Shenzhen exported 82 million units of hand-held or car-mounted mobile phones valued at US$5.5 billion in the first half of 2009. That was up 11.6% and 21.5% respectively year-on-year, a real feat given the poor market sentiment as global economic conditions deteriorated last year.

Even more remarkable was the way the industry kept faith with unit prices; the average export price was US$67.7, up 8.8%.

With demand from US, European and other markets dwindling under the impact of the financial crisis, Mainland mobile phone manufacturers lost no time adjusting their marketing strategies and opening up emerging markets.

During this period, Shenzhen's mobile phone industry chain and supporting services have reached maturity through several key years of development. Basically, all spare parts are now available locally.

Shenzhen has been able to maintain steady mobile phone export growth, which now accounts for over 30% of the national total. Shenzhen's entire mobile phone export market is due to benefit from a successful first half of the year.

Export volumes continued to grow in June, with unit prices stable. Shenzhen exported 15.9 million cell phones in that month, up 27.6% year-on-year, or 9.8% quarter-on-quarter, the highest monthly figure this year and exceeding last year's monthly average of 14.9 million units.

Export prices were basically stable in the first six months, averaging between US$65 and US$70. Export prices fluctuated considerably during the same period last year, with price differences as large as US$18 per unit.

Volume exports from the processing trade have seen a marked growth. In the first half of 2009, Shenzhen exported 57.3 million mobile phones in the form of processing trades, up 31.2% and accounting for 69.8% of Shenzhen's mobile phone exports. Of these, 365,000 units were exported as bonded goods in transit, up 240%.

Foreign-invested enterprises contributed to over 70% of total mobile phone exports and private enterprises performed better than average.

During this period, foreign-invested enterprises exported 59.3 million mobile phones, up 17% and accounting for 72.2% of the total, while private enterprises exported 12.3 million units, up 24.4% and exceeding the overall growth rate by 12.8 percentage points.

Hong Kong is Shenzhen's biggest export market. According to Customs statistics, Shenzhen exported 29.3 million mobile phones to Hong Kong in the first half of this year, up 17.6% and accounting for 36% of the total.

This made Hong Kong its biggest export destination.

In country terms, exports to South Korea jumped from 7.18 million units to 19.75 million, up 170% and accounting for 24% of the total; exports to Venezuela reached 2.71 million units, up 7.5%; exports to Vietnam soared to 1.49 million units, up 780%; exports to Italy reached 701,000 units, up 180%; exports to France amounted to 380,000 units, up 7.9%; exports to Australia reached 279,000 units, up 38.5%; and exports to the UK totalled 268,000 units, up 18.8%.

What merits attention is that with the steady advance of science and technology and the significant lowering of entry threshold, more and more enterprises are entering the sector.

There were 226 mobile phone manufacturers in Shenzhen in the first half of 2009, although only 15 had the capacity to export over 1 million units.

Due to differences in the scale of operations, along with a lack of core technologies and poor design standards compared with foreign products, Mainland mobile phones can only compete at a low price with copycat products.

China's mobile phone market is poised for the commercial 3G era.

China Telecom predicted that even if only half of its 2G subscribers are going to switch to 3G over the next few years, the switch will generate a market with a value of over Rmb300 billion. This will mean unprecedented market opportunities for China's mobile phone makers.

from Michelle Yuan, Shenzhen Office

(Image courtesy of Xinhua News Agency)