China

Huawei gearing up for North American expansion

Jim Barthold — Fri, 24 Oct 2008 10:05:07 -0400

Chinese equipment vendor Huawei has its eyes on the North American market where it plans to make a splash within the next five years. Following its success conquering China, Europe and some emerging markets, Huawei's five-year strategy now includes a push into the North American space following a pattern of "convergence, broadband, green and evolution," according to Shao Yang, vice president of marketing.

According to Yang, Huawei's customer list includes 70 percent of the top 50 telecom providers worldwide, including an infrastructure contract it inked with Leap Wireless in 2006.

Yang said that besides technology, Huawei brings an open ear to the market. "We have a strong will to listen to (clients to) help them achieve what they demand," he said.

For more:
- see this article

Related stories:
Report: Huawei to sell mobile devices unit
Huawei's Mobile Infrastructure Star Is Rising as Alcatel-Lucent's Declines

Study says mobile sector booming despite financial turmoil

Sue Marek — Tue, 23 Sep 2008 12:12:45 -0400

A study by Portio Research says that the worldwide mobile industry appears to be resilient to the financial turmoil that many other industries are experiencing. The top growth markets for wireless are China and India (not surprising), which will contribute more than 1 billion additional subscribers between 2007 and 2013. Brazil is a distant third with 132 million additional subscribers expected by 2013.

However, the study did note that mobile voice and data revenues continue to decline with mobile ARPU expected to fall from $23.2 in 2005 to $15.8 by the end 2013, largely because the additional subscriber growth will come from low per capita income markets.

For more:
- see this article

Related article:
China and India lead worldwide telecom carrier capex and revenue growth

Boos and catcalls rain down on Alcatel-Lucent CEO

Lynnette Luna — Fri, 20 Jun 2008 10:54:51 -0400

An article in BusinessWeek is asking whether Alcatel-Lucent CEO Patricia Russo can hold on at the company. During the company's annual shareholders' meeting in Paris at the end of May, boos and catcalls surrounded her as she addressed investors. Since Lucent's merger with Alcatel in 2006, the vendor has posted six straight quarterly losses and has taken more than $4.5 billion in writedowns, while its stock has plummeted 50 percent.

The report notes that while Alcatel-Lucent is struggling with economic turmoil in the market, tight credit and stiff competition from vendors such as China's Huawei, it has fared worse than its competitors. One other interesting bit of information: Outside of the U.S., Huawei is just about even with Alcatel-Lucent as the third largest supplier of GSM networks.

For more:
- read BusinessWeek

Related stories:
Could Alcatel-Lucent rule change doom Russo? Russo article
Alcatel-Lucent shareholders ease rules for CEO removal. Alcatel-Lucent story

Sharp to sell cell phones in China

Sue Marek — Fri, 13 Jun 2008 12:06:34 -0400

Japanese cell phone manufacturer Sharp announced that it will start selling devices in China, beginning with the launch of FH9010C handset later this month. The phone is targeted at affluent Chinese cell phone users.

Sharp's move into China is part of the company's strategy to break into overseas wireless markets as its domestic business suffers from increased competition. In April, Sharp's wireless business dropped 23.3 percent.

For more:
- see this article

China, India best bet for Alca-Lu's fortunes

Lynnette Luna — Mon, 02 Jun 2008 12:12:28 -0400

During the company's annual shareholders' meeting in Paris last week, Alcatel-Lucent Chairman Serge Tchuruk revealed that the telecom equipment sector was "going through a new crisis" characterized by dramatically falling prices that are offsetting in gains in sales volume.

So Alcatel-Lucent should be keeping its fingers crossed as regulators in both China and India--two countries considered to have the most wireless growth potential--indicated last week they would move forward with licensing 3G networks. India is also looking to license WiMAX networks. 3G is beginning to mature in many markets with occasional contracts for capacity upgrades and now an economic malaise is threatening even the sparse contracts for upgrades.

