Subject: [NEXTEL-1] Domestic Mobile Phone Industry Takes on Bubble Economy

From: Marcel <[email-masked]>
Date: Thu, 02 Jan 2003 19:04:18 -0500

Domestic Mobile Phone Industry Takes on Bubble Economy

Story Filed: Tuesday, December 31, 2002 6:19 AM EST

BEIJING, Dec 31, 2002 (SinoCast via COMTEX) -- Statistics from Ministry of Information
Industry as at end of November
show that over 200.31 million consumers in China are using mobile phones. According to the
tenth Five-Year Plan, mobile
phone users in China shall hit 260-290 million by 2005.

The growth from 60 million in year 2002 to 90 million in 2005 in mobile phone users
indicates that Chinese mobile phone
industry is reaching its saturation limits in town.

Bird announced on December 17 that its gross output of mobile phones this year will exceed
10 million; CECT claimed in this
September that its mobile phone sales next year will hit 5-6 million; TCL is determined to
upgrade its throughput of mobile from
3 million per year to 12 million. Predicted throughput of these three enterprises for next
year will exceed 27 million, let alone
various other domestic brands of mobile phones like Haier and Legend. Question is, to whom
and how will these vendors sell
their products under the circumstances of a saturated foreign mobile phone? Manufacturers
who are interviewed understand
that it is very risky to expand in domestic mobile phone production and that bubble
economy in mobile phone shall soon unveil
in the next 2-3 years, or even shorter.

Domestic mobile phones mainly concentrate in high end markets, which have limited
capacity. Motorola and Nokia so far
cover 25% of the market share, Siemens 11%, leaving other vendors only 40% of the pie.
Domestic brands would have to
confront foreign competitors in low end markets. Whether domestic brands can match against
foreign brands in technologies,
R&D, market and fund is still to be found out.

http://library.northernlight.com/FB20021231880000062.html?cb=0&dx=1006&sc=0#doc

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