China's multimedia (music & video) mobile handset market study in 2005

Multimedia handsets refer to mobile phones capable of obtaining and handling data, including such functions as Text, Graphics, Image, Animation, Audio and Video, in addition to voice services.

The handset industry has undergone three typical stages in its development,characterized by the upgrading of multimedia functions. At least another two upgrading stages are expected in the near future. Mobile phones will gradually turn from a communication tool to multimedia terminal.

Table: Development Stages of Multimedia Handsets

1. Chord ring tones were applied in handsets (2001- 2002), which led to the first handset upgrading tide, with monotonous tones replaced by chord;

2. Color screen replaced conventional black-and-white (2002-2003), offering users with a easy-to-use graphic interface, which marked the beginning of the second development upsurge.

3. Camera was integrated on handset (2003-2004), serving as one of the symbols of high-end products, ushered in the third golden era of development.

4. MP3 player-embedded handset (2005 -2006) led to the competition for the storage capacity and battery lifespan, which characterized the fourth tide of development

5. Application of video functions (after 2006) is expected to be gradually improved, so that the performance of handset (camera and video playback) will reach an unprecedented level. During the fifth development stage, handset of DV, MP4, stream media or TV is likely to be an option for users.

Source: RIC, 2005

The former three stages of technology progress have reshaped the image of handset as simply a communication device, with multimedia elements flowing in, the function of entertainment highlighted subsequently.

At the beginning of 2001, as chord ring tones satisfied people psychological needs, there occurred a tide of chords competition, leading by Samsung. The upsurge, lasted to 2003, eventually resulted in a ring tone downloading market of great potential.

In 2003, the occurrence of camera phone caught people's attention from chord ring tones. Thanks to the hot sale of camera phones, a competition of camera module upgrading occurred in 2004. However, as the entertainment function of camera phone (photos) failed to perform as widely as ring tone downloading, combined with the intervening of extra factors, users at present remained cool to the camera phone pixels. Overseas brands with 0.3 mega pixels sell better than domestic brands at mega pixel levels.

MP3 phone became the mainstream on the marketplace in 2005.

At the beginning of 2005, the market share of MP3 phones accounted for only 7.5 percent, compared with the 17 percent at the end of the year. According to Pday Research, the complete sale volume would touch 15 million. Year 2006 will see a burst of growth in music phone industry.

The development of music phones remains only a step through the multimedia handset development as a whole, the focus is bound to shift to video field followed music phones, and the next bestseller in the market will be DV handset, MP4 handset, TV and game phones.

Multimedia will no longer be the exclusive function of high-end handsets but the standard configuration for mainstream handsets in the future. The main reason is that the cost to add these multimedia functions is becoming lower and lower. As soon as the cost declines to below 10 dollars, users will accept completely and consider it worthy for buying it. Color screen, chord ring tones and cameras have become standard configuration one by one. And MP3 player is most likely to become the next standard configuration of mobile phones.