Dual SIM phones

	Model K550 from Mastone Communication and Electrical Development Co. Ltd has a built-in 0.3MP CMOS camera and FM radio; it supports Bluetooth and multimedia playback.

Makers step up development of feature-rich, multimedia models with touchscreens, cameras and Bluetooth.

Dual-SIM GSM phones make up a huge percentage of China’s GSM-driven mobile phone supply market. Makers estimate dual-SIM GSM phones accounted for 51 percent of China’s total GSM phone output in 2008—or 200 million units out of 388.6 GSM phones. In terms of the region’s total mobile phone production, dual-SIM GSM phones have more than 30 percent share.

Global trends moving toward 3G, 3.5G and even 4G will, however, push dual-SIM GSM phones out of the spotlight in the next few years. The anticipated slowdown in the worldwide mobile phone market will also affect growth in this segment. Makers in China do not see significant production expansion in this line in 2009, although supply will remain strong and product development, active.

The product line’s sustainability, according to makers, will lie on its core advantage and GSM’s continued dominance in the worldwide mobile phone market. Suppliers ride on the flexibility that dual-SIM GSM phones afford users in terms of choosing telecom carriers based on the quality and cost of their network service, and ensuring continuous communication and seamless network switching.

Locally owned China mobile phone suppliers are, thus, expected to continue carrying a wide range of dual-SIM GSM phones in their product roster. At least 80 percent of local makers’ mobile phone production is composed of dual-SIM GSM phones. It is mostly the foreign-owned or foreign-invested companies that will increasingly move away from the line to focus on other phone technologies.

China makers currently offer three types of dual-SIM GSM phones: dual-SIM single standby, dual-SIM dual standby using dual chips and dual-SIM dual standby based on a single chip. The first type contains two SIM cards, but only one is active. Earlier generations of this type of phone requires users to restart the phone to be able to switch to another SIM card. This type is based on a single-chip solution.

Dual-SIM dual-standby phones built around dual chipsets are basically a combination of two handsets. Phones in this category have two RF chips, two baseband chipsets and two protocol stacks. To prevent signal interference, the two antennas have to be installed at the two ends of the phone. Nearly double in power consumption and cost, these phones are regarded as offering real dual-SIM solution as users can make phone calls between the two installed SIM cards.

Dual-SIM dual-standby phones using a single-chip solution comprise the third type. Introduced by Spectrum (now Spreadtrum Communications Inc.) in 2007, this type of phone comes with one RF chipset, one baseband chipset and two protocol stacks. Compared with the second type of dual-SIM GSM phones, the cost, power consumption, size and even signal interference are lower in this phone type. Also unlike the second type, this phone does not allow users to dial SIM B using SIM A. However, an IC will switch between the two GSM networks seamlessly.

Dual-SIM dual-standby phones based on a single chip are currently the staple product type in China. The first type, dual-SIM single standby, is generally limited to the low-end market, and even there supply has been dwindling. High cost and power consumption have limited the production of dual-SIM dual-standby phones based on two chips.

The popularity of Apple’s iPhone influenced trends in China’s dual-SIM GSM phone segment in 2008. Many makers designed their phones to resemble the iPhone. In addition to the external design, features and functions were inspired by the hot product, including user interface, gravity sensor, multimedia capability and multipoint touch feature.

3D interface and product integration are shaping up to become major trends. Some of the latest models of dual-SIM GSM phones support mini projectors, wireless cameras and electric torches. The wireless camera operates within 10m.

A few China suppliers started releasing triple-SIM (CDMA and two GSM) solutions in Q2 2008, but lukewarm market acceptance indicates this line will need to wait some time before fully taking off. Meanwhile, several suppliers forecast dual-SIM GSM smart phones will be the next trend. MTK plans to develop smart phone solutions with the help of Microsoft.

In the area of external design, nontraditional housings are emerging. Initial precursors of this trend include racecar, rocket and water cube phone designs.

In addition to the dual-SIM functionality, China’s dual-SIM GSM phones integrate a host of other features and functions.

