iSuppli, the market research firm who seems to know a little bit about everything, has been studying the gray-market cell phone business. The bad news? Business is booming. But on the bright side, a recent crackdown by China officials was more than just a little bit effective.
"Recent developments indicate that the China government is beginning to take seriously the long-festering problem of smuggled handsets and counterfeit handsets, a thorny issue that not only undercuts tax revenues but also tarnishes China's image abroad," said Kevin Wang, director of China Research at iSuppli. "As a result, iSuppli believes that the gray handset market will be greatly affected by the government investigation."
The effect can already be felt in gray market circles, in which the total number of shipments fell by 25 percent in June compared to May. Still, the war is far from won. Looking ahead, iSuppli predicts gray market cell phone shipments to reach 172 million in 2010, up from 145 million in 2009.
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