INTERVIEW-PCC sees better Asia sales
Reuters Story - April 21, 1998 04:14
By Angela Tan
SINGAPORE, April 21 (Reuters) - Philips Consumer
Communications (PCC) aims to achieve more than a third of its
global sales from the Asia Pacific region in five years, a
senior official said on Tuesday.
Formed in October 1997, PCC, 60 percent owned by Philips
Electronics and 40 percent by Lucent , makes and
sells cellular, corded and cordless phones, pagers and answering
machines.
"In Asia right now, we are ahead of expectations. We are
selling more high-value products and making more margins than we
thought we would," Jonathan Marchbank, president and general
manager for Asia Pacific, told Reuters.
"Asia is budgeted at less than a third of the group's global
sales. But I am hoping to achieve more than a third. We are
shooting high," Marchbank said.
Excluding Japan, the region is expected to attain an equal
split with America and Europe in five years.
PCC's annual sales for 1997 were about US$2.5 billion.
Marchbank said the group was unaffected by Asia's currency
turmoil since it was formed only last October.
"Last year's sales in Southeast Asia were fairly minimal. So
the year-on-year growth will be very significant," he said.
Marchbank said PCC is gaining market share in Malaysia and
doing well in China due to a successful launch of its Genie, the
world's lightest GSM handphone.
It has about 10 percent of the cellular phone market share
in most countries in the region.
Target markets include Malaysia, Singapore, India and China,
with the latter the most significant.
"The Asian market is estimated at 20-30 million handsets per
year. China is estimated to account for 10 million handsets
sales this year," Marchbank said.
Sale's growth in India has been slower than expected due to
the low purchasing power of the population. But PCC remains
optimistic about its prospects.
"We see a million cellular phone subscribers in June. By
year 2000, we see 2.5 million subscribers...The market is
growing around a million subscribers a year, which is worth
being around for," Marchbank said.
On India's paging business, he sees a growth of 400,000
subscribers annually. It now has 800,000 subcribers.
Indonesia, a problem-child during Asia's crisis, was
beginning to show signs of improvements, Marchbank said. He said
PCC has no problems with Indonesian debt since sales are on
letters of credit.
Marchbank said PCC, which has a plant in Singapore and
another in Shenzhen, China, has no plans to build more in Asia.
"We are looking for profitablity and looking to get most out
of the existing resources. Today, capacity is not an issue.
Singapore and Shenzhen are sufficent," he said.
On the keen competition in the telecommunications market,
Marchbank said:
"We go head-on. We are very targeted on the consumers.
Ericsson, Nokia, Motorola built aspirational brand niche around
stiff high-end business users -- the BMW set in the market. But
we see most of the growth coming out of the consumer segment."
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