Mobile Phone Still a 'Hot Point'

China's mobile phone market will continue to be a "hot point" this year, especially with the emergence of local brands.

During the past several months, at least four Chinese companies, including Shenzhen-based Kejian and Hangzhou's Eastcom, have announced they have developed their own mobile phones by co-operating with foreign partners. Zhongxing and Xiamen-based Amoisonic were expected to release their products during the first half of this year.

However, these announcements have not met with a significant response from Chinese consumers whose expectations have been raised by foreign companies.

"It is too early for these companies to expect to have their voices heard by common consumers," said an insider who has followed the sector for years.

Zhang Chaoji, a vice-manager of Kejian's Beijing branch, said sales of his company's phones were satisfying. Kejian handsets are currently available in South China; it is the first local company to sell mobile phones under its own brand.

He declined to give specific sales figures, but estimated that several thousand handsets had been sold.

Zhang played down the technological gap between local companies and their foreign counterparts.

"In high-end products, the gap is quite large, but in terms of the middle-end and lower-end, we are roughly at the same level," he said during a telephone interview with Business Weekly.

"Where we are really inferior is in marketing," he said, adding that brand awareness, reputation and capital capabilities are main factors that will determine their fate in competition with foreign companies.

So far, foreign mobile phone manufacturers have been calm when confronting local competition.

On the one hand, they welcome the local companies, but on the other, they stress their advantages in research and development. They assert that fast-evolving technologies and shorter product cycles will make it harder for local companies to catch up in a short time.

Jiang Shaobing, deputy director of the planning department of the Ministry of Information Industry, estimates that "it is unlikely that local companies will be a big challenge for foreign companies in in the short run."

"There should be a process for consumers to accept local brands," he said.

Both the Chinese Government and common consumers are showing increasing care for the mobile phone market, especially since local companies have grown to dominate some sectors such as personal computers, home electric appliances, telephone switches.

However, some factors should not be ignored when comparing the mobile phone business with others, the insider said.

Local companies will not be able to benefit from lower prices as were enjoyed by computer or home appliances companies before.

People's Daily Online --- http://www.peopledaily.com.cn/english/