BDA China Market Review: Portals Revived; Handset Competition Heats Up
Fortnightly market intelligence covering China's TMT sector produced by Beijing-based research firm BDA China exclusively for Hedgeweek readers.
Internet & Media: A rally in China's portals, mobile data and online game stocks has lit up the market. Despite the enthusiasm, the rumblings from China Mobile (NYSE:CHL) don't indicate any imminent relief for its sanction-hit partners such as Nasdaq-listed SOHU, SINA or Kongzhong (KONG) and the risks attached to SMS/2.5G mobile data revenues remain high. Following the fines/service suspensions imposed by headquarters in August and September, local branches of China Mobile (including Shanghai) have begun cracking down on spam or illicit content served up by local service providers (SPs). A new report published this week by BDA takes a look at China Mobile's long term strategy for mobile data and the implications for portals and other SP partners. To get in touch with BDA's Internet/Media analysts, click here.
Handsets: Following a component shortage in 1H, foreign and local handset vendors are making up for lost ground with waves of new models in the traditionally busy Q4 season. In new research out today, BDA looks at the likely winners based on the features and styles that are selling well. Competition in China is unrelenting, with NEC aggressively seeking market share with 20 new models by year end, and local brands scrambling to catch up.
Alcatel (NYSE:ALA), having already thrown in the towel for its handset business, is placing its hopes instead on its 45% stake in a JV with China's TCL which launched operations this week. The JV is allowed to use the Alcatel trademark for a period of 6 years, and will sell Alcatel brand phones primarily in North America and Europe, and TCL brand phones in China and Asia. TCL Communications (2168.HK), aims to regain market share lost over the past two quarters to foreign handset makers at home, as well as sell through Alcatel's international channel.
China's handset vendors are beginning to gain some traction in the international market, but vendors like NOK and MOT are not quaking in their boots just yet. Of the 73 million handsets China exported in Jan-Jul 2004, domestic manufacturers accounted for 3.7%. But this was up from 0.8% at end 2003, and domestic vendors have no choice but to continue to seek respite from thin margins at home through exports. To get the inside track on China's handset market, click here to connect with our handset analysts.
BDA China is an independent research firm based in China and focused on China's TMT sectors. BDA has a 10 year track record of offering on-the-ground research and analysis to investors and industry participants. BDA offers fund managers access to regular email alerts and analysis, detailed sector reports and analyst access via conference call or inquiry hours. For more information on how to subscribe visit
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