China's mobile phone industry has been significantly affected by the global economic recession.

CDMA shipment volume slipped 7.8 per cent sequentially to 18.9 million units, down 3.4 per cent year-on-year, while CDMA phones' share of the industry's overall shipment fell to 10.8 per cent in the third quarter. In sharp contrast, Chinese shipments of GSM (Global System for Mobile communications) hovered at 155.1 million units during the third quarter, up 8.4 per cent sequentially and 6.4 per cent year-on-year.

According to ITIS, Chinese mobile phone shipments reached a volume of 175.2 million units in the third quarter of 2008, representing 6.2 per cent sequential growth and 4.3 per cent year-on-year growth. The industry's rate of expansion peaked in 2006 and has now slowed to mid-single digits.

Similiarly, Taiwanese handset sales have experienced a severe decline, with sales dropping to NT$1.822 billion in November, representing a 26 per cent fall compared to the same period in 2007. Analysts expect the market to contract further, with annual sales volume plummeting to less than six million units and monthly sales value totalling no more than NT$2 billion.

Despite grim economic conditions, Nokia maintained its first place sales volume lead in Taiwan with a market share of 29.4 per cent, followed by Sony's 20 per cent. Samsung, Motorola and LG were third, fourth and fifth, recording shares of 19.7, 9.1 and 8.5 per cent respectively.

Meanwhile, Taiwan's HTC has confirmed plans to expand its presence in mainland China where Nokia and Motorola control nearly 90 per cent of the smartphone and PDA phone market. Subsidary company CEO Chun-Liang Tung explained that consumer demand in China remained more stable than in other world markets.

Eric Chen, an analyst at BNP Paribas, forecasted that Chinese handset makers will ship 200 million phones to emerging markets by the end of this year - accounting for a total share of 18 per cent. In addition, Vodafone is expected to order 35 per cent of its handsets in 2009 from Chinese companies, including ZTE, Huawei, TCL-Alcatel and Foxlink. Other operators, such as India's Spice, are currently eyeing China as a source for handsets.

BNP Paribas has also announced high expectations for Mediatek's low-cost phones, which are set to hit the market in early 2009. The company shipped 84 million units during the third quarter of 2008, compared to 51 million units in the previous quarter. Mediatek's revenue is projected to be (TWD) 94.15 million this year ($2.86 million), TWD 111.75 million in 2009 ($3.4 million) and TWD 130.75 million ($3,984,580 million) in 2010. X

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