While these markets offer the biggest growth potential, they are also notorious for delays and government red tape. You can bet Alcatel-Lucent and other vendor representatives are doing their best to fight for 3G in these countries. The worst thing that could happen is if China's regulators scrap 3G altogether and wait for 4G, which is one rumor that has been circulating for some time. --Lynnette

China's operators move ahead with restructuring

Lynnette Luna — Mon, 02 Jun 2008 11:09:28 -0400

China's operators are moving ahead with the country's planned restructuring of the telecoms sector, swapping assets and making acquisitions via agreements worth billions. China Unicom announced China Telecommunications Corp. is purchasing Unicom's CDMA business for about $15.9 billion, creating one of the world's largest operators with more than 43 million CDMA customers and more than 216.3 million fixed-line subscribers, including 38.4 million broadband customers.

In a deal valued at $56.3 billion, Unicom is also merging its GSM business, which supports about 125.4 million subscribers, with fixed-line operator China Netcom, an operator that has about 109 million customers. Each share in Netcom will be swapped for 1.508 Unicom shares.

In another merger, mobile giant China Mobile Communications, which supports almost 400 million subscribers, is combining with fixed-line operator China TieTong Telecommunications.

The question now is: Will we begin to see tenders for 3G networks? China's regulators recently promised three 3G licenses will be tendered once restructuring is complete.

For more on this story:
- read Unstrung

Related stories:
Too good to be true? China plans to issue 3G licenses. China editorial
China continues to hedge on 3G. China 3G story

Dior follows in Prada's footsteps with fashion phone

Sue Marek — Wed, 21 May 2008 12:12:56 -0400

Luxury designer Christian Dior is following in the footsteps of Prada and Dolce & Gabbana by unveiling a line of high-end mobile phones priced around $5,000. The phones will be manufactured by ModeLabs Group and are expected to be particularly popular with consumers in China and Russia. Dior expects to sell about 10,000 of the pricey devices per year.

The first Dior phone is a clamshell device with a touchscreen and camera. The designer also plans to offer a miniature phone headset the size of a USB key so that women can clip the phone to their purse instead of rummaging through their bags to find their phones. More specifics on the device haven't been released yet. Are you ready to spend $5,000 on a phone without knowing more details?

Rof more:
- see this WSJ article

Click here to see pictures of the Dior phone.

Analyst: China's 3G still years away

Fri, 18 Apr 2008 06:59:54 -0400

Despite the country's promise to roll out its TD-SCDMA 3G standard before the Olympics, one analyst contends that based on the average trial periods of new wireless networking technologies, the likelihood of TD-SCDMA launching before the Olympics is very unlikely. In fact, the technology could take a few more years to launch. The Ernst & Young analyst also predicted that China might end up awarding licenses for WCDMA and CDMA2000 by the time TD-SCDMA rolls out.

For more on the analyst's predictions:
- read this China's 3G TD-SCDMA article

Forecast: Nokia's Q1 net profit up 42 percent

Tue, 15 Apr 2008 06:59:58 -0400

According to a poll of financial analysts conducted by Factset, Nokia's first quarter profit is expected to hit $2.19 billion, a 42 percent increase over the year-ago period in which the company posted $1.54 billion in profits. Analysts expect Nokia's sales to rise 28 percent to $19.9 billion as a result of strong growth in emerging markets. Nokia affirmed in late March that its global unit volume growth would rise 10 percent this year despite the economic downturn that has hurt some of its competitors.

"The focus on Nokia will be on the ASP (average selling price) as the market mix changes with stronger than expected BRIC (Brazil, Russia, India, and China) countries and weaker than expected mature markets," said Stockholm-based Kaupthing analyst Per Ekstrand. "We'll also be watching for the effects of the declining U.S. dollar."

The handset maker's ASP is expected to fall from its fourth quarter level of $131.

For more on analysts' forecast for Nokia:
- read this article from Dow Jones

ALSO NOTED: No AT&T-CNN mobile TV exclusive?; Adobe merges units; and much more...

