BIZCHINA / Overseas Investment

Sony Ericsson wins orders

By Li Weitao (China Daily)
Updated: 2007-05-10 08:45

Sony Ericsson yesterday won two major mobile device orders in China,
which could help boost the firm's market share in one of the world's most
competitive handset markets.

Sony Ericsson, the world's fourth-largest handset maker, signed a
framework agreement to sell 4 billion yuan worth of handsets to Shenzen
Telling Communications Corp, a Chinese mobile phone distributor.

Under another deal, PTAC, the largest handset distributor in China, which
controls more than 30 percent of the country's handset distribution
network, will purchase 5 million handsets from Sony Ericsson.

A Sony Ericsson billboard in Shanghai. [China Daily]

About 60 percent of the 5 million handsets will be mid-range and low-end,
with some models priced at roughly 400 yuan, Pan Zhen, vice-president of
China National Postal and Telecommunications Appliances Corp, parent of
PTAC, told China Daily.

The move marks Sony Ericsson's push into the entry-level handset market.

"To be one of the top three players (both in China and globally), we have
to compete in this market," said Gunilla Nordstrom, president of Sony
Ericsson China.

London-based Sony Ericsson, a joint venture between Sweden's Ericsson and
Japan's Sony, has long been focusing on expensive handsets with
high-quality music players and cameras, sub-branded by Walkman and
Cybershot.

The strategy has helped the company manage strong profit margins compared
to larger rivals Nokia and Motorola.

In the first quarter of this year Sony Ericsson launched 10 new handset
models, four of which are entry-level handsets.

Nordstrom revealed that Sony Ericsson set up a research and development
team in Beijing to focus on developing entry-level handset models.

"Part of the low-end mobile phones sold by Sony Ericsson will be
developed in China," she said.

Emerging markets such as China, India, Russia and Brazil already provide
large revenue streams for leading manufacturers such as Nokia and
Motorola.

In China, which had 481 million mobile phone users as of March 2007, most
newly added subscribers are from rural areas, where consumers are buying
handsets for the first time.

Deals between distributors and retailers are crucial for handset
manufacturers to expand their sales networks in China.

(China Daily 05/10/2007 page13)

(For more biz stories, please visit Industry Updates)

Learn Chinese, Chinese Mandarin