Entry-level dual-SIM GSM phones generally have 1.5in to 1.8in TFT touchscreens, 300,000-pixel cameras, FM radio and MP3/MP4 players. These support QCIF resolution, Bluetooth capability and GPRS/WAP. Low-end products are quoted from $20 to $35 each.

Midrange models, which are typically priced from $35 to $65, have 2in to 2.8in TFT touchscreens and 1.3MP to 2MP cameras. These also support GPRS/WAP, MP3/MP4 playback, FM radio and Bluetooth. The standard resolution is QVGA. Some units incorporate mobile TV functions.

Models in the high-end segment range in price from $65 to $90 and are usually equipped with 2.4in to 3.2in TFT touchscreens, 2MP or 3MP cameras and Bluetooth. These have all the other functions and features of midrange models, plus gravity sensor, mobile TV and voice changer. Some models come with 3.5in screens.

Phone functions and features, the materials and components used, and maker’s manufacturing system are the factors that influence mobile phone prices. Units manufactured in internationally recognized mobile phone factories are priced 20 to 40 percent higher than those produced in small workshops. A fine mold can also cost a maker 30 to 50 percent more than a rough mold would. Brand new plastic is more expensive than recycled plastic, which could be used in low-end models.

China, the largest mobile phone manufacturing base in the world, has more than 1,000 mobile phone makers, most of which have OEM and ODM capability. Many factories are foreign-invested or foreign-owned, such as the facilities of Motorola and Samsung in Tianjin, and of Nokia and Sony Ericsson in Beijing.

The majority of China manufacturers are small and midsize companies with an average monthly output ranging from 1,000 to 100,000 units. Most companies produce 3,000 to 50,000 units per month.

To reduce their cost, most suppliers purchase their designs from mobile phone design houses and outsource mold tooling, plastic injection and SMT. Some outsource all production processes and concentrate on R&D and marketing. Makers whose average monthly output exceeds 100,000 units typically handle SMT and procure designs from mobile phone design houses.

Standard processes include PCB automatic SMT, two-way soldering, PCB testing and assembly, final assembly, integrated/aging/high-low temperature/button/humidity/drop tests and packaging. The key components and materials are LCD, chipset, camera module, flash and antenna.

In general, China-owned mobile phone makers account for a small share of the domestic China market, but dual-SIM GSM phone makers usually have partner companies that help respond to sudden spikes in demand. Small- and medium-scale suppliers market their products through agents, wholesalers and trading companies. They ride on current trends, focusing their product development on industrial design innovations and feature upgrades, such as games.

Large players leverage their strong technology advantage to release products that stand out from the competition. Companies that produce more than 4 million units a year have established a strong brand image in both the domestic and overseas markets. ZTE Corp., for example, has an annual production of 23 million units. To ensure continuous and repeat sales, players such as ZTE, Huawei Technologies Co. Ltd and Amoi Electronics Co. Ltd work with foreign telecom operators. These suppliers conduct rigid design and testing processes to guarantee high product quality.

The availability of turnkey solutions has lowered the technology entry barrier for mobile phone manufacture. It has likewise reduced R&D cost and product development turnaround time. Seventy to 80 percent of dual-SIM GSM phone R&D is taken by chipset development. Easy access to turnkey solutions has cut the overall development cycle, including design, mold tooling, material and component sourcing, trial production, testing and mass production, to 30 to 45 days. With the help of mobile phone design houses, startups and new entrants can also use the turnkey solution to manufacture dual-SIM mobile phones comparable with those developed by veteran suppliers.

The turnkey solution from MTK integrates popular applications and functions such as high-resolution camera, MP3/MP4 player, handwriting recognition and dual-SIM support. Solutions that were later developed by MTK and Spreadtrum included hardware and software, and packed multimedia and other applications into a single chip.

Turnkey solutions were previously the turf of small and medium mobile phone suppliers that develop them without license. However, the solutions have recently entered the production lines of mainstream mobile phone manufacturers. This development is expected to help bolster China’s standing in the worldwide market as a developer and producer of quality mobile phones.

Mobile phones remain as one of the leading electronic product exports of Hong Kong, with Customs data reporting that shipments during the first 10 months of 2008 reached 52.8 million units. The shipment value of $3.9 billion was 34 percent higher than the same period in 2007.

