Executive Summary
China’s two-way radio industry experienced a slump in 2007, beset by rising manufacturing cost and the yuan appreciation against the US dollar. From about 130 makers in 2007, the supplier base dwindled to about 110 in 2008. Despite the slight downturn, China suppliers are optimistic that output will remain stable in 2008.
However, China companies that transact in US dollars are adopting real-time settlement for US dollar-denominated transactions or are asking buyers to convert long-term contracts into shorter term deals to lessen the impact of currency fluctuations. Instead of shipping their products to the US, many suppliers are also turning their attention to export markets such as Europe and Africa, where the product line is still thriving.
The negative external environment is further aggravated by skyrocketing prices of crude oil and raw materials such as plastic, iron, copper and aluminum. While some China manufacturers have absorbed the higher production costs, many are compelled to pass on the increases to their customers by raising export quotes in the coming months.
The following are some of the key trends that we see in China’s two-way radio industry:
- The majority of suppliers will raise their export quotes in the coming months by up to 10 percent. A number of suppliers, on the other hand, will either keep their prices unchanged or make some modest price cuts.
- Suppliers will focus on developing more durable and reliable products, which includes improving security, anti-interference, housing quality, battery durability and weatherresistance. Products will also have higher channel and memory capability.
- EU and Asia/Pacific will continue to be the most important target export markets for many makers. Fewer makers will ship products to the US.
- Capacity expansion plans are underway in the coming months. This is in line with makers’ plans to widen their product range to include more digital models.
This report covers the three main categories of two-way radios available from China: handheld, marine/invehicle and walkie-talkies. Handheld models account for the majority of output from China. Analog two-way radios are the mainstream product line. Currently, only a few suppliers can manufacture digital models.
These products can also be classified according to their applications. Products that are usually used in police and military operations and have applications in transportation, retail and other businesses and industries are categorized as professional two-way radios. Units for personal use and commonly adopted by small groups are referred to as civilian two-way radios.
The Industry Overview section discusses the challenges facing China’s two-way radio industry today. It highlights the measures suppliers are taking and their general outlook on the industry. It also discusses the industry composition and production hubs.
The Products & Prices section differentiates the types of two-way radios based on their applications and their corresponding features. The section also discusses component sourcing and pricing.
China’s supplier base is mainly composed of small and midsize companies that are mostly based in Quanzhou, Fujian province. While many China suppliers specialize in the production of two-way radios, some also produce other telecom products such as cordless phones, wireless repeaters and pagers.
