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.
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.
"All 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 May 10, 2007)