It should be E assuming the imports are from US..

I pass!

Well I am not able to pick a choice here.
Either this is a super-duper ultra-tough problem or it has an error or some vague assumption.
D or E comes close, but with assumptions.

E

as electronic component can only come from US from a GMAT point of view.. ouarfffffff

I'll go with D

The reason for diminishing sales for American manufacturers is that "Chinese manufacturers are becoming more productive, selling increasingly greater shares of new phones on the Chinese market".. However, if the phones lack quality, it is unlikey that consumers would buy the phones manufactired by Chinese manufacturers. Therefore, Amercian manufactirers still have the consumer's confidence and this weakens the argument that their profit from sales in China would diminish.

"D" for me.

(A) - sale out of china (not relevant)
(B) - again, not relevant. We're concerned with sale of cell phones in china
(C) - Not relevant. Argument is restricted to cell phones and not other electronic products
(D) - If many American cell phones are of superiror quality, then consumers will not be tempted to buy lower quality chinese manufactured phones. And if this is the case, profits should not diminish
(E) - The fact it uses many imported electronic components does not matter. The manufacturing, and thus selling price might be higher, but that is only based on the assumption the imported components are costly. A fact, we do not as yet know.

(D) for me.

ah... but we do not know if the parts are imported form America, do we ?? this is too big an assupmtion to make on the GMAT.

I agree it is (E).
Stem: Chinese companies now have greater shares of the market. Therefore Amercian companies will see a diminishing shar of profits from China.

(A) Very few cell phones manufactured in China will be exported for sale in the United States.
Do not attack the argument. No exports will not help American companies' profit from China.

(B) There are still more cell phone users in the United States than China, despite the latter's greater population.
Yes, but American companies' profit in China may still be decreasing.

(C) American companies still claim large shares of sales in China of other electronic devices such as computers.
It may be true, yet it does not help American companies' profit in cell phone sales in China.

(D) Many American cell phones are considered to be of superior quality to those produced by Chinese manufacturers.
Again, it may be true. However the fact is that American cell phone companies' market share in China has been decreasing when Chinese companies' claiming larger and larger market share, as claimed in the question stem. In other words the good quality has not helped with the declination of the market share, thus cannot help with the declination of the profit from China.

(E) Cell phones manufactured by Chinese companies use many imported electronic components.
The apparent increase in Chinese companies' market share is less harmful to American companies if this is true, as American companies simply shift their focus from whole product to electronic components and can still maintain their profitability in China.

I am convinced that it is E.

A, B and C are obviously ruled out.

D just speaks about quality. But, most of the consumers make cost-quality trade-off before they buy. Thus, D is not affecting the quality at all.

However, E weakens the argument as a general statement also. 'E' basically says that though Chinese market has grown up, it is a lot dependent on the imports. Then, one cannot claim " American companies will see a diminishing share of the profits stemming from cell-phone sales in China." because some imports may be from USA. This is better than choice D, if not the best.



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Awaiting response,

Thnx & Rgds,
Chandra