Nokia will push further into the TD-SCDMA mobile devices space via a team-up with China Mobile. [Provided to China Daily]
Company to make more devices that run using homegrown 3G technology
LONDON - Nokia Corp has officially expressed its ambition to make a comeback into the domestic market by teaming up with China Mobile to produce cell phones that run under the homegrown Time Division Synchronous Code Division Multiple Access (TD-SCDMA) technology.
In an interview with China Daily, Niklas Savander, Nokia's executive vice-president for markets, admitted that the company had experienced declining market share in China, but was striving to fight back by manufacturing more devices that run on the TD-SCDMA network in the near future.
The TD-SCDMA is a Chinese 3G mobile phone standard. China Mobile, the world's biggest phone carrier by subscribers, received a license to operate 3G services using the TD-SCDMA network from the Chinese government in January last year.
Savander said since Chinese telecom operators have greater say in the domestic market, strong collaboration with them was crucial in addition to normal strategies such as product distribution and branding.
Sources in Nokia said the company had already set up a Beijing-based team of more than 100 employees to specifically develop TD-SCDMA devices. A source said he had seen several really powerful TD-SCDMA product models by his company, which were expected to hit the market next year.
By the end of July, the number of 3G users in China reached 28.08 million, according to statistics from the Ministry of Industry and Information Technology. Among them, China Mobile had 11.83 million TD-SCDMA users, topping the list as the biggest 3G operator in China, surpassing China Unicom and China Telecom.
Though China is Nokia's largest market worldwide, cooperation between Nokia and China's telecom operators has been bumpy, as Nokia has long been criticized for not being sincerely devoted to developing TD-SCDMA handsets.
A deputy general manger of China Mobile's Xinjiang branch was recently quoted by Chinese media as saying that the quality and functionality of Nokia's 6788i, one of the four TD-SCDMA handsets that Nokia has produced so far, was not even better than the N95, a handset that Nokia had launched three years ago.
Nokia has rolled out four models of TD-SCDMA devices - Nokia 6788, 6788i, C5-01 and X5-00 - while Samsung, the biggest winner in China's TD-SCDMA cell phone market, has already launched nine models for China Mobile, and has claimed to have grabbed a TD-SCDMA market share of 48.2 percent.
Nokia is reluctant to embrace TD-SCDMA since the technology may be perceived as being inferior to Europe-led Wideband CDMA in terms of maturity, analysts said.
However, when Samsung, Motorola, Sony Ericsson and even Research In Motion all started jumping into the TD-SCDMA mobile phone market, Nokia moved in quickly as well to secure a leadership position in this new field, they said.
Wang Yuquan, senior consultant with research firm Frost & Sullivan China, argued that Nokia's announcement was nothing but a gesture aimed at boosting the confidence of stock market investors. "I doubt Nokia would take any substantial move (in this regard). The whole TD-SCDMA industrial chain has problems," Wang said.
Nokia is hoping to inform investors that it was still getting opportunities in China by winning the heart of China Mobile, which is the biggest operator in China, he pointed out.
Mary McDowell, Nokia's executive vice-president for mobile phones, said Nokia's strategy in China was "sound", and has been "unaffected" even after big changes happened in its top management recently.