Analysis: In China's smartphone boom, market share trumps margins

[Wireless News]

Savvy U.S. chipmakers are hitching their wagons to Chinese smartphone makers, willing to sacrifice profit margins to boost sales volumes in the world's second-largest mobile phone market. As demand in developed economies stagnates, a handful of component suppliers, including Qualcomm Inc and Synaptics Inc, have left competitors in their wake by expanding in China, where sales of cheap phones made by home-grown companies eclipse pricier models made by Samsung Electronics Co Ltd and Apple Inc. Increased exposure to China has diluted chipmakers' gross profit margins to somewhere in the mid-40 percent range from an average of nearer 50 percent in developed markets, analysts estimate. "The guys that have traditionally been focused on the developed markets are now starting to see a slowdown," said Stewart Stecker, research analyst at asset management firm AlphaOne Capital Partners. "The guys that are most focused on emerging markets are seeing healthy growth rates." Brisk demand for low-priced Android devices in China was the main driver of a 39 percent jump in global smartphone shipments during the quarter ended September 30, according to data published by market research firm IDC.

More... (http://news.yahoo.com/analysis-chinas-smartphone-boom-market-share-trumps-margins-115845948--finance.html)