Grey handsets are not recognized or licensed by government regulators and
employ fake International Mobile Equipment Identity (IMEI) numbers. Producers
of these devices generally do not pay value-added taxes and, therefore, profit
illegally from their participation in the market.
This report provides a global assessment of the grey handset ecosystem, in
addition to considering the wider legitimate handset industry. A study of the
industry's history, value chain and market dynamics is presented. The report
also provides detailed market forecasts for grey and legitimate handset
shipments from 2012 to 2016, at a global, regional and country level.
Historical figures for 2010 and 2011 are also provided.
Driven by a growing popularity amongst cost-conscious consumers demanding
high-end features at affordable prices, ARCchart expects the grey market will
continue to grow over the next two years, eventually peaking in 2013, with
nearly 150 million shipments. In conjunction with legitimate handset
shipments, we expect grey handset shipments will witness a decline from 2013
onwards.
Topics of coverage include:
History of grey handsets
Industry dynamics
Grey handset value chain
Competitive advantages over legitimate handsets
Emerging trends
Grey smartphones
Health and safety concerns
Innovation and innovate products
Regulator attempts to curtail the market
Companies and organisations mentioned, discussed or reviewed include:
Apple
CK Telecom
HTC
Longcheer
Longyu
MediaTek
Motorola
Nokia
Qualcomm
Samsung
SIMCom
Spreadtrum
Texas Instruments
Tianyu (K-touch)
Wingtech
Answers and opinions are provided with respect to the following essential questions:
When will the grey handset market peak?
What are the factors driving the grey market?
How are grey manufacturers able to evade authorities?
Will Europe and North America see much grey handset penetration?
What proportion of the overall handset market will be grey?
Which country will be the largest market for grey devices?
How will the arrival of LTE impact the grey handset market?
What are the factors preventing regulators from a large scale crackdown?
Which region will experience the fastest grey handset growth in the coming
years?
Table of Contents
A. INTRODUCTION
A.1 A History of the Grey Handset Market
The Concept of 'Shanzhai'
MediaTek's "Total Solution" Chip
The Rise of Grey Handsets
A.2 Innovation & Innovative Products
A.3 The Grey Handset Value Chain
Chipset Manufacturers
System Integrators aka Grey Manufacturers
Independent Design Houses
Component/Tool Suppliers
Distribution Channels
A.4 Competitive Advantage over Legitimate OEMs
Marketing & Promotion Advantage
Size Advantage
B. INDUSTRY DYNAMICS AND KEY TRENDS
B.1 Issues Faced by Grey Handsets
Problems with Lawful Interception
Missing or Fake IMEI Number
Consumer Dissatisfaction
Grey Handsets as Counterfeit Originals
Inferior Reliability
Health & Safety Concerns
Lost Revenue Opportunities
Loss of Tax Revenue
Loss of IP Royalties
Loss of Operator Revenue
B.2 Emerging Trends
Penetration into Western Europe and North America
Prospects for LTE Handset
The TD-LTE Advantage
Move to the Market High-end
B.3 Government & Regulatory Crackdown
B.4 Issues Preventing a Large Scale Crackdown
Duplication of IMEI Numbers
Economics
Consumer Apathy
Widespread Adoption of Open OS Platforms
Grey Smartphones
Expanding Geographic Distribution of Facilities
Shrinking Facility Size
C. MARKET SIZE AND FORECASTS
C.1 Grey Handsets Market
When Will the Market Peak?
Regional Breakdown
Top Grey Handset Shipments Countries
Device Breakdown
C.2 North America Market
C.3 Asia Pacific Market
C.4 Western Europe Market
C.5 Middle East & Africa Market
C.6 Eastern Europe Market
C.7 Latin & Central America
List of Figures
Figure 1 - Innovation in the grey handsets industry
Figure 2 - The grey handset value chain
Figure 3 - Survey results of grey handsets health and safety considerations
Figure 4 - Global grey handset shipments: 2010 - 2016
Figure 5 - Global grey handsets and legitimate handset shipments compared:
2010 - 2016
Figure 6 - Global handset market breakdown, by grey and legitimate
handset: 2010 - 2016
