China’s largest vendor of 3G wireless equipment in 2009 was ZTE, which deployed 700,000 transceivers (TRX) in all three competing 3G wireless technologies and controlled more than one-third of the country’s total market at 35 percent, according to iSuppli’s analysis of the Chinese wireless market for manufacturers and carriers.
In the deployments involving the various contending 3G mobile technologies, ZTE was mostly at the forefront of activity, emerging as No. 1 in CDMA2000 and the China-only TD-SCDMA standard, and No. 3 in W-CDMA.
The other major player in China’s 3G wireless equipment market in 2009 was Huawei, which followed closely behind ZTE at 33 percent. A host of participants with single-digit market share then trailed the two giants, including Alcatel-Lucent, Datang, Ericsson, and Nokia Siemens.
CDMA2000
With the construction by carrier China Telecom of a 3G network blanketing 342 cities and more than 2,000 counties, ZTE and Huawei were the greatest beneificiaries of the massive deployment. ZTE had 42.4 percent share of the CDMA2000 market, followed by Huawei at 38.2 percent and Alcatel-Lucent Huawei at a distant third with 16.4 percent.
iSuppli believes that ZTE and Huawei will continue to gain more market share in the deployment of CDMA, which is primarily an American standard defined by the 3GPP2 consortium. However, average selling price (ASP) per TRX in this market will continue to decrease, reaching $2,200 per unit in 2010 before stabilizing at the point when outdoor deployment ends.
TD-SCDMA
Combining its previous TD-SCDMA, ZTE was the largest vendor for TD-SCDMA in 2009 with 34 percent market share. At No. 2 was Huawei with 27 percent, followed in third place by Datang with 18 percent. But with Huawei exceeding ZTE in the third round of tenders, competition in this market is likely to intensify in 2010.
ASP decreased significantly in 2009, plunging from $3,500 per unit to less than $2,000. iSuppli believes that the ASP will continue to decline in 2010, and that as the leading player in TD-SCDMA—an air standard currently confined to use in China—ZTE will face more challenges from archrival Huawei. Gross margins for TD-SCDMA networks will contract in 2010, reaching less than 40 percent.
By the end of 2009, China Mobile had deployed up to 500,000 TRXs, covering 200 cities in the TD-SCDMA market.
W-CDMA
The only 3G wireless arena in which ZTE was not the No. 1 equipment vendor was the W-CDMA market, where Huawei controlled 30.4 percent share, followed by Ericsson with 23.9 percent. In third place, ZTE had 23.6 percent share of the market.
Huawei will likely continue to benefit from the large-scale deployment of W-CDMA by China Unicom, whose network for this harmonized European-Japanese standard covered 335 cities by the end of 2009.
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