China Mobile's 4G expansion drives smartphone supply buildup in China
Phone makers and chip providers rush to keep up with network schedule
With a massive 4G network expansion under way on the mainland, the market's leading smartphone suppliers and their mobile chip providers are in a rush to keep pace with the rapid deployment in hundreds of cities.
Analysts see the 4G network roll-out being led by China Mobile, the world's largest wireless network operator, changing the competitive landscape for smartphones in the domestic market, where most of the country's 1.23 billion subscribers at the end of December were still tied to old 2G cellular infrastructure.
While Apple recently hogged the headlines by having China Mobile as a new carrier-partner for the iPhone, the domestic brands led by Lenovo, Huawei Technologies, ZTE and Coolpad were expected to step up their supply of cheaper smartphones to help the operator sign up more 4G subscribers nationwide, analysts said.
China Mobile, which had 767.206 million subscribers at the end of December, has targeted shipments of about 100 million 4G smartphones this year, including many models at the 1,000 yuan (HK$1,280) price mark.
If all those devices are connected to the operator's new high-speed mobile network, that would represent about 13 per cent 4G adoption within 12 months of launch, according to a report by Bernstein Research.
Ricky Lai, a research analyst at Guotai Junan Securities, said domestic manufacturers that had been producing mostly 3G smartphones aimed to boost their production of low-end 4G smartphones. These include TCL Communications, Xiaomi and Haier Electronics.