Domestic shipments of 3G handsets in China are expected to amount to 42.97 million units in 2010, up from 7.2 million in 2009, according to iSuppli. The research firm attributed the significant growth to aggressive subsidies from wireless carriers.
These subsidies, which make pricing of the 3G cell phones more attractive to consumers, are expected to drive up sales despite the lack of value-added data services for the TD-SCDMA air standard, iSuppli said.
"Chinese carriers plan to provide more than 50 billion yuan, or US$7.3 billion, worth of subsidies to promote the domestic 3G handset market in 2010," said Kevin Wang, director of China research at iSuppli. "Because of particularly strong subsidies, phones using the TD-SCDMA air standard that is backed by the Chinese government will generate the bulk of growth in 2010."
Domestic shipments of TD-SCDMA phones in China will rise to 20.4 million units in 2010, up from 1.3 million in 2009, according to Wang.
iSuppli believes that over the next five years, ongoing voice service fee reductions and declines in ASPs for handsets will assure the continued growth of China's mobile subscribers - an immense base that topped 727 million at the end of 2009, following the addition of 108 million new users during the year. By the end of 2014, iSuppli forecasts that Chinese wireless subscribers will grow to 1.1 billion people, with 3G subscribers to reach 230 million.
Driven by carriers' subsidies, newly added user and replacement demand, iSuppli estimated that domestic handset shipments will increase to 266 million units in 2010, up 11% from 2009. Besides 3G handsets, smartphones will be one of the hottest products in 2010.
To promote 3G data services, operators are building a new ecosystem leveraging mobile application stores and smart phones. To this end, China Mobile joined efforts with handset makers to develop an Android-based TD-SCDMA smartphone named Ophone - a move matched by international companies such as Samsung, LG and Motorola, which also introduced their own OPhones. Entering the fray is Nokia, which iSuppli expects will introduce its TD-SCDMA handset in the first half of 2010.
A popular feature for handsets in 2010 will be mobile TV, with China expected to adopt its home-grown mobile TV standard - known as CMMB. More than 230 cities had CMMB signals in China by the end of 2009. And to support TD-SDCMA, China's Ministry of Industry and Information Technology (MIIT) is not allowing the CMMB mobile TV feature on other mobile-phone air standards.
In addition, a mobile TV service fee for three years of 300 yuan has been announced by CMMB operator China Broadcasting Corporation.
Aside from mobile TV, iSuppli believes that Wi-Fi, GPS and NFC will become popular new features for handsets in 2010.
