Asian Mobile Sales Top $22B as Color Camera Phones Continue to Dominate

(Top News, 24 Aug 2007)

Retail sales of color camera phones continue to dominate the mobile phone market across the 12 countries—mainland China, Hong Kong, Taiwan, Cambodia, South Korea, Singapore, Thailand, Malaysia, Vietnam, Indonesia, India and the Philippines—according to the 2007 Mid-Year Pan Asian Mobile Phone and Digital Imaging report of GfK Asia. Of the three categories assessed—color with camera, color displays without camera, and monochromein—in the Asian region, color camera phones reported an overall increase of approximately 44 percent in volume, with over 78 million units sold, and 28 percent increase in value, totaling almost $18 billion in sales from January to June 2007 when compared to the same time period in 2006.

Total Asian market phone sales for the region were up by approximately 39 percent in volume during the first six months of 2007 compared with the same period in 2006, with just over 149 million units sold so far this year. Gains in value were much stronger than for the equivalent period last year, with a value increase of approximately 21 percent in value, compared with just 4 percent increase in the first half of 2006 against the same period in 2005. The overall mobile phone market totaled almost $22.5 billion in sales in the first half of 2007. Stanley Kee, GfK's Commercial Director for Mobile Phones and Digital Imaging said: "In the first half of 2006, per unit values plummeted, driven by competitive pressures and high growth in cheaper monochrome handsets in particular country markets. While per unit values are still declining in the first half of 2007, the decline is slower than during the same period last year, because color handsets with cameras are gaining market share. The steadying of unit values has allowed the value of the total market to expand as the sales volumes continue to grow. Slider form handsets are increasing in popularity, and an increasing proportion of handsets offer the full 16M color range, enhancing the customer experience when using newer services such as streaming video from the internet."

While China continues to hold the lion's share in Asia in terms of overall mobile phone sales volume and value, with 77 million units sold in the first six months of 2007 and over $11.5 billion in retail mobile phone sales during the same timeframe, India also holds a significant share at 35 million units sold and over $3 billion in sales value in the first six months of 2007. China and India are growing at similar rates, with volumes up 46 percent and 44 percent respectively, and total sales value increases of 28 percent and 32 percent respectively against the same period in 2006. Volume increases have slowed overall, with not a single Asian country surveyed reporting more than a 50 percent increase in volume of sales in the first half of 2007 against the same time last year. All of the 12 countries surveyed reported an increase in both retail sales volume and value within the color camera phone category for the first half of 2007 against the same time in 2006, with the exception of Thailand and Korea, where volume gains were offset by declining average unit prices, resulting in negligible growth in sales value.

In South Korea, relatively flat sales values are a result of a mature market, with large declines in sales of monochrome units (-79 percent) and color handsets with no camera (-71 percent), and falling unit values in color camera handsets. In contrast, Thailand's growth in volume and sales value is occurring in the monochrome market (61 percent volume and 31 percent value increases), and the color camera segment has only grown 3 percent in volume over the same period in 2006.

The declining trend in sales of monochrome phones in the region turned around during the first half of 2007, driven by large volume increases in the largest market, China. Monochrome handset volumes in China increased by 74 percent against the same period in 2006, to over 10.3 million units. China's monochrome phone volume increase accounted for 4.4 million units of the total regional monochrome volume increase of 5.9 million units. "China is tapping into its vast pool of new mobile users in the more rural areas. These users are embracing the subsidized packages now available in the market. This is makes for great growth market for the lower priced monochrome handsets as these consumers enter the market," Kee explained.

The region's digital imaging market continued to grow steadily, with volume increasing 20 percent to 7.8 million units and sales value increasing 15 percent to over $2.6 billion against the same period in 2006. The increase was driven by steady growth in the majority compact segment (18 percent volume growth and 7 percent value growth) and very strong growth in the smaller digital SLR segment (77 percent volume growth and 68 percent value growth). China dominates the regional market, with 50 percent of the units sold in Pan Asia and 49 percent of the US dollar value of the total Pan Asian market.

For the first six months in 2007, as in the same time period for 2006, the majority of digital camera sales in Asia were in the compact category, but with DSLR volumes and sales values in China more than doubling over the same period in 2006, the DSLR segment is gaining market share.

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