China IP Phones Output To Increase 31%

Industry beancounters, Research and Markets, are counting on Chinese manufacturers to flood the market with IP phones in the coming years, according to its China Sourcing Report: VoIP Phones report.

The researcher says Greater China’s VoIP phone manufacturing industry is in a state of rapid expansion. The region which includes mainland China, Taiwan and Hong Kong is already the home of more than 600 VoIP phone manufacturers, but there are likely to be far more joining the competitive landscape over the next two years.

The massive increase in IP phone production is likely to be matched by growing demand and the increased activity will not only mean a significant investment in new product development throughout the region.

According to Research and Markets, during 2007 the projected combined output of the IP phone makers surveyed in the report is about 34.98 million units, representing a growth of 31 percent from their aggregate output of 26.68 million units in 2006.

The report covers only 50 or so of the 600 makers already in the market.

The report covers 51 makers of VoIP phones: 33 from mainland China, 12 from Taiwan and six from Hong Kong. Their projected combined export volume for 2007 is at least 27.03 million units, equivalent to 77 percent of the forecast production volume for the same year. This will mean a 24 percent growth from 21.80 million units of VoIP phones shipped in 2006.

Research and Markets believes these 51 companies represent a cross section of Greater China’s supplier base and come from a variety of product areas including VoIP standalone phones, USB VoIP phones, Wi-Fi enabled phones, Skype phones, and combination USB and standalone phones.

The researcher found that strong emphasis on R&D has resulted in new applications, in the form of more telephony programs and protocols supported, and enhanced product usability.

Whereas earlier-generation products supported only Skype, newer models can run a host of other VoIP programs and protocols.

VoIP phones now also combine mobile and entertainment functions such as MP3/MP4 playback, and even GPS tracking. Some models enable videoconferencing.
Other interesting findings in the report include:

  • Supply of Skype phones will continue rising, boosted by the popularity of Skype and the phones’ easy-to-use interface.
  • Although supply of USB phones will remain strong, standalone phones are projected to dominate the mainstream in the next few years. Combination USB and standalone phones are seen as transitional products bridging the gap from USB to standalone applications.
  • The growing adoption of Skype and similar telephony programs, supported by broadband networks worldwide, will prompt more makers to spice up the product line, prioritize R&D and boost exports.
  • Makers are integrating wireless technologies, such as Wi-Fi and Bluetooth, into an increasing number of products. However, it will take a couple more years before Wi-Fi VoIP phones breach the mainstream due to the high investment costs.
  • The convergence trend will speed up the rollout of new VoIP phones with multimedia and mobile entertainment capabilities.
  • SIP will be the prevailing protocol in 2007, although some makers will also use H.323, MGCP and IAX2.
  • Prices will drop in the coming months as supply grows and chipset costs drop.

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