Motorola expresses concern over Chinese imports

Motorola Inc will continue teaming up with local handset manufacturers, though it opposes government plans to allow the importation of cheaper China-made handsets in the near future, an executive of the company's Taiwan office said yesterday

"The disagreement [between Motorola and the authorities] over the handset importation issue won't hurt our relationship with local partners," Ann Chen (陳怡安), communications manager of Motorola Electronics Taiwan Ltd, said yesterday.

Motorola brought nearly NT$70 billion from Taiwanese companies last year, of which NT$35 billion was chip orders to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電). The remaining NT$35 billion was handset orders to BenQ Corp (明基電通) and Compal Communications Inc (華寶通訊).

A Chinese-language newspaper reported yesterday that Motorola Taiwan may consider cutting manufacturing orders to Taiwan if the government decides to lift a ban on the importation of China-made handsets this year.

The report said Motorola's financial commitment to Taiwan may be altered if the importation ban is lifted, citing Lin Kun-chin (林坤進), a manager at Motorola Taiwan's government relations division.

Chen didn't deny the story, but she said it represents Lin's personal view only.

The company is standing its ground that lifting the ban on Chinese phones is bad business.

"Because prices of China-made handsets are much cheaper than most Taiwanese and international brands, the importation may ruin the market balance," said Frances Yi (衣惠霞), a marketing manager at Motorola Taiwan.

But the world's second largest cellphone company's opposition to the opening may reflect a fact of increasing competition in this line of business, because Motorola's competitive edge may disappear once the ban is lifted, one industry watcher said.

"Motorola's strong ties with Taiwanese handset manufacturers make it easy to sell products domestically," said Mark Yen (顏明賢), a telecom analyst at Polaris Securities Co (寶來證券).

Other handset brands such as Sagem SA and Royal Philips Electronics NV shipping products from China are not allowed to sell products directly to Taiwan, Yen explained.

This is the second time Motorola objected to the planned lifting of the ban in the past six months.

In March opposition from Motorola and Taiwan Electrical and Electronic Manufactures' Association (TEEMA, 電電公會) persuaded the Board of Foreign Trade to delay opening the market to China-made handsets that month.

While the import ban must gradually be lifted in accordance with WTO rules, one industry representative said the ban on Chinese handsets shouldn't be lifted until China opens its market to Taiwan-made handsets.

"We hope to reach a reciprocal trade concession ... that is China opens its market to us in return," said Rock Hsu (許勝雄), chairman of TEEMA, an association composed of several local handset makers, such as BenQ, Compal and DBTEL Inc (大霸).

Under current Chinese regulations, Taiwanese phone-makers are not permitted to sell handsets under their own brand names in China.

"We hope the issue on both sides can be resolved by the end of the year," Hsu said.

According to Ho Yu-liang (何裕良), a section chief at the Board of Foreign Trade, the government is trying to work out the best solution after collecting opinions from industry professionals and is expected to make a report by July 15.