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Nokia has announced that the world's leading cell phone maker plans to soon set up a new joint venture in the Chinese national capital one year into reorganizing its China business for obtaining top handset sales in the country.
The company, said Vice-president of Nokia Network (China) He Qingyuan Monday, has signed merger documents with its four established local joint ventures, two cell phone producers and two telecommunications equipment manufacturers, waiting only for government approval before building the new venture.
The new company forged by the four will become the largest joint venture in China, said He, boasting the biggest mobile phone production and export capacities.
Although Nokia declined to unveil the shareholding structure of its new child, insiders said it must have increased its shares to have an absolute say in adopting a unified market strategy in the joint venture in 2004.
It is hoped the new venture will help avoid competition among the four, so as to reduce Nokia's operation cost and improve its competitiveness, making China its No. 1 production and R&D base in the world.
Along with the preparation for the new venture, Nokia revised its global strategy by granting the Chinese market (including China's mainland, Hong Kong and Taiwan), the same regional market status since 2004 as the other four -- European, Middle East and African, American and Asia-Pacific regions, making China the only national market in its market classification.
Besides, nine business departments in Nokia's China unit had been reorganized into four major business lines -- mobile, multi-media, network and corporate solutions -- by the end of last month in Nokia's move to streamline itself.
Other businesses will be stripped off from the company as "concentrating on the main business" has been Nokia's major concernsince initiating the reorganization about one year ago.
In fact, "part of our business, including venture capital has been transferred to our newly-established business development center in Shanghai", said Zhao Kelin, vice-president of Nokia's China unit.
"The reorganization will help us lead in mobile sales in China by improving its overall competitiveness and operation efficiency," Zhao said.
Despite years of domination with major competitor Motorola on the world's fastest growing economy, Nokia is facing threats from Chinese mobile phone makers like Ningbo Bird and TCL.
According to figures released by the Ministry of Information Industry, Ningbo Bird and TCL sold 9.68 million and 7.65 million handset units respectively in last year's first 10 months, overtaking Nokia's 7.38 million and Motorola's 7.35 million for the first time.
In a bid to maintain its domination, Nokia, while focusing on GSM (global system for mobile communication) handsets, has extended its business to CDMA (code division for multiple access) cell phones to boost phone sales.
Although only six percent out of the country's 250 million mobile subscribers have chosen CDMA services, Nokia believes it will benefit a lot as the network provider China Unicom has pledged to purchase a large bulk of handsets from it.
"Nokia (China) will introduce more new handset models to the market in 2004. We'll not only maintain the leading position in sales revenue, but enjoy the biggest sales volume this year, surpassing all our major rivals," said Zhao.
According to a research group Gartner Dataquest, Nokia enjoyed about 36 percent of all mobile handsets sold last year, seizing a 38 percent global market share. In the Chinese market, it currently employs over 4,500 people in more than 60 offices and two R&D centers.
(Xinhua News Agency February 12, 2004)
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