Mon, May 30, 2005 page10

• BenQ, Inventec get licenses to sell in China

  BRAND PRESENCE After a drawn-out approval process, the two handset makers will now be able to sell phones under their own brands in the market

  • By Lisa Wang / STAFF REPORTER
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  BenQ Corp (明基電通) and Inventec Appliances Corp (英華達), the nation's two largest mobile phone suppliers, obtained their long-awaited licenses from the Chinese authorities to sell brand-name mobile phones in the populous nation, company officials confirmed yesterday.

  That would give more strength for the two handset makers to muscle in the Chinese market in the future, the companies said. Dbtel Inc (大霸電子) is currently the only Taiwanese company allowed to offer branded cellphones in China.

  "Obtaining the licenses will give us a bigger chance to fortify our position in China's handset market," an Inventec official said in a company statement.

  Inventec grabbed two licenses enabling the company to offer mobile phones using GSM technology, also known as "2G" technology, and to provide phones with TD-SCDMA technology, a "3G" technology developed by China,

  BenQ had to wait about three years to get its GSM license, a company official confirmed yesterday.

  BenQ and Inventec are among a total of nine foreign companies granted licenses by the Chinese government last Thursday. Beijing tightly controls phone sales by overseas companies in China in order to protect its budding handset industry.

  Without the approval, BenQ and Inventec had to sell their mobile phones by cooperating with their Chinese partners CEC Telecom Technology Co (CECT, 中電通信) and SED (桑飛).

  With the license, Inventec aims to get a 3-percent market share in China this year, a company official told the Taipei Times on condition of anonymity.

  Stepping up its efforts to expand into the China market, Inventec early this month set up a retail handset unit in Shanghai to take responsibility for marketing and maintenance services.

  Despite the two companies' ambitions, an industry watcher said she was not so excited about the news.

  "Fierce competition in the Chinese market makes it a real challenge for handset suppliers to see gains there," said Peggy Chang (張意珮), an analyst with researcher Topology Research Institute (拓墣產業研究所) based in Taipei.

  A price war triggered by handset giants Nokia Oyj and Motorola Inc has driven smaller players, including Chinese consumer electronics maker Nanjing Panda Electronic Co (熊貓電子), off the battleground, Chang said.

  "I don't expect the license acquisition will boost handset sales for the two companies in the short term. The symbolic meaning is bigger than the substance," Chang said.

  Chang expected BenQ to make just 5 million handsets this year, only half of the company's target of 10 million units.

  Besides, there is an unresolved inventory problem, Chang added.

  Dbtel is a good example. Early this month, Dbtel blamed stiff competition and inventory problems for greater-than-expected losses in its Chinese unit last year.

  Handset sales in China are expected to grow nearly 18 percent to 100 million units from 85 million units last year, according to Topology's projection.
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