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To: The Verve who wrote (3831)	3/23/2000 5:38:00 PM
From: sbaker23	Respond to of 34857

Chinese pursue GSM handsets eet.com Chinese pursue GSM handsets By Sunray Liu EE Times (03/22/00, 6:06 p.m. EST) BEIJING ? The Konka Group, China's top maker of consumer-electronics products, will begin volume production of Global System for Mobile Communications (GSM) cellular handsets this year, and other suppliers are following suit. Konka said it plans to make one-million sets in 2000 after it opens two additional production lines. The company also plans to invest in the development of chips and software for GSM cellular phones while extending annual production capacity to 5 million sets in three years. In addition to the Konka Group (Shenzhen), many other Chinese consumer-electronics manufacturers like the Haire Group (Tsingtao), the Panda Group (Nanjing), the TCL Group (Huizhou) and Xiamen Chinese Oversea Electronics (Xiamen) view the production of GSM cellular phones as a new strategic business. Mobile phones have become a popular consumer-electronics product in China, with annual demand reaching 27 million sets in recent years. A significant development in the Chinese cellular phone market in the past year has prompted local investors to rush to that sector. Ericsson, Motorola and Nokia, which together have dominated the Chinese handset market for years, control about 85 percent of the total market. But experts here said South Korea's Samsung grabbed 10 percent of the total Chinese market in 1999. International plans Konka established its telecommunications development center in October 1998 and opened China's first cellular phone production line last November. Cooperating with Lucent Technologies, Konka designed its own GSM phone based on Lucent's technology and is selling the phone through its nationwide sales network. It plans to sell GSM phones internationally in three years. "Our production and sales goal in the year 2000 is 1 million sets, and we are working hard to extend our production scale to 4 to 5 million sets in three years," said Wei-rong Chen, president of the Konka Group. "We'll establish our second production line in May and the third line in August. Our production capacity will reach 2 million sets per year with all three lines." The company also stressed its research capabilities for mobile phones. Chen said 10 percent of Konka's mobile telecommunications revenue would be invested in R&D activities, totaling at least $60 million per year. The company's Shenzhen and U.S. centers have recruited more than 100 engineers, the company said. In order to compete with other overseas and local brands, Konka said it plans to launch five new products this year and generate a new model every two months. It also plans to develop its own protocol software this year, which will enable it to design new phones based on other chip makers' solutions. Konka also plans to begin designing its own GSM chips in the next two years.