Top Cell Phone Manufacturers Struggle to Compete; Chinese Producers Gain Market share

    SHENZHEN, CHINA, May 09, 2010 /24-7PressRelease/ -- E-commerce sales have risen steadily over the past year. According to the US Census Bureau, e-commerce sales for the 4th quarter of 2009 were estimated at $35.9 billion, up 4.5% from the 3rd quarter. (Census) Global trends are similar, and e-commerce sales account for a larger percentage of total retail sales today than ever before. Electronics, particularly mobile phones, make up a large portion of these sales. While this may appear to be good news for major cell phone producers, many consumers have recently begun purchasing mobile phones from smaller suppliers. In the online marketplace shoppers can easily compare prices and features of brand name products, and often find comparable handsets at a lower price. Market research from 2009 reveals that increased competition has given the largest manufacturers in the mobile phone industry cause for concern.

Despite strong growth in the cell phone industry in the fourth quarter of 2009, not all major handset producers should feel optimistic. According to Gartner, a leader in IT research, mobile phone sales surpassed 340 million, an 8.3% increase from the fourth quarter of 2008. ( Gartner) However, major producers such as Nokia, Motorola, and Sony Ericsson lost market share. In fact, Gartner found that the "combined market share of the top 5 mobile phone vendors dropped by more than 4 percentage points in 2009." In some cases, the drop in total sales was substantial. Nokia alone lost over $30 million in sales from 2008 to 2009. Motorola saw their total sales cut nearly in half.

Much of the recent competition has come from China and India, where leading manufacturers have had to lower prices to compete with local producers. Wholesale manufacturers, particularly in China, have access to the lowest cost materials and a nearly endless supply of cheap labor. Additionally, the cost of shipping products across the globe has dropped considerably in recent years. Market leaders must now compete with foreign wholesale suppliers that offer to ship low-cost mobile phones anywhere in the world at no additional charge to the buyer. While many consumers still prefer to pay more for brands they know and trust, evidence shows an increasing number of people are shopping for bargains.

While Nokia and the other four largest cell phone manufacturers still racked up the vast majority of cell phone sales to end users, the trend from 2009 was unmistakable. The greatest increase in worldwide market share from Gartner's study was in the "other" category. This mix of smaller mobile phone manufacturers captured 24.7% of the market, more than a 20% increase from 2008. As low-cost manufacturing becomes more sophisticated, that percentage is likely to increase further.

Bigboxstore.com is one of top wholesale mobile phone distributors from China.

Website: http://www.bigboxstore.com

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