Wi-Fi phone manufacturing is a new industry in China that currently has meager output but solid growth potential thanks to support from the government and telecom companies Most of the 15 or so suppliers in the country produce fewer than 1,000 units per month, with half of output exported to Europe and North America, where Wi-Fi network distribution is far-reaching.
Domestically, some telecom companies are setting up hotspots in major cities, including Shanghai, Hangzhou in Zhejiang province, Jiangsu provinceâs Nanjing, and Wuhan in Hubei province. These are found mostly in the metropolitan areas, with commercial establishments offering free or low-cost service. The major players began providing Wi-Fi solutions based on TD-SCDMA and CDMA2000 following the restructure of Chinaâs telecommunications system.
The Ministry of Information Industry, meanwhile, has allowed handsets with built-in WAPI to stimulate the market and boost the expansion of 3G communication.
Challenges, however, still abound amid the segmentâs promise. Topping the list is security concerns. Being a new technology, the Wi-Fi network is perceived to be vulnerable to wiretapping and computer viruses. Voice encryption is also an issue.
Further, Wi-Fi phones have smaller screens and lower processing capacity than PCs or laptops, limiting their capability for Internet browsing.
Dual-mode phones are also threatening the popularity of single-mode types, in which China makers specialize. Smartphones from Nokia and Apple are being equipped with Wi-Fi modules, and the trend is expected to continue.
In 2008, dual-mode Wi-Fi phones accounted for 3 percent of global handset shipments, a ratio that is expected to increase to 20 percent in 2010, according to In-Stat. Products can operate on GSM, CDMA and 3G networks and have mature function-rich chipsets.
With the worldwide trend for dual-mode versions growing, some China suppliers are planning to launch such models within the next six months. Recent releases already support GSM, CDMA and 3G.
Technical barriers are also hampering the line. China-made Wi-Fi phones still have high power consumption compared with other handset types. The standby time also does not exceed 150 hours, and voice quality leaves much room for enhancement in most models.
Still, makers are keen on improving the functionality of their products. Some are focusing on the standby time and call stability of new designs.
Suppliers produce mainly single-mode Wi-Fi phones and versions that emphasize entertainment features.
Regardless of the type, the core functions of Wi-Fi phones are the same, basically voice call, mobile entertainment and Internet connectivity. The current selections support 802.11b/g and SIP standards, and G711, G722 and G729 speech codecs. Wireless VoIP is also common.
Phone book and call logs are standard, as are SMS, call reject/redial, caller ID, missed call indicator, vibrate alert and volume control. Some models provide handsfree, mute and earphone modes. Multilanguage support is optional in certain phones.
A few makers customize their products for commercial use. Featured supplier Dyna Technology Co. Ltd, for example, offers Wi-Fi handsets that operate well even in low-signal or poor-weather environments.
The company has also released an industrial multimode wireless handheld terminal designed for professional users. The device integrates various functions, including those of data terminals, two-way radios, mobile phones and security alarms.
For some very secure wireless access points, phones are made to support WEP, WPA or WPS encryption to enter the network.
Wi-Fi video phones are currently not part of China makersâ output, but there are companies planning to release such models.
As the line evolves further, makers expect new IC solutions to emerge, including Wi-Fi with Bluetooth.
China companies produce mostly single-mode Wi-Fi phones. Low-end versions are priced from $60 to $100. These products have 1.5 to 2.8in touchscreen TFT LCDs, some with QVGA resolution.
Most have the basic call functions, including phonebook, call log scanning, speed dial and caller ID display. Some support handwriting input, mini USB charging, built-in flash memory and an audio or video player.
Midrange units, which are quoted at $110 to $150, usually have TFT displays measuring at least 3in. Add-ons include a 3.2MP CMOS sensor, an A/V player and memory that can reach 4GB or more.
Few companies produce high-end models, which exceed $150. Designs boast stable performance in harsh environments and are designed to resist water, dust, breakage and shock. Dynaâs industrial wireless handheld terminal is priced at about $400.
Makers predict quotes to decrease by not more than 5 percent or stay in the same level in the next six months.
Chinaâs Wi-Fi phone industry is composed of small and midsize suppliers. About half offer VoIP products. The rest also provides other types of mobile phones, IP PBXs and Wi-Fi AP/routers. There are also trading companies.
Over the past eight years, the line has seen makers entering and exiting it due to unstable demand.
The majority of suppliers have their own R&D departments that perform hardware, software and mold designing. Some focus on product development alone and outsource actual manufacturing to other local factories.
Subcontracting is becoming a trend in the industry because it reduces the risk of investment.
Key components are largely imported. Broadcom, Intel, Marvell and Samsung are the major sources.
Most Wi-Fi phone makers are based in Guangdong province, the Yangtze River Delta region and Beijing.
Telecom giants Huawei and ZTE are among the major enterprises engaged in the line, and are both capable of providing complete Wi-Fi solutions.
This article "WiFi phones: Makers predict growth in Wi-Fi phones as infrastructure expands" is originally posted in Global Sources.
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