 |
Nokia Considers Expansion of Presence in West China
Finnish mobile phone giant Nokia is pondering an expansion of its presence in China's inland market and may open a joint venture in Chongqing, said a senior executive of the company.
"We are working on the Chongqing project and people have to be patient,'' said Folke Ahlback, senior vice-president of Nokia and chairman of Nokia (China) Investment Co Ltd.
Sources close to Chongqing Municipality said the new plant would produce phones under the Nokia brandname. But details concerning the phone models, volume and production capacity are not yet available.
If everything goes smoothly, the Chongqing plant would be Nokia's eighth joint venture in China and the first in the western regions. The State has launched an ambitious programme to boost the economy of western areas and Chongqing is one of the large cities that has been highlighted.
Along with its worldwide upsurge in the mobile phone market, Nokia has also made significant inroads in the Chinese market which has been the company's second largest market in the world, following the United States. In 1999, sales completed by Nokia China accounted for 14 per cent of the company's global sales total.
By 1999, the Finnish company had invested a total of US$1 billion in China.
In May this year, Nokia announced it would build a top-tier mobile phone manufacturing site in suburban Beijing that involves an investment up to 10 billion yuan (US$1.2 billion), and bring in more than 20 component suppliers and provide around 10,000 jobs over the next three years.
"Nokia will stick to its commitment to further expanding investment in China and our goal is to become the best partner in China,'' said Ahlback.
With an increase of around 2 million mobile phone users each month, China is expected to have more than 70 million mobile phone users by the end of this year, providing a significant market for companies in the sector to maintain strong growth.
Although there is no officially recognized report concerning China's mobile phone market breakdown in the past three quarters, insiders estimated that Nokia and Motorola are the top two providers, followed by Ericsson and Siemens.
Worldwide, however, Nokia outshined both Motorola and Ericsson in the third quarter.
Analysts said third-quarter earnings reports and future outlook by the three mobile phone makers reinforce the vulnerability of second-place Motorola and third-place Ericsson in the face of Nokia's continued growth.
"Nokia is crushing the competition,'' said Pete Peterson, wireless analyst with Prudential Volpe Technology Group.
Nokia recently reported a greater-than-expected profit for the third quarter with a 59 per cent increase in mobile phone sales.
In contrast, Motorola has lowered 2001 performance expectations for its mobile phone unit.
Motorola blames industry trends such as a slower rate of adoption of Internet-enabled phones.
Ericsson also faces steep losses in its handset unit. The company has announced plans to reduce its phone production workforce by 40 per cent.
In This Section
|