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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (4294)	11/4/2000 12:27:33 PM
From: foundation	Read Replies (1) \| Respond to of 197201

"China bans mobile makers.." ---------- "Beijing would not permit new foreign investment in the mobile makers, either as joint ventures or wholly owned foreign companies. He also said existing foreign joint ventures must export at least 60 per cent of output and by the end of next year must reach a local content rate, by value, of at least 50 per cent. Mr Wang said the access of these foreign joint ventures to the domestic market would be determined by their level of exports and localisation of components." So, NOK and ERICY and MOT will have no new joint ventures with China manufacturers, or new ventures of their own. Not for GSM - not for GPRS - not for wCDMA. NOK and ERICY and MOT must export at least 60% of the phones produced in their China ventures. At least 50% China components are required. And access to China's markets will be contingent on compliance. How will this disrupt existing markets in Europe and elsewhere? Where will they export these GSM handsets - Europe?? South America? If China's buildout requires 1 mil handsets - they must produce 2.5 mil. Are phones for China's and Europe's markets interchangeable? Unlikely. Are China plants tooled for China phones? Likely. How will European Organized Manufacturing and Labor feel about China phones being imported? How will consumers respond? How will this effect margins - margins they've already cut to compete with China manufacturers to maintain market share? How does this effect NOK and ERICY and MOT's projected margins for GPRS and 3G in China? Will they be allowed to expand existing ventures to include 3G?? With these requirements, can they afford to do business in China? Interesting development with pregnant ramifications... here is article's URL - scmp.com