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Foreign suppliers should be more fashion conscious in China

BEIJING-While foreign handset makers Motorola, Nokia, Siemens and Sony Ericsson still dominate the Chinese market, some 30 domestic suppliers are gaining market share and are expected to grab 20 percent of the world’s largest handset market by the end of the year. Local company TCL is already ranked third, following Motorola and Nokia, but before Siemens and Ericsson with a 10.2-percent market share.

Local vendors’ secret weapon is trendy design, not something usually associated with Chinese products in the past. If foreign suppliers want to protect their market share, they will have to follow in an increasingly fashion-conscious market, industry analysts said.

With handset demand in the big cities reaching saturation point, the market is moving to smaller cities in inland provinces, where cheap prices will become more important, favoring local producers.

But Colin Giles, vice president of Nokia Mobile Phones (China), told China Daily’s Business Weekly on the sidelines of the Expo Comm Shanghai 2002 trade show that his company is also betting on new technology to gain market leadership. He further added that “MMS is a fantastic technology that is going to be a catalyst for our industry.”

For Giles, design is not the focus at the current stage. “The time to focus on design is past,” he said. “Now it’s the time to focus on technology, and then you’ll be back to design again.”

In related news, Legend Group, China’s biggest computer vendor, does not plan to increase capacity at its handset manufacturing joint venture Xiamen Legend XOCECO Mobile Communications, which is capable of manufacturing 1 million handsets per year.

The company, however, increased its stake in the joint venture from 60 percent to 80.8 percent at a cost of 61.5 million yuan (US$7.4 million) Legend is also in talks with manufacturers in South Korea and Taiwan to purchase mobile phones.

Xiamen Legend XOCECO released six new handset models, with four of them for the first time under the Legend brand, which is well known in China as a computer supplier.

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