Competition heats up in Chinese market

10 Jan 2003

SHANGHAI: On a day when Motorola should have been basking in its own glory at its annual media conference in Shanghai, it emerged yesterday that its main rival for the global number two spot, Samsung, has Beijing’s approval to sell its handsets directly to the Chinese market.

The deal is something of a coup for Samsung, which is rapidly becoming a contender in the global handset market.

The Korean manufacturer is Motorola’s main rival for the coveted number two position behind industry giant Nokia. Samsung’s handset business has grown remarkably in recent times. According to Gartner Dataquest’s most recent figures, sales growth for the firm was 52.4pc in the third quarter of last year compared to the third quarter of 2001.

China is rapidly emerging as a key market for industry players. Although not the most advanced market, through sheer force of numbers it is becoming significant. With a population of over 1.2 billion, China is the world’s biggest handset market.

Mobile phones have begun to take off in the country of late and recent figures estimate one million new mobile subscribers every month. With figures such as these, even a small slice of the Chinese market could prove extremely lucrative for any manufacturer.

In targeting China, Samsung will no doubt be hoping to erode the market share of its main rivals, Nokia and Motorola. The US firm currently holds the top spot in the country and China holds pride of place in its strategy of investing in emerging markets.

For example, a Motorola executive confirmed that Russia, Turkey, Israel, South Africa, Nigeria and Argentina were being identified as key areas for growth. The logic behind the strategy is that a much better return on investment can be achieved in comparison to mature European markets.

By Dick O’Brien