CRI听力:100 Yuan Cell Phones Sold Well in Foreign Countries

Due to the grim situation of China's foreign trade in the first quarter of this year, most cell phone manufacturers in Shenzhen have decreased their prices in order to occupy the international market.

Wu Junli is the sales manager of a communication company in Shenzhen.

"These five models sell very well in middle eastern countries. Most of our products sold in the foreign market sell for about 100 yuan, or 10 to 20 dollars."

Wu says his company can sell as many as one million cell phones a year.

Shenzhen accommodates 75% of domestic cell phone makers, 60% of mobile phone design companies and 90% of cell phone underwriting companies. But the overseas sales of the 100-yuan-cell phones provide the main source of funds for most mobile phone companies in Shenzhen.

Wei Tao is the Sales Director of Global Market Electronics Commerce Company. He says most manufacturers use cheap cell phones to occupy foreign markets.

"China's mobile phone export volume ranks first around the world, but the prices are very low."

So, how much money can manufacturers make by selling 100 yuan cell phones? Xie Yufen, CEO of China BBB Global Purchasing Platform, says that some companies sell the products almost at cost price.

"The profit that can be made on a 100 yuan-mobile phone is very low, about 3 to 5 yuan for each handset."

Wu Tao says that the cell phone market is expanding both at home and abroad; but the profit margin is becoming smaller and smaller.

"I remember 2 or 3 years ago, the profit gained from overseas sales accounted for 10% to 20% of the price of the handsets. But recently, the profit only accounts for 3% to 5% of the total price."

These cheap cell phones are mostly sold to less developed countries and rural areas. Limited purchasing power makes it impossible for the manufacturers to raise their prices.

Xie Yufen says manufacturers therefore need to establish their brands at the high-end market.

"Cell phone manufacturers should place more emphasis on the research and development of their products. They should establish their own brand by increasing the technology content and providing better services. This is the healthy way for a company to develop."

For CRI, I'm Wang Xiao.