Shanzhai still holding the cards in China’s phone handset market

“Shanzhai mobile phones are not as popular as in the past. More and more people like 3G smart phones. Last year, I could sell at least 20 shanzhai mobile phones in one day, but now just 5 or 6…” a phone salesman in China informed the Global Times last week. As brand names become more popular in China’s major cities, the Shanzhai turn to rural areas. An IHS report is tipping they’ll still account for 255 million handsets in 2011.

Market Research firm, IHS Suppli has reported that smartphone shipments in China will rise by 53% in 2011. The IHS report says that domestic smartphone shipments in China will rise to 54.1 million units in 2011. ZTE will account for 10 million and Huawei 15 million.

IHS research director Kevin Wang said: "China's domestic smartphone market is booming in 2011 as prices for handsets and 3G services fall… Consumer demand also is being stimulated by the arrival of compelling mobile Internet applications."

Now if the domestic market shipments are going to hit 54.1 million and shipments of Shanzhai phones are expected to peak at 255 million units in 2011, that’s a pretty impressive gap in quantities and shows just how resilient the grey market in China is after the recent government crack downs. But … the IHS has predicted a fall in shipments for 2012 for the Shanzhai, to 213 million units.

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