Mainland China and Taiwan are expected to account for at least 29 percent of the worldwide shipments of mobile phones in 2005. Aggregate exports from both supply markets are projected to reach 222.80 million units in 2005, a growth of 11 percent from the combined exports of 200.01 million units in 2004.

The Industrial Economics Knowledge Center (IEK) of Taiwan's Industrial Technology Research Institute (ITRI) estimated worldwide shipments in 2004 at 680.5 million mobile phones. The IEK projects a growth of 10 percent toward total shipments of 750 million units by the end of 2005.

Industry forecasts from market research firm IDC place worldwide shipments of mobile phones in 2005 at 760 million units. This is a 10 percent growth from 2004 worldwide shipments of 692 million mobile phones. IDC predicts the market growth rate will start slowing and stay at 5 percent compound annual growth rate (CAGR) through 2009.

Gartner provides more bullish forecasts, estimating total shipments in 2005 to reach 779 million units, 16 percent higher compared to the 671.5 million units shipped in 2004. The market research firm expects accelerating sales of next-generation phones to help drive market growth. It predicts 100 million 3G phones to be sold in 2006.

iSuppli reported worldwide mobile phone shipments in Q1 and Q2 2005 totaled 170 million units and 181 million units, respectively, with each up by 2.4 percent and 7.1 percent over the same periods last year. Q3 and Q4 2004 shipments were estimated at 190 million units and 210 million units, respectively. The market research firm estimates total mobile phone subscribers to increase from 1.6 billion people in 2004 to 1.9 billion people by the end of 2005.

This report uses IDC's global shipment forecast of 760 million mobile phones for 2005 to calculate 2005 projections.

Overall growth in the worldwide mobile phone market, although slowing down compared to the double-digit growth of previous years, will be sustained by the thriving replacement segment in mature markets on one hand and an uptake in emerging markets on the other. Even as sales in key markets such as the United States and Western Europe are starting to dip, the release of more advanced multimedia phones based on 2.5G or 3G standards will drive growth in the replacement market. Meanwhile, rising supply of entry-level phones will fuel growth in emerging markets, particularly in mainland China and India.

These developments will be complemented by deeper mobile phone penetration in more developing countries, as aimed by the Emerging Handset Market (EMH) project of the GSM Alliance (GSMA). The project hopes to encourage mobile phone makers to develop and introduce GSM phones at entry-level prices — sub-US$40per unit — to make them more affordable to countries and regions where mobile phone penetration remains low.

All information contained in China Sourcing Reports is the result of exclusive, ground-level and definitive research conducted by Global Sources' analysts. Companies featured in these reports may or may not be clients of Global Sources.