Radio trunking systems

	The PX-888 and PX-777 from mainland China's Puxing support up to 128 channels, 4W to 5W power output and 12.5kHz to 25kHz frequency range.

Digital models in development stage; handheld radios remain strong despite influx of in-vehicle radios

Analog models continue to dominate production and exports of handheld two-way radios in mainland China and Taiwan. Although digital technology is slowly penetrating the industry and several makers in both regions have in fact begun developing digital units, mass production will not fully kick off until 2009 or 2010.

Handheld models remain the bread and butter of radio manufacturers, particularly in mainland China, despite the rising supply of in-vehicle two-way radios. Mainland China has about 130 makers that supply both handheld and in-vehicle two-way radios, but most companies focus on handheld models. Quanzhou in Fujian and Shenzhen in Guangdong provinces are the two major production centers for two-way radios in the region.

Fujian is home to 70 makers, 95 percent of which is based in Quanzhou. Most makers are small- and medium-scale companies whose products are targeted at the low-end and midrange markets.

Meanwhile, the majority of makers in Shenzhen are medium and large companies that can produce larger volumes of two-way radios.

Intense competition and small demand combined to shrink the supplier base in Taiwan to about 10 to 15 suppliers two or three years ago to less than 10 companies today. Some suppliers have left the line altogether and others have shifted focus to other product lines.

Most of the surviving suppliers in Taiwan are small and medium-sized companies. Many of them focus on developing professional handheld two-way radios, mostly targeted at fire fighting or system integration applications. Some Taiwan suppliers also provide in-vehicle two-way radios and two-way radio modules.

Data from the Taiwan Customs indicate continued decline in exports of two-way radios from Taiwan. In 2007, makers in Taiwan generated $4.52 million in export sales of walkie-talkies, a drop from $9.84 million in 2006. The volume export of walkie-talkies in 2007 reached only 60,190 units, a significant slide from 110,070 units the previous year.

Most mainland China and Taiwan makers expect analog handheld two-way radios to prevail over the industry in the next few years, although digital models will continue to gain market share. Besides makers' years of experience in developing and manufacturing analog units, this type of two-way radios has maintained a steady market and continues to be in good demand.

Only a handful of companies are currently offering digital two-way radios, which are about three times more expensive than analog models. Many companies have indicated plans of starting R&D or product development, but will defer mass production till demand rises substantially.

In addition to the high production cost in the face of small demand, makers admit they have yet to improve their technical expertise in designing and producing digital handheld two-way radios.

Most analog two-way radios adopt F3E modulation and feature CTCSS (QT), CDCSS (DQT) and alarm function. They support 136MHz to 174MHz or 400MHz to 470MHz frequency ranges, with 12.5kHz or 25kHz channel spacing. The units generally deliver 4W or 5W power output. Some units can also have adjustable power output. The number of channels varies depending on customer specifications.

Some of the large-scale companies have their handheld two-way radios comply with IP54 or IP67 for dust- and water-resistance. Makers also secure the necessary approvals for their two-way radios that are shipped overseas, such as CE for Europe, and FCC for the US.

Makers can supply handheld two-way radios for the entire market spectrum. Low-end models are mostly walkie-talkies or consumer-use models with a power output not exceeding 0.5W. These units feature LCD screens and digital keypads. Their price starts at about $30 per unit.

Midrange models are mostly professional-use two-way radios. These radios typically have 4W power output, although many models support from 0.5W to 5W power output with manual adjustment.

Most midrange and high-end handheld two-way radio models come from makers in Shenzhen, Guangdong.

The components and raw materials used differentiate high-end models from other categories.

High-end handheld two-way radios are generally designed to function well under various conditions, and thus have been tested to resist water and dust, and operate in both hot and cold temperatures.

Xiamen Puxing Electronics Science & Technology Co. Ltd currently offers the PX-888, a handheld two-way radio that supports up to 128 channels and 4W to 5W output.

All mainland China makers have their own R&D teams with at least five engineers. They can develop four new models each year. Due to the product line's maturity, makers are not introducing new functions. Neither do they plan to integrate GPS technology in the short term.

Most makers forecast that prices will depend on the movement of the yuan and cost of materials and labor. Some companies said they will be keeping their current prices. Others such as Puxing see their prices going up by 5 to 10 percent in the coming months.

With digital two-way radio still at product development stage, most makers direct their efforts toward adding value to their analog models to boost their competitiveness.

