GfK Asia released its 2004 Pan Asian Mobile Phone summary, which shows the region’s dominant mobile phone market continued robust growth in 2004 with year on year volume sales up 19% and sales growth of 12% projected for 2005, reflecting the strong market dynamics of mobile phone technology in the region. Of the ten Asian countries surveyed (China, Korea, Taiwan, Hong Kong, Thailand, Malaysia, Vietnam, Singapore, Indonesia and India) by GfK Asia, China continues to dominate the market, accounting for 61% of all units sold and with volume sales up 24% year on year.
A notable development in the Chinese market last year was the resurgence of foreign brands, particularly outside of the leading 121 cities where foreign brands continued to perform strongly, increasing market share from 41% to 46% over the course of the year. Meanwhile in the leading 121 cities foreign brands have further consolidated their position posting a brand share increase from 60% at the beginning of the year to 62% in Q4. Taking the Chinese market as a whole the market share of foreign brands increased four%age points over the year to 58%. This growth in foreign brands at the expense of local brands is attributed to distribution expansion outside of the leading 121 cities and the successful retailing of high end products among the more affluent populations of the leading cities. There is also evidence that international products retain a technology advantage over local products.
But not all foreign brands had a successful 2004; the joint venture between Alcatel and TCL lost market share while Taiwanese brands failed to develop a market presence, which may be due to the greater brand loyalty among the established brands providing market entry barriers to new entrants. As of December there were 1,286 different models and 48 brands in China, an increase of 63% in the number of models in the twelve months from January 2004 and up 177% since January 2003. Aside from China GfK Asia also noted sales growth in other Asian markets, the most significant being Vietnam with a 62% increase, while Indonesian sales were up 43% and Hong Kong sales jumped 33%.
In a market that is driven by technology developments, sales growth in 2004 was driven by camera phones, which had entered the market in the last quarter of 2003. Across Asia almost three times as many camera phones were sold in Q4 of 2004 compared to the corresponding period in 2003. In the largest market, China, camera phones now account for 33% of total sales. The corresponding figure for Korea and Hong Kong is 90% and 75% respectively. But the new 3G technology has yet to have a significant impact on sales in the region. In Hong Kong, the only major 3G market at present, GfK Asia estimates sales were only around 100,000 units last year, equivalent to just 3% of total sales. The growth in 3G phones will only really develop once operators have maximized revenue streams from current mobile phone technology.