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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 171.02

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Dec 31 3:59 PM EST

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To: foundation who wrote (31158)	1/14/2003 7:39:07 AM
From: foundation	Read Replies (1) of 197056

Samsung braced to pass Nokia in mainland mobile handset market South China Morning Post January 14, 2003 Hui Yuk-min South Korean technology giant Samsung Electronics is likely to narrow the gap, if not overtake, Nokia Corp to become the second-largest brand in China's mobile handset sales, said market watchers. At the same time, the recent granting of a direct sales licence by the mainland government to Samsung has aroused concern about the future of its import agents. The licence allows Samsung, China's third largest mobile brand, to sell some of its locally made mobile phones on the domestic market. Gartner Asia-Pacific Mobile analyst Ann Liang said Samsung had been in talks with domestic mobile handsets distributors in addition to its import agents in order to expand its mainland distribution channels. "As long as they increase the scope of handset distribution channels, they can push their sales volume," Ms Liang said. Samsung now relies on its Hong Kong-based import agents Ezcom Holdings and Global Tech (Holdings) to sell its handsets in China. With the new licence Samsung will be able to sell handsets made by its mainland joint ventures to the domestic market. Samsung has two mainland joint ventures - a CDMA factory in Shenzhen with domestic handset maker China Kejian Corp and a Tianjin GSM factory with TainJiang Electronic Industry Co-operation - through which it expects to produce 15 million handsets a year. Ms Liang expects Samsung's market share to continue to grow this year. Its market share jumped from 8.3 per cent at the end of 2001 to 12.5 per cent by the third quarter last year. The sharp increase was due partly to unscrupulous vendors smuggling its products into the mainland, said Ms Liang. On the other hand, China's second-best selling handset brand, Nokia, has seen a huge drop in market share - down from 31.3 per cent at the end of 2001 to 18.8 per cent as of last year's third quarter. However, Ms Liang said whether Samsung could overtake Nokia depended on how fast Samsung established its network with local vendors and how strongly Nokia hit back. She was sure Samsung's import agents would be hurt to some extend by the direct sales licence. However, she believed Samsung would not drop the agents altogether because of their long business relationship. Both Global Tech and Ezcom said they did not believe their relationships with Samsung would be affected. The agents said they had recently been awarded exclusive distribution rights for certain new premium and high-end models.

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