Chinese 3G brands increase share

Cheaper Chinese brandname handsets that are third-generation (3G) technology capable have begun to increase their share of the local market, and could play an important role in the nation's nascent 3G market, squeezing domestic mobile phone makers' development.

The state-run Chunghwa Telecom Co (中華電信), which is scheduled to launch high-speed mobile Internet service on Tuesday next week, will offer 10 3G-compatible handsets to lure interested consumers.

Among them, only the S80 model made by BenQ Corp (明基) is a Taiwanese brandname. Western handset vendors -- Motorola Inc, Sony Ericsson Mobile Communications Ltd and Nokia Oyj -- together have seven handsets on the list, while the other two handsets will be from China's Huawei Technologies Co (華為科技) and Amoi Electronics Co (夏新電子), Chunghwa Telecom's spokesman Shih Mu-piao (石木標) said.

"We have conducted a long period of quality testing on Huawei's U626 and Amoi's N5000, realizing that these Chinese companies' manufacturing capabilities cannot be underestimated," he said during a phone interview yesterday.

After assisting them to resolve bugs and improve phone operations, Chunghwa Telecom will formally unveil these two models next week with a competitive price under of NT$10,000 (US$310) apiece, Shih added.

Vibo Telecom Inc (威寶電信), which plans to launch a 3G service in October, said it will also introduce Chinese-made handsets to local customers.

However, the company appeared undecided as to which models from China's Ningbo Bird Co (波導), ZTE Corp (中興通信), Huawei or Amoi it would use to pioneer its 3G applications, a Vibo official said yesterday.

"It will depend on market response and rivals' strategies," said the official, who requested anonymity.

Compal Communications Inc (華寶通訊), Vibo's sister company, which focuses on making GSM phones on a contract basis, will invest in manufacturing 3G phones running TD-SCDMA technology in China, according to a local Chinese-language newspaper report.

Therefore, Vibo also has plans to introduce Chinese-made 3G handsets with WCDMA technology, which has been adopted by the nation's four mobile carriers, the report said.

Even Inventec Appliances Corp (英華達), one of the nation's leading handset vendors that owns the OKWAP brand, is still hesitating about tapping into the 3G market at home, although it has obtained a license to sell brandname 3G handsets in China.

"It's all about economies of scale," said a Chunghwa Telecom engineer, Jacky Lin (林志協).

Although Taiwan's top three mobile service providers will all launch 3G services by the end of this year, skepticism about the potential of the local market remains, considering the high price tags for 3G handsets, he said.

This has made local handset makers adopt a wait-and-see attitude toward the emerging 3G market, while their Chinese counterparts have churned out 3G phones for sale around the world.

Even though Chinese-made GSM, or 2G, phones account for a minimal market share in Taiwan due to strong competition from various international vendors, Chinese 3G handsets will play a key role here with the advantage of lower price tickets, Shih said.

"Despite their little-known brandnames, Chinese-made 3G phones are expected to be able to compete neck-and-neck with South Korea's LG and Samsung handsets here," he said.