Domestic shipments of 3G handsets in China are expected to rise by a factor of almost six in 2010, according to iSuppli.
The research firm predicts that domestic shipments of 3G handsets will rise from 7.2 million in 2009 to almost 43 million this year.
The increase will be driven by “aggressive subsidies” from China’s mobile operators, China Mobile, China Unicom and China Telecom, said iSuppli.
“Chinese carriers plan to provide more than 50 billion yuan ($7.3b) worth of subsidies to promote the domestic 3G handset market in 2010," said Kevin Wang, director of China research at iSuppli.
"Because of particularly strong subsidies, phones using the TD-SCDMA air standard, that is backed by the Chinese government, will generate the bulk of growth in 2010.”
iSuppli expects domestic shipments of TD-SCDMA handsets to rise to 20.4 million units in 2010, up from 1.3 million in 2009.
“[Subsidies..] are expected to drive up sales despite the lack of value-added data services for the TD-SCDMA air standard,” adds iSuppli.
The company expects China Mobile to increase its total subsidies to 30 billion yuan in 2010, up from 12 billion yuan in 2009.
It forecasts that China’s 3G subscribers will tally 230 million users by end-2014, with total mobile customers to number 1.1 billion.
Total domestic handset shipments in 2009, including 3G cell phones, amounted to 240 million units, up 8% from 2008, iSuppli found.
“Driven by carriers' subsidies, newly added user and replacement demand, iSuppli forecasts that domestic handset shipments will increase to 266 million units in 2010, up 11% from 2009.
“Besides 3G handsets, smart phones will be one of the hottest products in 2010.
“China's domestic smart-phone market is expected to amount to more than 26 million units in 2009.”