China's largest mobile phone maker is shifting its focus to the medium- and high-end sector of the industry, which is currently dominated by foreign brands, such as Motorola, Nokia and Samsung.
Ningbo Bird Co Ltd has earned a leading position in the world's largest mobile phone market by aggressively targeting the low-end market.
But as the segment gets more crowded and profit margins shrink, Bird has been forced to shift its market focus, said Dai Maoyu, vice general manager of the Shanghai-listed company.
"We are forced to offer medium- and high-end handsets, which can easily stand out from our peers, because too many companies are now making simple low-end products, which pulls down profit margins," Dai said yesterday in Shanghai.
These new products will include those catering to female consumers with elegant designs, such as the new "F1" model which hit the market this week at a relatively pricey 2,800 yuan (US$337).
It will also market personal digital assistants to businessmen.
Industry analysts are hailing the move, saying there is not much room for big companies to grow in the low-end market.
"The low-end market is becoming more and more crowded as it requires little technology," said Wang Jing, a telecom analyst with Analyses Consulting Corp Ltd.
"It is also very hard for Chinese companies to cut costs, as their production volume is still rather low, compared with multinational competitors, which sell all over the world."
Bird's move is not good news for foreign giants, which are already losing ground to home-grown products in China.
Ningbo Bird and TCL Corp were the top-two manufacturers of GSM cell phones in China during the first four months of this year. Bird sold 4.65 million phones, while TCL sold 3.21 million, leaving Motorola and Nokia behind, according to a monthly mobile-phone sales report compiled by the Ministry of Information Industry.
"Although domestic manufacturers are unable to compete with their foreign rivals in technology, they focus on making functions more user-friendly and designs the same as, or even better than, those of foreign brands," Wang said. "Sometimes, their localized functions make them more appealing to local users."
Ningbo Bird reported sales of 3.14 billion yuan during the first quarter of this year, an increase of 224 percent. Profits hit 49.05 million yuan during the period, a year-on-year increase of 117 percent.
(Shanghai Daily June 20, 2003)
