IDC: 2014 Technology Outlook for China’s Growing Mobile Phone Industry
19 Feb 2014
Beijing, February 19, 2014 –According to the International Data Corporation (IDC)’s China Quarterly Mobile Phone Tracker (2013 Q3), China’s smartphone shipments are expected to reach 420 million units in 2014, with a year-on-year growth of 19.8%.
“China's smartphone market will remain relatively high growth in 2014, but its growth rate will drop dramatically compared with the 63.6% growth rate in 2013,” says James Yan, Senior Analyst of Client System Research, IDC China.
He explains that an increase in smartphone penetration is likely to be the main cause of the slowdown. Once smartphones are popularized, they are bound to be updated and replaced.
In addition, telecom operators will put forward even higher requirements for hardware configuration of customized new model products in 2014, such as: 5-5.5 inch High Definition (HD) screen, quad-core high-frequency, multi-mode and multi-frequency.
“Accordingly, the mobile phone vendors will need to adjust their strategies constantly to meet the needs of telecom operators. As far as the end users are concerned, price cuts and entries of large number of new models into the market will give them more options.”
Yan believes that in order to attract the end users and accomplish higher sales targets, the vendors are likely to carry out more diverse market activities and competition in China’s smartphone market in 2014 will become more intense.
To stand out in such a competitive market, innovation in technology is an absolutely must. IDC believes that China's mobile phone market will show the following technical innovation trends in 2014:
1. The vote of mobile phone chip vendors for five or multi-mode 4G chip platforms will boost innovation in the mobile industry. 4G chips may not only drive business growth of mobile phone vendors and telecom operators, but also promote innovation in related phone components and mobile services; they may even change the way people use mobile phones. 4G technologies have two standards: FDD-LTE and TD-LTE. IDC forecasts that the 4G mobile phone market in China is likely to first focus on the deployment of triple-mode 4G chips at its early stage. Upon technological maturity of chip vendors as well as improvement of network deployment, there will then be more chip vendors to release five or multi-mode 4G chip platforms. In short, integrated five or multi-mode 4G chip platforms will gradually become the dominant configuration of mobile devices.
2. 2K screen resolution with Low-temperature Poly-silicon (LTPS) technology will be adopted by more high-end smartphones. More end users have begun to use large-screen smartphones to watch high-definition videos, and high-definition screen is the basis for good mobile video experience, so the vendors’ demand for high-definition screen is witnessing a rapid growth. IDC estimates that more mobile phone vendors will adopt emerging 2K LTPS screen in 2014, with not only higher resolution, higher color saturation and lower cost, but also less power consumption.
3. The application of Optical Image Stabilization (OIS) technology in high-end smartphones will be put under the spotlight. Smartphone cameras have evolved from 2 million pixels to 16 million or even higher pixels, which has been very difficult to have a breakthrough over, while the users’ demand for image stabilizer remains strong. IDC estimates that cameras adopting the OIS technology will be given priority in the smartphone development in 2014. The OIS relies on special lens or structures of CCD sensors to minimize image instability caused by users’ movements. Compared with the electronic image stabilization, the optical image stabilization enjoys better effects.
4. Collective collaboration among telecom operators, device vendors and financial system is required in order for NFC technology to gain popularity. While there had been some NFC-enabled mobile phones in 2013, few voices were heard in NFC technology market due to lack of promotion by large-scale enterprises and extensive cooperation among up-and-downstream players. Additionally, the limited applications of NFC technology failed to meet the increasing demands from the users. IDC believes the premises of application and popularization of NFC technology in smartphones are the reasonable allocation of multi-party interests in the supply chain, and the initiation and lead of industry-pioneering companies.
5. Bending technology holds promise for the future of mobile phones. The application of bending technology in mobile phones is mainly manifested in: bendable screens and batteries. Currently some breakthroughs have been made in these two bending technologies, alongside with many challenges as well. For example, with screens being bent, it is difficult to maintain high resolution and color purity quality. At the same time, mass production with lower cost will be the key, which poses a challenge and also presents an opportunity for the bending technology. IDC does not believe that the bendable phones will score large quantity shipments in China’s market in 2014, but is optimistic about the future prospects of this technology.
6. The application of dual smartphone operating systems will facilitate different experiences for users. Dual operating systems have already been applied on some phones, but the real dual smartphone operating systems are rarely seen. IDC expects that in 2014, competition in the smartphone operating system will be even more intense. Vendors, out of need for innovation and business expansion, will try to develop two operating systems on a single smartphone. The application of dual operating systems will provide users with different and fresh experiences. Meanwhile, multi-operating systems will also provide more space for the development of cross-platform personal cloud service.
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