Hon Hai Precision Industry Co (
"Hon Hai is expected to begin making handsets on a contract basis for Nokia in the second half of next year," said Henry Wu (
Hon Hai now only makes printed circuits and assembles handsets for Nokia.
Hon Hai may receive orders for as many as 10 million handsets over the course of the first year, he said.
Local Chinese-language media yesterday reported that Hon Hai had received original-design-manufacturer orders from Nokia to produce folding as well as color-screen handsets.
The deal would make Hon Hai the only Taiwanese handset maker to make Nokia mobile phones.
Edmund Ding (丁祈安), spokesman of Hon Hai refused to confirm the reports, saying the company is "still trying to formulate a response."
Shares of Hon Hai rose NT0.5 to close at NT$130.5 per share on the TAIEX yesterday.
Hon Hai has been working to build relationships with major brands and to upgrade its handset production ability, Wu said. Location is an important factor in relationship building, he said.
"Hon Hai built its factory in Tianjin, right next door to Nokia, and Hon Hai hired away a number talented people from its rivals," Wu said.
According to Garner Dataquest, a research center based in San Jose, California, Nokia is the world's largest mobile-phone brand, commanding a 35.9 percent market share.
US-based Motorola Inc and South Korea-based Samsung Electronics Corp were ranked No. 2 and No. 3 with 14.4 percent and 10.6 percent of the global market share, respectively, as of the third quarter.
"Nokia's market share in China, however, has declined since the second quarter," said Ann Liang (
The center's latest report showed Nokia's market share in China is below 20 percent, lagging behind Motorola.
The analyst said Nokia needs to counter by designing phones specifically for the Chinese market.
"Nokia handsets are highly accepted in Western countries, but the public's taste in China is quite different," she said.
Chinese prefer folding mobile phones with fashionable designs on the cover, Liang said.
Samsung's phones -- which are primarily folding models -- are highly popular in China, Liang said.
In the third quarter, Samsung surpassed several European brands, including Siemens AG, Alcatel and Philips Electronics NV, to become No. 3 in the China market, Gartner said.
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