China's mobile market an emerging success story

From Elmo Leonard in Beijing

China's GDP expanded by 10.9 percent during January-June 2005, compared with the first six months of 2005, the National Bureau of Statistics (NBS) said here. China's industrial sector, growing diligently, backed by a willing workforce, is one factor.

The coin's other side is the new thinking of the Chinese government. Fake manufacture is apparently being discontinued; China is thinking in the long term. Backing it, an increasing number of graduates pass out in marketing and IT, absorbed by the factories. Industrial parks are opening at a rapid pace, backed by very attractive tax holidays and the best known multinationals in the world mark their presence in the changing skyline.

One of China's emerging success stories is her mobile market, domestic and export. Nokia, headquartered in Finland, believes that the global mobile subscriber base reached approximately 2.2 billion at end-2005 and estimates that the figure will reach three billion during 2008. Sri Lanka's additions of mobiles, per month is 75-100,000, a Nokia survey of the subcontinent says.

Mobile growth is particularly strong in the high-growth markets of the Middle East, Africa, Latin America and South Asia, Nokia executives, here, told visiting journalists from Bangladesh and Sri Lanka.

At end-2005, Nokia operated 14 manufacturing facilities in Brazil, China, Finland, Germany, Hungary, Mexico, South Korea, UK, US and in March in Chennai.

At the other end of the industry spectrum, Nokia believes that the market is being shaped by an increased emphasis on data traffic. Mobile communications is converging in some areas with computing, digital imaging and the internet, making it possible for consumers to use handheld devices for filming video, listening to music, playing games, surfing the web and more. Nokia is shaping this converging industry, pushing it forward with cutting-edge products and the development of open standards.

China, the world's largest mobile market, at end-2005, counted a subscriber base of 380 million, making up 20 percent of the world's total mobile subscribers. Hera Siu, vice president, Nokia (China) and general manager, Nokia Telecommunications said that MII's official statistics show that the number of cumulative mobile subs increased by 58.6 million in 2005.

Nokia is a leading GSM network supplier in China with over 20 operator customers; No 1 3G/WCDMA system supplier in the China area; Net sales and export Euro 6.7 billion in 2005. China is a global manufacturing base with 200 million mobile phones manufacturing milestone, reached in October 2005 and has an established full range of R&D to service global and local markets, Gerry Wong, senior manager quality, customer and market operations said.

Nokia manufacture is backed by the Xingwang (International Industrial Park (XIP) situated adjacent to its Beijing factory. It is a world class mobile telecommunications manufacturing base. It is one of the largest investments in Beijing, with a target zero inventory and scale of economy. It has attracted more than 20 leading suppliers; over 13 billion RMB investment; more than 70 billion RMB in sales in 2005 and created more than 30,000 jobs.

Among industries set up in XIP, which go into mobile sets are: RF Micro Devices Beijing Co (components assembly and test); Sanyo Energy Beijing Co (batteries); Friwo Electric Beijing Co (charges); Foxconn Precise Parts (Plastics manufacturing partner); Delta Printing and packaging; Perlos Electronic and Communication Components Co Ltd, Ibiden Electronics Co, (printing Circuit Boards) Beijing S&C Electronics Co (key mats) Beijing Savcor Coatings Technologies (coating) Beijing Electoteq Electronics (manufacturing partner); Nokia Capital Telecommunications Ltd (mobile phones); Exel-Sinotrans Freight Forwarding Co (Xingwang Logistics Centre).

Backing China to hold 20 percent of the world's total mobile subs, is its emerging middle class, whose annual income is Euro 8,000 plus, per urban population of 400 million. The rich make up five million, with an annual income of Euro 35,000. There is also a very poor population of 800 million people, whose annual income was Euro 220 per person, according to China's Ministry of Civil Affairs.

Every sector in China, shows large potential into the next, Nokia's communications manager, Shen Jian Bill said.

Backing Nokia's success in China, in 2005, Siu said that Nokia completed the merger of four manufacturing JVs in January 2005; achieved operational efficiency for growth; strengthened Nokia and its Chinese partners' competitiveness in China and in the world; the new company becomes one of the largest foreign invested enterprises in China as well as the largest mobile communications manufacturer and exporter in the mobile telecommunications sector, here.

Nokia and China Putian set up a new JV Wahan on 3G technologies and products in October 2005.