In an apparent move to revive its ailing market share, Nokia, the world's biggest cell phone maker, said yesterday it will expand its research and development operations in China.
Known for its sleek handsets and mobile innovations and regarded as an industry bellwether, the Finnish company last month shocked markets when it announced a fall in sales and profit and gave a flat outlook, citing increased competition from rivals like Motorola and Samsung.
Nokia said the R&D expansion in China will be "significant," including the establishment of a CDMA research center in Beijing. CDMA stands for Code Division Multiple Access, a technology that vies with GSM for dominance in the cellular world.
The company has long said China, where it employs 4,300 workers, is a major market and an important development center for expanding its Asian business.
"China is definitely a strategic part of Nokia's global R&D network," said Nokia's chairman and chief executive, Jorma Ollila. "With increasing depth in China's talent base and an improving regulatory environment for R&D, we see excellent opportunities to expand our collaboration with leading domestic institutions."
Nokia said 40 percent of the company's handsets will be designed at the Beijing center, and that it will work with 10 Chinese universities to develop new ideas.
After last month's earnings report, analysts said Nokia, had fallen behind recent trends in the mobile market, often set in Asia, like clamshell models.
The company also was deemed unable to provide a sufficient range of affordable models, including popular camera phones.
Nokia, whose mobile phone sales account for 80 percent of its total revenue, has focused increasingly on the handset market. Last month, it unveiled a stripped-down version of the N-Gage gaming deck series after the first version was seen as too cumbersome and expensive.
Nokia is still is the handset market leader, but earlier this month analysts estimated it had lost up to 5 percent of its market share and now leads with 29 percent, followed by Motorola with 16 percent and Samsung with 13 percent.
Nokia said it is still targeting a 40 percent market share in mobile phones, and plans to launch 40 new products this year, patching gaps in its selection of phones.
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