Tue, 08 Apr 2008 06:59:50 -0400

> Adobe merges mobile and platform units. Article

> MobiVentures acquiring Purepromoter. Article

> Gumiyo, HomeNet drive mobile web for car dealers. Article

> Intel Capital unveils another China fund with $500 million in it. Article

And Finally... Former professor invents Braille handset with vibrations. Article

Nokia: Replacement sales to buoy earnings

Mon, 24 Mar 2008 07:59:57 -0400

Nokia went on the defensive after Sony Ericsson announced that its handset sales are slowing down and Texas Instruments said it expected 3G chipset sales to fall: The Finnish phone maker said that it expected the replacement handset market to boost its market share in 2008. Nokia said replacement sales would account for slightly over 70 percent of its volume in 2008, after accounting for just less than 70 percent in 2007. The company expected color screens, cameras, email applications and music players to help drive the market. Nokia noted that growth in China and APAC countries have boosted the falling sales in EMEA, North America and Latin America.

Also, InterDigital announced today that it was in talks with Nokia over settling a patent dispute over 3G technology. While Nokia confirmed that the parties were in talks, neither side would comment further.

For more on Nokia's expectations:
- read this article from Washington Post
- check out this AP article about InterDigital

China Mobile subscribers up 23 percent

Wed, 19 Mar 2008 07:59:54 -0400

China Mobile beat analyst expectations by increasing its net profit 32 percent, thanks to some 68 million new subscribers added during 2007. Net profit grew to about $12.32 billion for the year. Subscribers totaled 369.34 million at the end of 2007, up from 301.23 million at the end of 2006.

"The continued rapid growth in China's economy, rising consumer purchasing power and the development of the rural economy is driving tremendous demand for communication and information services," said China Mobile chairman and CEO Wang Jianzhou.

For more on China Mobile's growth:
- read this article from the WSJ (sub. req.)

Related Articles:
China Mobile in talks for iPhone deal Article
400K unlocked iPhones on China Mobile's network Article

DEALS: Nokia-Postel, Sprint-HTC

Thu, 13 Mar 2008 07:59:52 -0400

DEALS
WHO	WITH	WHAT	SCOOP
Sprint	HTC	Sprint announced that it would release a software update for its HTC Mogul handset that would allow the phone to connect to its EV-DO rev. A network.	It will be the first handset to connect to the data network, which has been restricted to data cards for laptops up until this point.
Nokia	Postel	Nokia has renewed its distributor deal with China's Postel for $2 billion worth of phones in 2008.	Last year's deal, however, was for $2.5 billion worth of phones.

Nokia's $2B China deal is lower than in 2007

Fri, 07 Mar 2008 06:59:57 -0500

Nokia has renewed its distributor deal with China's Postel for $2 billion worth of phones in 2008. While the figure is still impressive, Redeye analyst Greger Johansson, points out that the contract is similar to one the companies forged in 2007. Last year's deal, however, was for $2.5 billion worth of phones. The analyst noted that the decreased value of the deal could be because of increasing marketshare of domestic handset makers in China or that some of the 2007 handsets have yet to move.

For more on the deal:
- read this article from MarketWatch

Report: 400K unlocked iPhones on China Mobile

Tue, 19 Feb 2008 06:59:54 -0500

According to a report from In-Stat, as many as 400,000 unlocked iPhones have found their way onto China Mobile's network. That figure makes up more than 10 percent of Apple's 3.7 million iPhones sold in 2007 and could account for the "missing iPhones" that many industry pundits pointed out during Apple's last quarterly results. While In-Stat points out that this is a lost opportunity for Apple in that it won't recoup revenue from a deal with China Mobile, it does show that people want the iPhone.