Hong Kong currently has more than 100 suppliers of mobile phones, including major publicly listed consumer electronic companies with large factories in mainland China and small suppliers that rely on assemblers on the mainland. Several companies provide at least one dual-SIM model, while some have dozens in their selection.

Dual-SIM GSM phones, as well as dual-mode GSM+CDMA versions, have been the most prominent offerings from Hong Kong suppliers in the past two years. Models from Hong Kong makers do not vary radically from the products of their mainland counterparts as they all use the same chipset solutions. With multiple functions already enabled in simplified IC designs, suppliers are able to focus R&D efforts on external design and value-added features. Makers in Hong Kong use solutions from MTK, Skyworks Solutions Inc. and Infineon Technologies.

TV phones comprise a subclass of dual-SIM GSM phones in Hong Kong. With digital mobile TV broadcasting gaining ground, some suppliers have already begun releasing models compatible with prominent standards, such as DVB-T and DVB-H.

The majority of available TV phones, however, are built with analog TV tuners, such as the MP-788 from Coby Electronics Co. Ltd. This dual-SIM, quadband GSM TV phone has a 3in QVGA touch panel, dual cameras, MP3/MP4 player, FM radio and built-in speakers. It supports microSD memory expansion and handwriting recognition. It can exchange data with two separate Bluetooth devices simultaneously.

Tintele Global Co. Ltd's TT-A968 dual-SIM mobile phone also integrates an analog TV tuner. This quadband GSM phone features a 2.6in touchscreen TFT display, 1.3MP digital camera, FM radio and MP3/MP4/DV player. Its Bluetooth 2.0 functionality allows it to connect with two different Bluetooth-enabled devices at the same time.

Most Hong Kong suppliers bundle as many accessories with their dual-SIM GSM phones. The standard items are earphones, charger, USB cable, pouch, strap and extra battery. Some models are compatible with accessories from some major phone brands. For instance, the TT-A968 phone from Tintele is compatible with a Nokia BL-5C battery, Nokia XBS bass earphone and Nokia AC-4 charger.

Moving forward, suppliers will continue to launch models with advanced features to further separate themselves from the tight competition. Some of the features being earmarked for integration into upcoming models are dual high-resolution cameras with optical zoom, enhanced movie playback, Java and Wi-Fi. High-end versions will integrate not only GPS receivers, but also A-GPS and eGPS.

Mobile phone design houses have become an important element of the mobile phone manufacturing industry in China. Without them, phone manufacturers will have to devote more time to product design instead of focusing on the mass production of their phones. Mobile phone design houses have also helped cut time to market for many companies.

Since the acquisition of the Philips Electronics R&D Center by China Electronics Corp., Shenzhen in Guangdong province has gradually become the center of China’s mobile phone design house industry. Some of the large design houses in Shenzhen are Shenzhen Ginwave Technologies Ltd, CK Telecom Ltd and Shenzhen Top Wise Technology Co. Ltd. Shenzhen also has more than 100 midsize companies and some small design houses that merely copy solution designs. Shenzhen-based design houses have offices and facilities at the Shenzhen High-tech Industrial Park and Tian’an Cyber Plaza, where the service centers of the upstream IC suppliers such as MTK, Vimicro and Anyka are located.

Next to Shenzhen, other key design house hubs are Beijing and Shanghai. Although companies based in these two cities are fewer than in Shenzhen, the cities have mostly large-scale design houses that employ about 1,000 people. These include Longcheer Holdings Ltd, TechFaith Wireless Inc., SIM Technology Group Ltd and Wingtech Group Ltd. With the exception of Wingtech, most companies use solutions from MTK. Wingtech uses Spreadtrum’s solutions. Longcheer and SIM Technology sell at least half of their design solutions to small and midsize suppliers of dual-SIM GSM phones in Guangdong.

To serve dual-SIM GSM phone manufacturers in Shenzhen, large-scale design houses in Beijing and Shanghai have set up branches in Shenzhen, but admit facing market challenges since 2007. Meanwhile, Shenzhen-based mobile phone design houses have been reporting uptrend in sales. Some companies are developing their own chip platforms, while others research PCB designs or copy mature designs.