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Nokia conservative on China forecast
( 2002-02-05 10:01 ) (1 )

The Finnish mobile phone maker Nokia expects its handset sales to grow by 10 to 15 per cent in China this year, but says the market outlook for its wireless infrastructure business here will be flat.

Experts said the 10-15 per cent growth forecast was not a bold one as China's overall mobile phone market is set to grow by nearly 40 per cent.

But Urpo Karjalainen, president of Nokia (China) Investment Co Ltd, said he is confident that Nokia will grab a substantial market share to become the largest phone seller in China as new models are earmarked for launch.

"We were very close to being No 1 in China last year," Karjalainen said on Monday in Beijing.

The No 1 mobile phone maker internationally with a market share of 37 per cent last year, Nokia is just one of the firms vying for the leading position in the highly competitive Chinese market.

No official figures reveal which company is the largest here but it is widely believed Motorola and Nokia are ahead of other competitors.

China's Ministry of Information Industry predicts a total of 55 million new subscribers will be added this year.

Karjalainen stressed Nokia will offer more new models this year to cater for the highly segmented market in China.

Apart from products, Nokia will also have to pay greater attention to mounting pressures from China's local mobile phone makers. Despite being relatively inexperienced, local companies have launched competitive products which have enabled them to increase their market share from nowhere to around 15 per cent.

Another issue that will impact on Nokia's handset sales growth in coming years will be the CDMA (code division multiple addresses) network China Unicom has just opened. It plans to have 50 million users in three years.

Nokia has not got the licence to supply CDMA handsets in the Chinese market. This will exert great pressure on companies like Nokia if CDMA rapidly gains a big share in China..

All the phones Nokia sold in China are GSM (global system for mobile communications) phones.

Karjalainen revealed Nokia was in discussions with local partner Capitel, which has got a CDMA licence, for co-operation in phone production but he refused to give further details.

Nokia's sales in China last year hit US$3.01 billion and exports grew by 50 per cent to US$2.22 billion. China is Nokia's second largest market in the world after the United States.

The company's cumulative investment in China has topped US$2.04 billion.

In December, Nokia kicked off its 10 billion yuan (US$1.20 billion) Xingwang Industrial Park in Beijing as a global production base which will further enhance Nokia's manufacturing capacity in China.

Nokia predicts the global shipment of mobile phones will be 420 million to 440 million units this year.