Grey market for mobile phones market 'declining', says IHS

The global grey market for mobile phones is expected to shrink for the second year running in 2013 as consumers increasingly turn to branded products, says electronic market research firm IHS.

Shipments of grey-market phones - which IHS defines as counterfeit products as well as so-called 'white-box' handsets on which any logo can be printed - are expected to drop by 12 per cent this year, according to IHS' China Research Service.

White-box handsets often are illegal despite sporting a company's logo because they use smuggled chips, lack official certification, use fake International Mobile Equipment Identity (IMEI) codes and usually are trafficked to avoid valued-added tax (VAT).

Shipments reached their peak in 2011 with a total of 250m grey-market phones, but in 2012 shrank to 221.5m units and are expected to decline further to 195m this year and 174m in 2014. The decline will continue at least through 2017, when shipments will dwindle to 134m units, says the report.

China - and the wider Asia-Pacific region - account for the lion's share of grey market handsets sold around the world, but rising levels of disposable income mean that consumers there are increasingly opting for genuine, big brand products such as Apple's iPhone rather than cut price knock-offs. 

More information on the report can be found here.