Current competition in China's home market is tough, pricing war has become universal. As a matter of fact, a new mobile phone model can only keep its price for a few months before diving. Manufacturers have to release more and more new models to make profits. A new model's release is always accompanied by the diving price of existing products. Some manufacturers only depend on introducing new models to gain profits. The R&D speed is left far behind the market desire, hardware configuration upgrade, mobile application development, etc. Therefore, a new object --mobile design company was born.
In order to lower development costs, Chinese indigenous manufacturers transferred their handset design orders to indigenous companies. To make the mobile phones more familiar to Chinese customers, they start to buy out the domestic mobile phone design houses' design projects massively. During 2003-2004, Chinese mobile phone design houses achieved a prominent performance in China home market.
As of the beginning of 2005, China already has about 60 mobile phone design houses.
Successive increasing mobile design houses lead to more specialization in the market. At present, there are mobile phone software development companies, mobile phone hardware design houses, mobile phone style design companies, handset structural design houses upstream. Mobile phone software companies include handset interface software, games, office and network software, multi-media software, and other application software development companies.
Since 2004, growth of Chinese home market has been slower than before. Indigenous brands' market share has been declining. This has let to many design houses' bad performance, or even bankruptcy. The market trend is as follows:
Horizontal integration
1. Small and medium sized mobile design houses will merge with the big ones
2. Public companies will become multinational mobile phone design houses
Vertical integration
1. Mobile phone design houses are evolving to be mobile ODMs
2. Mobile phone design houses are evolving to be handset vendors with their own brands
3. China domestic design houses are evolving to be foreign mobile brands' Chinese R&D center
|