To differentiate their analog handheld two-way radios, Taiwan makers offer units designed for professional applications instead of consumer applications. In terms of value added, suppliers offer them either as built-in or optional functions.

Analog handheld two-way radios from Taiwan support 128 to 256 channels. The operating frequencies may vary to suit customer requirements. The products support CTCSS and DCS, and comply with professional standards, including MIL 810/C/D/E/F, IEC529 and IP54/55.

The average export price of analog handheld two-way radios from Taiwan was $75.12 per unit in 2007, down from $89.37 in 2006. Consumer analog handheld two-way radios list at $60 to $80 in 2008. Professional analog handheld units are priced from $80 to $130 each.

Prices of digital handheld two-way radios are at least three times higher than analog units. Rexon Technology Corp. has started developing digital handheld two-way radios and considers the segment an emerging trend.

The majority of handheld two-way radio makers from mainland China and Taiwan are capable of manufacturing their products in-house, as most of them have their own factories. Large-scale manufacturers from mainland China perform SMT, assembly, QC and packaging in-house, with mold making the one process subcontracted by many companies.

Interviewed makers have an average monthly production capacity of 20,000 units, with a 50 percent utilization rate at a 10,000-unit monthly output. Many makers purchase chipsets from Japan and the US.

Bida Communication supplies GSM/CDMA/DCS/PCS repeaters, handheld two-way radios and accessories. The company has an office in Xiamen and a factory in Quanzhou, both in Fujian province.

Specializing in handheld two-way radios, Nanan Hongda Electron Equipment Co. Ltd can release three new models every year. Most of its products are sold under its own brand, Hongda.

Puxing offers walkie-talkies, handheld and in-vehicle two-way radios. It provides OEM and ODM services and utilizes its full capacity, producing 30,000 units a month. In the coming months, Puxing will be increasing its production capacity by 20 to 50 percent.

Fushunda Telecommunication (Quanzhou) Co. Ltd, formerly known as Quanzhou Jiangnan Second Radio Fty, makes marine transceivers, VHF mobile transceivers, VHF handheld transceivers and two-way radios.

In Taiwan, most makers have their own facilities for in-house R&D, assembly and testing of products.

Chief Tek Electronics Co. Ltd has a factory in Taipei that handles production of FRS two-way radio modules, LMR two-way radios, professional two-way radios, radio trunking systems and wireless data radios.

Rexon, which produces handheld and in-vehicle two-way radios, has a factory in Shanghai that produces basic or low-priced handheld two-way radios. Rexon maintains another factory in Taichung in Taiwan for the production of high-end two way radios.

Handheld two-way radios account for 85 to 95 percent of Rexon's output. Its monthly capacity can be used for analog handheld and in-vehicle two-way radios or for analog handheld two-way radios only.

The company estimates handheld and in-vehicle two-way radios will account for 70 percent of its total sales in 2008. Rexon started manufacturing in-vehicle two-way radios only this year.

Handheld two-way radio makers in mainland China and Taiwan are looking to boost their export business. The majority of suppliers have an OEM and ODM customer base in Europe, North America and Asia. Some companies also distribute their products under their own brands.

Mainland China makers' main export markets are Europe and Asia. Most of the exported products are midrange professional two-way radios.

Eighty percent of Puxing's export volume comprises handheld two-way radios. Walkie-talkies and in-vehicle two-way radios each represent 10 percent of exports. The company's major markets are Europe and the US.

In 2007, Fushunda exported 25 percent of its 40,000-unit output of handheld two-way radios. Asia and Europe are the company's main export markets. About 50 percent of Fushunda's products are released under OEM or ODM terms.

Bida Communication exported more than 30,000 two-way radios last year, equivalent to 20 percent of its total output. The Middle East and Europe are its major markets. About 95 percent of the company's products are released under its own brands, BiDaTone and Wanhua.

Nanan Hongda started exporting two-way radios only last year, with Europe as its main market.

Taiwan makers ship their handheld two-way radios to Western and Northern Europe, North America, Australia and Southeast Asia. In 2007, about 88.18 percent of Taiwan's export sales of walkie-talkies were from buyers in Europe, 5.89 percent from Asia and 1.42 percent from North America. The rest comes from other export markets.

Rexon projects it will generate $10 million in sales of handheld and in-vehicle two-way radios in 2008. Exports account for 80 percent of Rexon's sales of handheld and in-vehicle two-way radios. The company's major export customers are based in Europe, North America and Asia.