The growth of mobile phone users and frequent replacement of phone cards create a huge demand for mobile communication cards. With the continued reduction of the mobile terminal price and mobile service charge, the China mobile phone service has been popularized thanks to the rapid growth of users in the last two years. At the end of June 2007, China mobile phone users exceeded 500 million. At present, mobile operators are providing several kinds of preferential service packages to better seize the mobile communication market and attract more loyal users. Many mobile phone users in China, especially users from the younger generation, often change their phone number in the same mobile communication net or between different nets to enjoy the benefits of promotional service packages for new users. In addition, in some provinces where the mobile communication market is insubstantially supervised, users often change their phone numbers to escape overdue charges. However, frequent mobile phone number changes also facilitate the growth of the mobile communication card.
The diversification of value-added services speeds up the updating of phone cards. Current mobile phones are not limited to existing voice service, and many value-added services have become new service growth points for operators. To meet users' varying demands for value-added services, the Ministry of Information Industry began to adjust the information service access code this April, replacing older, pre-existing codes since January 2008. Therefore, the old, built-in code in some SIM cards can no longer be used, but need to be replaced. Owing to this, mobile operators purchased more SIM cards in the second quarter in order to prepare for the card replacement in the second half of the year. The rapid growth of the mobile communication card sales volume in the second quarter put a great impetus to the rapid growth of mobile communication card market in the first half of the year. Furthermore, the sales revenue of the China mobile communication card rebounded in the second quarter of this year after suffering a drop for 5 consecutive quarters. The main reason is not only due to the growth of sales volume but also that the increase of the unit price of the updated cards contributed to the growth of sales revenue of the entire market.
The structure of mobile communication card products is relatively stable. In the first half of 2007, SIM cards still dominated the overall market with a proportion of 88.04%, while UIM and PIM cards featured a market share of 8.68% and 3.28% respectively. GSM-based data services dominate China mobile communication market, and SIM cards widely applied in G-Net constitute a great majority among the structure of mobile communication card products, which will not be challenged in short term. In addition, with the ceaseless improvement of CDMA services, the number of CDMA users has increased steadily. At the end of June 2007, the number of CDMA users of China Unicom has exceeded 40 million, much less than the number of GSM users. Therefore, the sales volume of UIM cards used for CDMA net is much less than that of SIM cards.
At present, mobile payment, a new application in mobile communication, is still in its infancy in China's market with its relevant immature technology, and the mobile payment market represented by NFC and SIMpass has not yet blossomed in large scale. Under these circumstances, some mobile communication card manufacturers have already begun to cooperate with upstream chip manufacturers and downstream operators in order to attempt to cultivate a new profit growth point in this new field. This cannot only enable enterprises to step out of the competition bog, but can also facilitate the diversified development of the mobile communication card to improve the competition of the product.
