Despite a predicted 10.7% drop in global mobile handset shipments, China’s domestic wireless phone market is expected to grow by 7.7% this year, according to research firm iSuppli Corp. The company forecasts domestic sales of 239.1 million units in 2009, up from 222.1 million in 2008.

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Foreign handset OEMs represented 56% of China’s handset market in 2008. Nokia was the largest supplier, with a 37% market share. But Samsung expanded its share of handset shipments. Tianyu will continue to be the leading Chinese band in terms of domestic shipments.

The Chinese government will finally issue 3G licenses in 2009, said iSuppli. However, domestic 3G handset shipments will not increase dramatically during the year, with total domestic 3G handset shipments expected to reach 8 million units. Low-cost multimedia GSM and ultra-low-cost CDMA handsets supporting 3G and the China Mobile Multimedia Broadcasting standard also will be high-growth segments. In terms of total unit shipments, Huawei and ZTE are likely to be the leaders in the 3G market.

“China’s three wireless operators are attracting new subscribers by reducing service fees,” said Kevin Wang, senior manager of China research at iSuppli. “This will greatly contribute to demand from first-time buyers. New subscribers are expected to exceed 90 million in 2009. Furthermore, more existing mobile users will subscribe to a second number. Beyond that, the government’s broadened subsidy policy for consumer electronics purchases will stimulate demand in rural areas.”

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