China\'s handset manufacturing industry shrank 12.7% in Q1, but will recover in Q2, according to the Taipei-based Market Intelligence & Consulting Institute (MIC).
Around 135.4 million mobile phones were produced in China in Q1. Local companies saw a 15.5% sequential production decline, which followed an 8.5% decline in Q4 2008, the MIC said.
Among international brands manufactured in China, production volume sank 15.7% sequentially to 73.8 million units.
Taiwanese manufacturers saw their production volume decline 35.6%, producing only 14.8 million handsets. Their share of the Chinese handset market fell nearly four points to 10.9%.
MIC blamed the economic crisis for the bulk of the decline, but said that Taiwan\'s industry was also impacted by shipment delays of the iPhone 3G in the build-up to the launch of the new 3G S.
Manufacturers are experiencing a slight reprieve in Q2, but the cancellation of the extended holiday period and the continuing effects of the economic downturn will limit market growth, MIC said. The MIC expects production to grow 8.7% to 147.2 million units.