Taipei, Tuesday, March 28, 2017 00:43 (GMT+8)
partly cloudy
Taipei
23°C
Digitimes Research: 3-mode smartphones to dominate China entry-level market
Eric Lin, DIGITIMES Research, Taipei [Wednesday 2 April 2014]

When announcing its LTE product lineup in 2013, China Mobile originally set 5-mode support for five major networking standards in China as a basic requirement for its 4G products, but the company lowered it to 3-mode at the end of 2013, as most chipmakers were unable to supply 5-model single-chip products and Qualcomm, who was able to supply such chip solutions, was tough about its licensing fees.

The change allowed chipmakers such as China-based Spreadtrum and Leadcore Technology to join the LTE supply chain immediately. However, in early March 2014, after evaluating the market's demand/supply status, the telecom carrier decided to restore its original requirement and will only offer subsidies to 5-mode smartphones.

Since 3-mode smartphones carry much lower costs compared to 5-mode ones, Digitimes Research expects 3-mode smartphones' average selling price (ASP) to drop below CNY1,000 (US$161) by the end of the first half of 2014 and could drop to CNY800 in the second half, replacing existing low-price 3G and 2G smartphone products.

China Mobile will continue to subsidize 3-mode smartphones until the end of May and starting from June, the carrier will withdraw all subsidies and only give sales commission to smartphone vendors. However, Digitimes Research believes 3-mode smartphones will continue to replace existing 3G/2G handsets due to their pricing advantages.

Since cheap 2G and 3G smartphones still have high penetration rates in tier-2 and tier-3 cities of China, potential demand for handset upgrade is rather large. Spreadtrum's upcoming 3-mode SoC smartphone application processor (AP), set to be released later in April, and MediaTek's 3-mode baseband solution are both aiming for such a market segment.

Despite an end to subsidies from telecom carriers, demand for 3-mode smartphones will remain strong because of their low prices. The pricing advantage has been partly enabled by their sales through the Internet and some other special channels, which helps reduce marketing costs.

In terms of the LTE smartphone chip market prior to mid-March, Qualcomm's LTE chip shipments were contributed mainly by its Snapdragon 400 and close to 90% of LTE devices available in the market used the solution. The remaining share was contributed by Marvell.

As for other chipmakers, MediaTek's LTE AP plus baseband solutions have yet to ship, while Huawei's P7 using Hisilicon's LTE solution is also not yet available. Since most chipmakers are expected to release their 3-mode chip solutions later this month with related devices to become available in May or June, Digitimes Research expects Qualcomm's LTE solutions to account for 80% of China's LTE smartphone shipments in the first half of 2014.

Realtime news
  • ALi, Alticast team up for pay TV

    Bits + chips | 2h 8min ago

  • Cypress to raise flash prices on tight supply, say reports

    Bits + chips | 2h 25min ago

  • Lida expects rising demand for eco-friendly air compressor from China

    Before Going to Press | 2h 7min ago

  • Unity Opto Technology suffers net loss per share of NT$1.41 for 2016

    Before Going to Press | 2h 52min ago

  • Huawei Technologies sets prices for P10, P10 Plus

    Before Going to Press | 2h 55min ago

  • Digitimes Research: Car vendors focusing on adding autonomous driving solutions into ADAS

    Before Going to Press | 2h 57min ago

  • LG Display to supply 700,000 LCD TV panels for Samsung Electronics, says IHS Markit

    Before Going to Press | 2h 58min ago

  • Altek to deal out 2016 dividend of NT$0.80

    Before Going to Press | 3h ago

  • SerComm to deal out 2016 dividend of NT$4.20

    Before Going to Press | 3h 1min ago

  • China market: Gome to set up VR theater chain

    Before Going to Press | 3h 2min ago

  • Coretronic to deal out 2016 dividend of NT$3.50

    Before Going to Press | 3h 2min ago

  • E-Ton Solar Tech suffers net loss per share of NT$1.04 for 2016

    Before Going to Press | 3h 3min ago

  • HTC aims to ship 10,000 Vive applications in 2017

    Before Going to Press | 3h 5min ago

  • Digitimes Research: China robot industry developing fast, but runs risks of focusing too much on low-end models

    Before Going to Press | 3h 11min ago

  • Greatek building high-end packaging capacity

    Before Going to Press | 3h 15min ago

  • SMIC posts record revenues and profits for 2016

    Before Going to Press | 3h 15min ago

  • AMD looking to expand market share in PC market

    Before Going to Press | 3h 16min ago

  • HTC Vive to enter Thailand in 2Q17

    Before Going to Press | 3h 17min ago

Pause
 | 
View more
Global notebook shipment forecast, 2017 and beyond
Intel strategies in the mobile device market
Analysis of China revised domestic semiconductor industry goals
  • Wireless broadband developments in Southeast Asia markets

    As of 2013, the 10 ASEAN nations had a total of over 700 million mobile subscriptions, with the CAGR from 2003-2013 reaching 24%. This Digitimes Research Special Report analyzes the various mobile broadband markets in ASEAN and looks at the respective trends in 4G LTE development for those markets.

  • 2015 global tablet demand forecast

    This Digitimes Research Special Report provides a 2015 forecast for the global tablet market and analyzes the strategies of key market players such as Google, Apple, Intel, and Microsoft.

  • 2015 China smartphone panel trend forecast

    This Digitimes Research Special Report analyzes the strategies of key China-based major panel makers BOE, Tianma and IVO for attacking the different market segments through technology and pricing, and their relationship to local vendors Huawei, Lenovo, ZTE, Xiaomi and Coolpad.