2008 ended on a bleak note for Chinese mobile phone makers. After seeing double-digit expansion since 2006, the Chinese mobile phone market was down by nearly 3.4 percent from a year earlier. This is worrisome for the global market because China had been one of the fastest growing mobile markets, and this could mean bad times to come for handset makers, both those in China and abroad.
However, the news isn’t all bad. Analysts at BNP Paribas have forecast that Chinese handset makers will ship almost 300 phones to other emerging markets by the end of the year. Many of these handsets will likely remain in the Far East, but could reach the growing African and South American markets. Likewise, Vodafone is looking to China to produce about 35 percent of its handsets for 2009. And the word is that India’s Spice Mobile will also be look to China for sourcing of its handsets.
If suppliers can look to China to get the ball rolling on mobile phones, this could help get the global economy rolling too. Just before the holidays I had seen a report on how interconnected the global economy had become. A slow down in toy sales in the United States meant that China not only produced fewer toys, but also needed fewer boxes for those toys. The demand for less boxes in turn hurt the recycled paper market in the U.K., which according to the news report had become the largest supplier of paper to China. So if the U.K.’s Vodafone looks to China to produce more phones, China’s box makers could be back at work soon making the boxes for those handsets, and thus things could get moving.
Meanwhile, China’s state council also announced as 2008 was coming to a close that it had approved the issuance of long-awaited licenses for next generation (3G) mobile networks. According to Reuters, the licenses would be issued for the TD-SCDMA standard backed by Beijing, as well as the more globally accepted standards including WCDMA and CDMA 2000. For business travelers this makes it easier to use 3G phones in China. So it looks like the world is (slowly) getting just a bit more connected.