BEIJING: Fake handsets produced in China are flooding emerging markets such as India, Russia and Brazil to the detriment of branded manufacturers such as Nokia, says a new report.
China's 'grey' market phone shipments will soar to 145 million by the end of this year, an increase of more than 44% in a year, according to electronics research group iSuppi.
While small workshops in Shenzhen have been assiduously churning out counterfeit handsets fo more than five years now, they have sold mostly to the Chinese.
In recent months though, domestic makers such as Lenovo Mobile, TCL and Tianyu have begun hitting back with cheaper products and are now enoying market share growth at home.
In response, fake producers have upped the ante by adding additional features such as powerful speakers or even flashlights and are increasingly focussing their efforts on foreign shores.
Although a small proportion of the fakes end up in Western Europe, the majority of shipments are bound for less developed markets, the report suggests.
Says KevinWang, director of China Research for iSupp: "Margins in the grey market are being squeezed so producers have started exporting aggressively."
"While this will not damage the supply chain as such, it will be very damaging for Nokia."
Data sourced from Financial Times; additional content by WARC staff