OEM monitors reached 12.642 million, up by 22.9 percent.

Smartphone on the rise

According to CCID Consulting, the smartphone segment continues to grow since its introduction in the local market in 2003. Last year, there were 120 smartphone models, up from just over 30 in 2003. Prices for best-in-class models range from $129 to $517. For comparison, 2005 prices range from $316 and $410. According to CCID Consulting, the price drop was driven by strong sales of low- and middle-end smart phones in the local market. Nokia and Motorola meanwhile continue to dominate the smartphone market with over 90 percent market share.

In addition, CCID Consulting forecasted that mobile phone makers will open more market segments based on their own offerings and in relation to consumers' potential demands. Presently, market segments such as GPS navigation, push-mail and information security have started to take off. In Beijing, the Chengguantong (All-in-One Municipal Administration) smartphone is being promoted on a large scale.

Shifts to LCD
China's display market continues to grow, with no distinct seasonal differences. Quarterly market sizes for the display segment were 5.112 million, 5.476 million, 6.403 million and 6.092 million, respectively. LCD sales continue to grow, while the CRT monitor market began to slide from Q3.

CRT monitors entered the downward channel in 2005 and slipped even faster in 2006, marking a decrease of 12.2 percent and a sales volume of 10.099 million units. Local brand sales hit 4.484 million units and OEM sales topped 5.615 million.

CRT market size dropped drastically. Share of 15-inch CRT monitors accounted for merely 0.8 percent of the display market, down 50 percent y-o-y. The proportion of 17-inch CRT monitors slipped from 89.1 percent to 83.4 percent. On the other hand, share of 19-inch CRT monitors (mostly pure flat monitors) increased from 9.1 to 15.4 percent. Sales of these products reached 689,000 sets, up 40 percent y-o-y.

Meanwhile, China's LCD monitor subsegment continues to grow. According to CCID Consulting, LCD monitor shipments hit 12.985 million units, up 75.6 percent from 2005. With the drastic cuts in LCD monitor prices, replacements from CRTs to LCD sets intensified. In 2006, LCD monitors overtook CRTs as the mainstream product of the market as the LCD proportion rose to 56.3 percent, up from 39.1 percent in 2005.

Moreover, 19-inch LCDs were replacing 15-inch products on a universal scale and swept a much bigger proportion of the market, according to CCID Consulting.

Up for growth

This year, CCID expects OEM monitor segment will increase at a much higher rate than the own-brand sector. Growth rate is forecasted at 16.9 percent. CCID Consulting sees China's monitor market will exceed 26 million units in 2007. Due to specific product upgrades and structural change, revenues will grow faster than sales and will record hike of 11 percent.

LCD monitors will also continue to grow this year. According to CCID Consulting, LCD sales will reach 20 million in 2007, accounting for over 70 percent of the local display market.

Meanwhile, due to low demands, CCID Consulting sees sales of 19-inch CRT monitors slipping, as the segment enters the final stages of the product cycle. The consulting firm sees CRT market share depleting with reduction rate exceeding 30 percent.

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