Output of VoIP products in mainland China is expected to decline, a new research study published by Research and Markets reveals. The Irish research firm found that by the end of this year, unit production is projected to fall by at least 13 percent to 667,420 units from 764,210 units sold in 2004.

The study titled "VoIP Products in China" forecasts "slowdown stems from a surge in production in late 2003 and early 2004 as makers prepared for rising demand due to the announced deployment of VoIP services by providers."

Analysts believe that VoIP services are yet to take off on the mainland, causing manufacturers to not only face a huge inventory of products, but also needing to reduce their production to clear out the supply excess.

According to the report, "43 percent of makers in mainland China are based in Guangdong; and the rest are scattered in Hebei, Guangxi, Shandong, Shanghai and Zhejiang. The VoIP sector in mainland China is concentrated on a core of 20 makers, although there are over 50 VoIP suppliers in the country."

The research firm found that about 75 percent of the VoIP makers surveyed expect an increase of at least 94 percent in their output in the next 12 months. Specifically in Taiwan which has about 50 VoIP product manufacturers, volume production could reach 4.20 million units by year's endan increase of over 50 percent from last year. Analysts believe that the "technical strength of Taiwan makers and their ties with global VoIP giants make the island a major force in global VoIP manufacturing."

Despite these findings, VoIP service providers continue to ink partnerships that fuel the rapidly spreading technology in the Asian country. Today, TOM Online Inc. of Hong Kong and VoIP provider Skype announced they teamed up in order to combine TOM Online's mobile and Skype's Internet communications services to "further develop advanced communication and community features for mobile Internet platforms," noted the companies' news release.

Skype and Tom Online customized a simplified Chinese version of Skype launched in November 2004. Since then, the companies say that the co-branded software has attracted about 3.4 million registered users to date, making China one of Skype's top three markets.

Research and Markets

Johanne Torres is contributing editor for TMCnet. To see more articles by Johanne Torres, please click here.