Motorola Inc, TCL Mobile Com-munication Co (TCL
About 20 million handsets may be languishing in warehouses and stores, according to sales figures from independent auditor Sino Marketing Research Ltd and production figures from CCID Consulting, an arm of China's information industry.
"With this level of inventory, the biggest threat to China's cellphone market is pricing pressure," said Lily Jap, an analyst at Nomura International (HK) Ltd.
"Handset average selling prices will probably drop about 20 percent this year," she said.
Prices have already slid more than a tenth this year in China, where Nokia Oyj, the world's No. 1 handset maker, Samsung Electronics Co, and other companies have factories. Competition for market share has intensified with the entry of TCL Mobile, Ningbo Bird Co (
Sales in China, which had an estimated 235 million mobile users at the end of June, rose an average 17 percent by volume in the past two years. Demand has slowed, worsened by the outbreak of SARS in the second quarter.
Handset sales rose 1.7 percent to 25.2 million units in the first half from a year ago, according to Sino, which collects its figures from 5,000 sales outlets in 150 cities.
CCID, which collects data from manufacturers without verifying their claims, said domestic sales reached 43 million units in the same period, though industry-watchers said the figure may not reflect actual sales to consumers. Cellphone production in China jumped more than half 82 million units in the first half, including 37 million units for export, according to CCID.
The combined market share of Motorola, Nokia and other overseas makers dropped to 58 percent in June from 68 percent at the end of December, according to Sino. CCID said overseas makers have only 45 percent of the market.
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