Taiwan branded handset vendors retreat from mainstream segment in China handset market

The dominance of international handset players in China have forced Taiwan-based branded handset vendors either to retreat from the mainstream segment or switch to other market niches in the China handset market, according to sources in Taiwan's handset industry.

BenQ recently indicated that it will gradually withdraw from the China handset market due to the concentration of international vendors as well as fierce competition from China's domestic while-box vendors, making the company the latest Taiwan branded vendor to suffer such a setback, the sources noted.

When BenQ launched its BenQ-Siemens dual-branded handsets in 2006, the company claimed that it would capture a 5% share of the China handset market in 2007, a scenario that has not been realized. However, BenQ will continue to promote its own-brand handsets in some targeted markets, including Taiwan, Southeast Asia and Eastern Europe, according to sources at BenQ.

Inventec Appliances, which previously claimed that it would capture a 3% share of the China handset market, has stayed away from the mainstream segment and instead is now focusing on the PHS (personal handy system) segment and dual-mode models such as GSM/PHS, GSM/CDMA or CDMA/PHS, pointed out market sources.

While Dopod has already catered to the smartphone segment in China, other brand vendors, including Asustek and E-Ten Information Systems (to be merged with Acer), are expected to follow Dopod's steps to also focus on the smartphone segment in the China handset market, the sources asserted.