The Trend of Chinese Two Way Radio in 2016

With the initiate of transforming analog two way radio to digital one, Chinese digital radio industry is facing a huge potential. In the next five years, China will update present 50 million unit analog walkie-talkies and at the same time meet the 5 million unit annual incremental needs. In the following five years, China has 75 million demands for walkie-talkies, if average price of per unit is 600 RMB then there is a 45 billion RMB market. The market has a huge potential and as long as manufactures can seize the opportunity.

There are some key points need to be focused in this great opportunity.

1. The analog and digital products will coexist for a long period. On the one hand, the analog product totally transforming to digital one is a major tendency. As the popularity of professional wireless communication devices, the consumers’ demands will also increase, and high-end customers will be more inclined to use digital products. On the other hand, the digitization of professional wireless communication devices is a relatively gradual and lengthy process. The analog products are more mature and have a reasonable price, therefore are still popular among developing countries and public utility user.

At present, the sales of digital products in China take about 29% in the whole wireless communication devices market, which is much less than the international average. The expensive price is the major reason and digital products just begin its promotion. On the contrary, analog products have mature technology and cheap price, therefore, still has a lot of demands in China.

2. Digital products have promising prospects. With the rapid economic development and popularity of wireless communication devices, the frequency resources are increasingly strained. In order to improve its developing conditions, some countries have published new policies. For example, the Federal Communications Commission (FCC) have come into a new regulation that from January 1, 2013, related department will no longer accept communication bandwidth mode that can not work in the frequency of 6.25kHz and no approval to application of such communication devices, cease analog radio type approval.

As the Chinese rapid economic development, in the following years, the professional wireless communications market will continue to increase. In 2016, the market size is expected to reach 9.53 billion RMB, the annual compound growth rate will be 14.5%. Form the international perspective, with the development of economy and society, as well as the public safety has been widely focused, the wireless communication devices have pervasive trend, therefore, the global professional wireless communications market will continue to develop steadily.

3. The industrial competition will be fiercer. Some foreign enterprises like Motorola are the world leading manufacturers. They have dominant advantages on making industrial regulations, patents and core technology, relying on strong brand and comprehensive strength to promote their products around the world and occupy the high-end market. In the meanwhile, these foreign enterprises are increasing their occupation on Chinese market.

However, the domestic enterprises are relatively small-scaled and the market is mostly concentrated in low-end products, the target consumers are price sensitive. The products rarely have innovations and only depending on cheap price to compete in the global market. Therefore, Chinese two way radio manufactures should make use of labor and geographical advantages, invest more resources and stimulate research and innovation, promote industrial upgrading.