The grey market for cellphones will contract for the second consecutive year in 2013, with worldwide shipments dropping by 12% as both makers and buyers of these handsets turn to branded products.<\/p>\n
This is according to the China Research Service at information and analytics provider, IHS.<\/p>\n
Shipments reached their peak in 2011 with a total of 250.4 million grey-market cellphones. But beginning last year, the market began to shrink, contracting to 221.5 million units.<\/p>\n
The deceleration will continue in 2013 to 194.6 million units, followed by another steep fall to 173.8 million units in 2014. The decline will continue at least through 2017, when shipments will dwindle to 133.9 million units, IHS said.<\/p>\n
The grey market overall is impacted by an accelerated decrease in the sales of lower-end handsets known as feature phones. And while the ultra-low cost handset (ULCH) and smartphone segments of the grey market will continue to grow until 2014, expansion in these segments won\u2019t be enough to counteract the drop in the feature phone sector.<\/p>\n
A grey market is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.<\/p>\n
Grey market handsets, as defined by IHS, include counterfeit products like fake iPhones as well as white-box cellphones on which any logo can be readily imprinted.<\/p>\n
\u201cA combination of supply and demand factors is causing demand to decline for gray-market cellphones,\u201d said Kevin Wang, director of China research at IHS.<\/p>\n
\u201cOn the demand side, the consumers in emerging markets who used to be the major purchasers of gray-market cellphones increasingly are preferring brand-name handsets. On the supply side, some gray-market handset makers have become branded manufacturers in order to promote their own names in developing countries.\u201d<\/p>\n
IHS believes it is becoming more difficult for grey-handset makers to differentiate their products from a sea of counterfeits and remain profitable. And with the Chinese currency appreciating in value, the grey handset business is no longer as profitable as it once was.<\/p>\n
Getting the grey out<\/strong><\/p>\n Asia-Pacific, including China, is the largest grey-handset market in the world, and the devices have a strong presence also in India, Vietnam, Thailand, Pakistan, Indonesia and the Philippines.<\/p>\n The region, however, is not immune to decline, and the Asia-Pacific grey-handset market will contract this year to 103 million units, on its way to 53 million units by 2017.<\/p>\n The Middle East and Africa in 2012 surpassed Central and Latin America as the second-largest grey handset market, driven by increasing demand from countries such as Nigeria, Turkey, Egypt and Iran.<\/p>\n Grey-market handset shipments this year to the Middle East and Africa will decrease slightly to 38.2 million units, the IHS said.<\/p>\n Central and Latin America together represented the third-largest grey-handset market, with 37.3 million units forecast to be shipped in 2013.<\/p>\n Countries in Eastern Europe, such as Russia and Ukraine, also are major target markets.<\/p>\n Mobile future lies in emerging markets<\/strong><\/a><\/p>\nMore on mobile handsets<\/strong><\/h3>\n