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Synnex inks deal with Nokia Oyj

Synnex Technology International Corp (聯強國際), Asia's largest information technology product distributor, said yesterday that it has signed an agreement with Nokia Oyj to sell its handsets in China, tapping into one of the fastest-growing mobile phone markets.

"China is a huge market that grows rapidly," John Kuo (郭晉彰), director of Synnex's planning and management division, said in a telephone interview.

"We are very positive about the cellphone retailing business in the market, which will give a boost to the company's revenue starting next year," he said.

More than 100 million handsets were sold in China last year, and the figure is expected to increase to 150 million this year, Kuo said.

Nokia, the biggest mobile-phone maker in the world, took over 35 percent of share as the best-selling brand in China, he said.

In contrast, there were about 7 million mobile phones sold in Taiwan last year, Kuo said.

The product mix in China will differ from that in Taiwan due to the comparatively low purchasing power of the Chinese, which would lead to a lower average selling price, Kuo said.

Synnex will start selling Nokia mobile phones in its 35 outlets in China next month at the earliest, he said.

Synnex entered the Chinese market in 1997 and has since established 35 stores to sell electronic products.

Sales in China have become a main pillar of the company, and the contribution from that market will keep rising after joining forces with the handset maker, Kuo said.

Some 70 percent of its consolidated revenue this year would come from overseas markets, while more than half of the overseas sales will be contributed from China, Synnex said.

The company declined to give a specific financial forecast.

Banking on the growth momentum, Synnex built a logistics center in Shanghai in June 2005 and is constructing operations centers in Beijing, Guangzhou, Nanjing and Chengdu.

Synnex posted sales jumped by 21 percent to NT$40.2 billion (US$1.22 billion) for the second quarter, a record high for a single quarter. Sales increased by 14 percent to NT$78.7 billion for the first half of the year.

Shares of Synnex rose 4 percent to close at NT$65 on the Taiwan Stock Exchange yesterday, outperforming benchmark TAIEX's 0.98 loss.

Synnex announced the deal with Nokia after the market closed.

Meanwhile, Synnex denied a report in the Chinese-language Commercial Times that its earnings per share (EPS) would rise to NT$3.1 this year. Its EPS was NT$2.65 last year.

"That is merely media speculation," the company said in a filing to the Taiwan Stock Exchange.
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