The firm Sony Ericsson Mobile Communications Ltd will set up a research and development center in China by the end of the year to develop handsets specifically for the world's largest mobile-phone market.
The joint venture between Sony Corp and Ericsson AB expects approval from the Chinese government soon, President Katsumi Ihara told Bloomberg Television in Singapore, where the company rolled out a new lineup of models. The center will develop handsets based on its research of Chinese consumers' tastes, which Ihara said may differ from Europeans.
China overtook the US as the No. 1 mobile-phone market last year, though only about one in eight people in the country own a handset. Sony Ericsson is counting on growth in the world's most populous nation to spur demand as markets elsewhere become saturated. Cell-phone sales fell for the first time last year.
"There's a huge potential in populous markets, such as China, Indonesia and India," Ihara said.
The research center in China will develop phones operating on the Global System for Mobile Communications standard, he said.
Sony Ericsson this week unveiled four new mobile-phone models, broadening its product range to compete with industry leaders Nokia Oyj and Motorola Inc. The new phones, some of which are lower-priced than handsets the venture currently sells, feature color screens and multimedia messaging capabilities.
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