Cellphone makers need to call distributers in China

In an effort to secure a portion of the mobile-phone market in China, Taiwanese handset manufacturers should focus more on getting their brands recognized and developing distribution channels, an analyst said yesterday.

"With a relatively low mobile-phone penetration rate, a mobile phone represents higher social status in China," said Sonia Lu (呂懿慧), a researcher at the Industrial Technology Research Institute.

"Brand recognition is also critical in the China market."

Lu said efficient distribution channels can help improve brand recognition.

"A quality retail store will offer good after-sales services, which in turn will help enhance consumers perception of that brand," Lu said.

According to JP Morgan, handset demand in China is expected to reach 88 million units this year. The number is predicted to reach 150 million in 2004.

Nokia Oyj, Motorola Inc, Siemens AG, Sony Ericsson and Samsung Electronics Corp control more than 80 percent of mobile-phone market in China. Taiwanese makers such as BenQ Corp (明基電通), GVC Corp (致福) and DBTEL Inc (大霸) as well as Chinese companies such as TCL Mobile Communication Corp (TCL 移動信息) and Kejian Info-tech Co (科健移動信息) hold less than 20 percent of the market, Lu said.

Expanding market share

Chinese mobile-phone companies had an 8.8 percent market share in 2000, according to Gartner Dataquest, a global information technology market research center. They are expected to take a 12.4 percent share of the market this year and 14.7 percent by 2005, the center reported.

For the near-term, it will remain difficult for Taiwanese companies to make much headway in the China market.

"Since most Taiwanese phone-makers are not permitted to sell handsets under their own brandnames in China, there its little chance to promote brand awareness," institute researcher Wendy Huang (黃培雯) said.

In accordance with agreements made under the WTO, however, that limitation is set to end within the next three to five years, she said.

BenQ said that brand development and the creation of distribution channels will be its first priority in China.

"We are confident that BenQ will have strong competitive edge when the market is further opened," Victor Chen (陳維德), a director at BenQ's wireless business unit, said.

Five years ago, BenQ established sales channels in China for its computer peripheral products.

"BenQ has cultivated some brand recognition in China. Once we start to sell BenQ brand mobile phones, consumer response should be very positive," he said.