Taipei, Friday, October 20, 2017 08:14 (GMT+8)
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
  • Asustek, Gigabyte reorganization efforts to bear fruit in 1Q18

    IT + CE | Oct 19, 17:43

  • White-box smartphone vendors highlight innovation in their new products

    Before Going to Press | 10h 1min ago

  • ProLogium, WM Motor partner to develop LCB-powered vehicle

    Before Going to Press | 10h 9min ago

  • Leadframe maker SDI resumes production at China plant

    Before Going to Press | 10h 10min ago

  • Backend houses expect rising memory demand for servers and datacenters

    Before Going to Press | 10h 11min ago

  • UREC seeking partnerships with local silicon wafer suppliers

    Before Going to Press | 10h 14min ago

  • Taiwan foundries enjoying rising orders from fabless firms

    Before Going to Press | 10h 17min ago

  • White-box notebook makers showcasing ultra-thin and 2-in-1 devices in Hong Kong

    Before Going to Press | 10h 21min ago

  • Taiwan analog IC firms to enjoy strong 4Q17

    Before Going to Press | 10h 22min ago

  • Epistar sues All Star Lighting Supplies for patent infrigement

    Before Going to Press | 10h 23min ago

  • TSMC raises IC market forecast for 2017

    Before Going to Press | 10h 25min ago

Pause
 | 
View more

China AMOLED panel capacity expansion forecast, 2016-2020

RESEARCH EXTRAS | Jun 8, 15:37

This Digitimes Research Special Report examines the China AMOLED industry, focusing on the expansion capacity of the makers, the current implementation plans of major smartphone vendors in the market and the technological hurdles faced by China's makers.

Taiwan server shipment forecast and industry analysis, 2017

TAIWAN MOBILE DEVICE | May 31, 10:20

According to surveys and analyses conducted by Digitimes Research, revenues generated from sales of server motherboards, servers, storage systems and related network system equipment by Taiwan-based vendors rose 4.8% on year to reach NT$555.8 billion (US$18.79...

Taiwan handsets – 2Q 2017

TAIWAN MOBILE DEVICE | Aug 24, 14:56

The revival of the Nokia brand by HMD Global is benefitting Taiwan's handset manufacturing sector. Orders for Nokia-branded feature phones have become a main growth driver for Taiwan's handset shipments.

China smartphone market and industry – 2Q 2017

CHINA SMARTPHONE | Aug 18, 14:38

Digitimes Research estimates smartphone shipments to the China market in the second quarter of 2017 totaled 94.1 million units, maintaining a similar level to that seen in the first quarter of 2017 but down 11.8% on year.

Taiwan LCD TVs – 2Q 2017

TAIWAN DISPLAY SYSTEM | Aug 14, 11:13

Taiwan TV makers' shipments to some of their China-based clients were weakened by rising LCD panel prices in the second quarter of 2017, during which shipments to China's financially-troubled LeEco had mostly stopped.

Global notebook shipment forecast, 2017 and beyond
Global AP demand forecast, 2017-2020
Global notebook shipment forecast, 2017 and beyond
  • China AMOLED panel capacity expansion forecast, 2016-2020

    This Digitimes Research Special Report examines the China AMOLED industry, focusing on the expansion capacity of the makers, the current implementation plans of major smartphone vendors in the market and the technological hurdles faced by the China makers.

  • Global AP demand forecast, 2017-2020

    Digitimes Research expects global AP shipments to surpass the 1.9 billion mark in 2017, with smartphones remaining the main application. Qualcomm will be leading the market in 2017, as other players continue playing catch up and scramble for funds to invest in more diverse applications.

  • Global notebook shipment forecast, 2017 and beyond

    This Digitimes Special Report examines key factors in the notebook industry, including products, vendors and ODMs, that will affect total shipments in 2017 and through 2021.