China mobile phone suppliers are producing more smartphones and 3G models as they ride the trend for all-in-one functionality. Price cuts are another key strategy as competition intensifies.

This is according to Global Sources‘ China Sourcing Report: Mobile Phones. The report covers the major products of China’s mobile phone industry, namely 3G, GSM and smartphones, and projector and QWERTY variants.

The report shows China manufacturers are carving a niche with lower-priced models to avoid the high-end dominated by top international brands. Even so, their releases offer a range of features, depending on the model and price point. These include dual-SIM functionality, touch-screens, web browsers, cameras, TVs, FM radios, MP3/MP4 players, video recorders, e-book readers and games.

Products incorporate Bluetooth, Wi-Fi and GPS, support GSM, CDMA and 3G networks. Among smartphones, the Android platform is gaining popularity, thanks to its open source attributes. Even so, Windows Mobile 6.5 will continue to have a solid foothold. Small and midsize manufacturers of 3G phones are offering W-CDMA and CDMA2000 models in expanding their overseas presence.

The first continues to dominate supply. In the months ahead, R&D efforts are expected to emphasize even better price-to-performance ratio, especially as more suppliers target emerging markets in South East Asia and South America.

Publisher of the report, Livia Yip, said: “In our survey, 96 percent of suppliers see their 2011 export volume surpassing last year’s sales. Nearly half of manufacturers project increases exceeding 20 percent. Besides their release of features-packed models, optimism for substantial orders growth stems from suppliers’ success in cultivating emerging markets.

For many companies, shipments to new markets such as Southeast Asia and South America collectively now match their volume to the EU, traditionally the main export destination.”

China suppliers cut prices for advantage in new, traditional markets

The report reveals that as competition tightens, most China suppliers are cutting their prices to gain an edge. While reductions are generally at 10 percent or lower, some surveyed companies plan to drop quotes by as much as 15 percent to attract more orders. About one-third of manufacturers, however, feel the need to increase prices slightly to compensate for higher expenditure amid rising labor costs and the yuan appreciation.

While some raw materials are becoming more expensive, the falling cost of chipsets in particular is enabling manufacturers to reduce quotes. Companies are confident that their price advantage and heightened product capability should boost sales in emerging markets, the EU and North America, which ranks as China’s third-largest market for mobile phones.

Supplier profiles, price forecasts, and the latest mobile phones for export

The 62-page China Sourcing Report: Mobile Phones provides detailed profiles of 25 suppliers with verified manufacturing and export credentials, plus contact details of 16 more suppliers. It also includes a Product Gallery featuring 63 of the most popular export models, with key specifications and full-color pictures.

The report’s survey, price trends and supply forecasts aim to help buyers make better-informed purchasing decisions.

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