BEIJING-China Eastcom, one of China’s 19 licensed CDMA handset manufacturers, has reached an agreement with carrier China Unicom to offer CDMA handsets to consumers at one-third of market prices. Its distribution arm Face One Telecommunications would price the handsets between 398 yuan (US$48.10) and 598 yuan (US$72.28).
China Unicom would reimburse the price differential to Face One during a period of time that subscribers use its services. Unicom would discontinue direct handset purchases from suppliers.
The South China Morning Post reported that since 1 July, Face One has sold 280,000 CDMA handsets and expects to sell between 800,000 and 1 million units by year-end.
China Eastcom plans to become a strategic investor in China Unicom when the carrier launches its A-share issue, reserved for domestic investors, later this year.
In China’s GSM handset market, Nokia plans to offer its first multimedia messaging service (MMS)-enabled handset, the Nokia 7650, in China soon. China Mobile will start offering MMS services in October.
Short message service (SMS) is popular in China, and Nokia hopes the potential for MMS, which allows users to send and receive e-mail, pictures and sound clips, will be even bigger. If rosy predictions come true, there would be a huge market for replacement mobile phones.
Nokia hopes its 7650 model and subsequent camera phones will help it grab the number-one spot in the Chinese handset market from Motorola. The U.S. company has recently also launched new models, a color screen handset and a General Packet Radio Service (GPRS) model.
Moreover, Telecom consultancy BDA China has released a new report titled “China’s Mobile Handset Market: Attack of the Clones.” BDA China analyst Aleyn Smith-Gillespie argued in the report that fears of handset clones are exaggerated, because in the mobile handset business, fashion is as important as function.
A major shift in the market is the more active involvement of mobile operators in selling subsidized handsets to consumers, a trend launched by China Unicom to spur subscriber growth on its CDMA network. Rival China Mobile may follow suit by offering subsidized GPRS handsets.
BDA China predicted continued growth in the Chinese handset market, from 50.1 million handsets sold in 2001 to 62.7 million in 2002.
More information about the report is available on the company’s web site at www.bdachina.com.
