This article is a couple of days old...but I dont remember reading it.
bloomberg.com
China Orders Mobile Phones Using Qualcomm Technology (Correct)
By Kenneth Wong
China Orders Mobile Phones Using Qualcomm Technology (Correct)
(Corrects 14th paragraph of story that ran March 8 to say Motorola was invited to meeting.)
Beijing, March 8 (Bloomberg) -- China's government ordered mobile-phone makers to increase production of handsets to help China United Telecommunications Corp. expand the use of a new wireless network based on technology developed by Qualcomm Inc.
The government ordered 12 of the 19 licensed makers of code- division multiple access cell phones, or CDMA, to have 700,000 units ready by early May, according to manufacturers who attended a government meeting today and asked not to be identified.
Qualcomm, which charges licensing fees for the use of its standard and sells chips based on those patents, fought for a decade to get a CDMA network built in China. Paul Jacobs, president of Qualcomm's wireless and Internet division, was in Beijing this week. China United's CDMA network started running in January.
``The reports indicate that this is a positive move to move the CDMA market along,'' said Qualcomm spokeswoman Christine Trimble, who declined to comment on the order for CDMA phones.
China United, with 28 million customers, has only 439,000 users on the $2.9 billion CDMA network, blaming slow growth on a handset shortage. Handset makers have resisted increasing production because they see only a limited market.
China ``had issues in the beginning with the availability of handsets, because they made a modification to the handsets from what other people were using,'' Qualcomm Chief Financial Officer Anthony Thornley said Wednesday in an interview. ``But I think those things will get behind them and their growth will accelerate.''
Biggest Market
China is the world's biggest mobile-phone market, with about 150 million users. The competition for control of the market has focused on technological standards as much as on market share. All other systems use the rival global system for mobile communications, or GSM.
Shares of San Diego-based Qualcomm today rose $2.36, or 5.7 percent, to $43.80. They've fallen 23 percent in the past year.
In his Wednesday interview, Thornley said Qualcomm still expects there will be 4 million CDMA users in China this year.
The 12 makers of CDMA phones, including China Kejian Co., which makes handsets with Samsung Electronics Co., and Haier Group, were called to a meeting in Beijing today, where Ministry of Information Industry official Wang Jianzhang told them to sign agreements with China United, the country's second-largest mobile phone company, by March 18.
Too Much Profit
Wang, director general of the ministry's planning department, also told phone makers that their profit margins are too wide.
Chinese mobile-phone subscribers haven't switched to the CDMA network because they're concerned the promise of higher-quality connections aren't worth the extra cost, analysts have said. Most of the 439,000 users transferred from a now defunct network that used an older version of CDMA.
China United's Hong Kong-listed unit, China Unicom Ltd., is leasing its parent's CDMA network in 12 richer provinces. China Unicom said yesterday that China United will buy 500,000 handsets this month through Unicom Guomai Communications Co.
The government called phone makers to today's meeting based on potential demand for their phones, as measured by China United, the unidentified officials said. Motorola Inc. marketing manager Grant Zhou attended the meeting for the world's second-biggest handset maker, Motorola spokeswoman Jennifer Weyrauch said. Wang invited Motorola, the only foreign company licensed to make CDMA phones in China, she said.
Apart from Kejian and Haier, other makers invited included ZTE Corp., Eastern Communications Co., Guangzhou Soutec Co., Qingdao Hisense Group, China Electronic Corp., TCL Group, Datang Telecom Technology Co., Shandong Langchao Group, Beijing Post & Telecom Equipment Co. and China Zhenhua Science Technology Co.
Zhou Xiaoping, vice president of Unicom Horizon Mobile Communications Co., the China United unit that runs the network, said the government called the gathering ``just an operational meeting.'' He declined to elaborate. Information industry ministry spokesman Wang Lijian wouldn't comment.
Finland's Nokia Oyj is the biggest maker of mobile phones. |
