French vendor Alcatel SA said it is contemplating an entrance into the U.S. mobile-phone market.
The company admitted as much during a press event in Paris during which it announced plans to double its worldwide GSM handset sales this year. The vendor earlier this year introduced a Global System for Mobile communications base station for the first time in the United States.
Global vendors increasingly are realizing the importance of the U.S. market if they want to become global leaders in handsets and infrastructure. But many are finding a highly competitive market where volume, distribution and a strong brand determine success.
“It’s not going to be an easy nut to crack,” said Bryan Prohm, analyst with Dataquest. “But Alcatel is legitimate in Europe. They have the muscle to become a solid second-tier performer in the states, assuming they commercialize a full product portfolio including GSM, CDMA and TDMA.”
German manufacturer Siemens AG revealed to RCR last month plans to re-enter the U.S. handset market this year after pulling out in 1998, unable to throw money at this competitive market. The U.S. handset market is no less crowded today, but Siemens said it is ready to make the investments needed to stage its comeback, competing in all three technologies. The supplier expects to sell 30 million handsets this year, more than doubling the 11 million units sold in 1999.
Alcatel announced a sales target worldwide in excess of 20 million GSM handsets in 2000, almost doubling 1999 volumes of 11 million. This target would translate into a 10-percent worldwide market share, said Alcatel. Sales in the first quarter totaled almost 5 million handsets.
Alcatel said the growth will be reinforced by the arrival of Wireless Application Protocol-enabled GSM handsets that will match middle- and upper-market segment requirements. It expects to sell 10 million WAP phones in 2000.
At the same time, the vendor said it is investing $57.5 million in its three production facilities in France and China. It wants to hire 200 new engineers.