For more on unlocked iPhones in China:
- read this article from CNET

Chinese vendors strike fear

Mon, 04 Feb 2008 06:59:59 -0500

Thanks to the heavy competition coming from Chinese vendors the infrastructure business is a low-margin business. Indeed, Huawei and ZTE are striking fear in the likes of Ericsson, which partly blamed its dismal results in the fourth quarter of last year on Chinese competition. And it's with good reason. Huawei saw some significant momentum in 2007 with UMTS deals with the industry's largest operators: Telecom Italia, Vodafone and T-Mobile International. ZTE, which generates much of its sales from wireless infrastructure and devices, is expected to report an increase in annual profits of at least 50 percent when it reveals its full 2007 earnings results.

But to reach the upper echelon of the mobile infrastructure world, Huawei and ZTE need to strike some significant wins in the U.S. market, where operators seem to be fiercely loyal to their infrastructure vendors. ZTE and Huawei have racked up some wins. Huawei has a CDMA deal with Leap Wireless. ZTE has a WiMAX device deal with Sprint, which it no doubt hopes will translate into infrastructure too.

But Huawei and ZTE have to be wringing their hands over the prospects of the 700 MHz auction. The playing field will be even as most operators will likely look to deploy an OFDMA-based system such as WiMAX or LTE. As such, we should see some interesting dog fights for new contracts going forward as Alcatel-Lucent, Ericsson and Nortel can't afford to get pushed out of one of the world's most important markets. That's good news for license winners.--Lynnette

Analyst: Motorola may exit handset biz

Tue, 29 Jan 2008 06:59:56 -0500

Nomura International analyst Richard Windsor is floating the possibility of Motorola exiting the handset business to focus on its enterprise and government businesses. Windsor also poured cold water on recent speculation that Chinese vendors could buy Motorola since those vendors don't know how to fix Motorola's problems. The analyst claims that Motorola's problems stem from platform and software issues more so than hardware.

For more on Windsor's speculation:
- read this brief from MarketWatch

Kyocera to pull out of China's handset market

Tue, 29 Jan 2008 06:59:55 -0500

Japan's Kyocera has announced plans to leave China's thriving mobile handset market because of mounting losses and cheaper producers. Kyocera will dissolve its joint venture with Chinese electronics part maker Zhenhua Science & Technology. The company also recently announced plans to buy Sanyo Electric's mobile phone business. Kyocera aimed to sell high-end phones with cameras and music players, but China's market is flush with lower-priced handsets from Nokia and Motorola.

After posting losses between $6.6 million and $7.5 million in China, Kyocera President Makoto Kawamura said: "We decided there was no prospect for our business in China."

For more on Kyocera's decision:
- read this article from Jongo

Emerging markets boost Nokia

Fri, 25 Jan 2008 06:59:55 -0500

Nokia's strong fourth quarter was partly thanks to its market dominance in key emerging markets like China, India, the Middle East and Africa. Nokia sold a record 133.5 million phones during the quarter, while Motorola's handset sales fell 38 percent during the same period. Nokia said it saw the strongest growth in the Middle East and Africa, where shipments were up 52.3 percent, while sales grew in APAC and China as well. Sales in North America and other mature markets, however, slid during the quarter. Nokia is beating its competitors because it's in a better position to scale its products, and Motorola took note of that:

"We need to be not so much a producer of volume to get scale," said Motorola CFO Tom Meredith. "We've got to produce the right design point with the right features and functionality at the right cost. And if we do that, scale will be less of an obstacle than it is perhaps today."

For more on Nokia's emerging market dominance:
- read this article from CNET

Apple and China Mobile end iPhone talks

Mon, 14 Jan 2008 06:59:56 -0500

China Mobile said talks with Apple over bringing the iPhone to its subscribers have ended, but the carrier did not specify why the talks broke off. The news comes on the heels of a report from China-based news portal Sina.com, which claimed that China Mobile and Apple failed to agree on revenue sharing terms during their preliminary discussions. According to the report, China Mobile would not accept Apple's request for between 20 percent and 30 percent of user fees from future iPhone users. Pundits believe that China Unicom has a good chance of inking the deal with Apple for the Chinese market now.

For more on the reports:
- read this article from the WSJ

Related:
- Previous coverage on the deal-making. Article