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watch out for the chinese


This article from The Economist covers the rise of local Chinese handsets over the established international players:

ONLY last year, the bosses of global mobile-phone companies active in China were still laughing at the handsets offered by TCL, a Chinese manufacturer of television sets that started making mobile phones in 1999. To most foreigners, its faux-diamond ornamentation is egregiously kitschy. But the Chinese love it, and so TCL has passed Siemens and Samsung to become China's third-largest handset vendor after Motorola and Nokia, two firms that it now has in its sights.

Suddenly, nobody is laughing at local brands such as TCL and its two main rivals, Ningbo Bird and Amoisonic. In 1999, they had less than 3% of a fairly small market. Now the market is the world's largest—with about 200m subscribers and 60m handsets sold last year—and domestic brands have 26% of it, according to estimates by Adventis, a telecoms consultancy. Several foreign brands, including Sweden's Ericsson, have all but vanished; America's Motorola and Finland's Nokia still dominate, with half the market between them, but they are rapidly losing share. As if to sum it up, Motorola itself has started copying the diamond-studded decoration it used to deride.

Wow. Very impressive. The article also mentions that there are now thirty-six handset providers in China, and growing. Because they use mostly technology that they buy from European or US companies, their R&D outlay is quite low. Obviously this will have at some point impact on the international markets, increasing competition and lowering prices. Whether it will actually accelerate innovation is another matter, since that is usually bound to the telecoms actually deploying the services that make the handsets useful.

Categories: technology
Posted by diego on March 10 2003 at 5:55 PM

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