| It was reported from May to August 2005, in the south of China, a major distributing center for MP3 players, that many manufacturers, including XFX and RENYOU, closed down due to the tense competition. It is impossible to determine exactly how many were put out of business.
According to information collected from surviving factories there were 3 key factors.
First: May, June, July and August are notoriously slow months in sales further impacting small factories.
Second: The high rate of return repair was a viscious cycle, with mounting returns forcing suppliers to offer lower costs. In order to make ends meet they in turn had to make cuts which further increased the number of RMAs.
Third: During 2004 to 2005, a lot of businessmen added to this puduct-line based on its booming profitability, with no long-term intentions. Only thinking of short-term gains meant that many of them left as soon as the signs of a dead season appeared.
In addition to these explicit causes, the slump of general profit, Component and material changes such as that of the CMOS chip, proved to be to much pressure for smaller factories with limited resources and flexibility.were other important factors.
There are no secure and fast rules in marketing. Market belongs to those who are strong, maintain a clear target, reliable product quality and good service. Freedata Technology is doing its best to avoid the pitfalls of this increasingly competative industry, hoping that through our sincere efforts we will find success the endeavors we faithfully pursue. We would like to thanks our customers and partners for their continuing support and collaboration. |
