Siemens, Nokia Invest In China
By Carlo Longino, Fri May 21 15:15:00 GMT 2004

The companies said this week they'd expand research and manufacturing operations in the country, hoping to cash in on the world's biggest market.

Siemens announced it would invest 1 billion euros in the country to boost its handset production there by 40 percent next year in an effort to double its Chinese sales in five years. While Siemens is the world's No. 4 handset vendor, it ranks a distant ninth in China with about 5 percent market share, a figure it aims to double within 3 years.

The company recently signed a deal with Ningbo Bird to take advantage of the local hotshot's nationwide distribution links, and it formed a $100 million joint venture with Chinese network equipment maker Huawei for TC-SCDMA 3G products, and is also testing WCDMA gear with carrier China Unicom.

Nokia said earlier today it would significantly boost its research presence in the country, establishing a CDMA R&D facility in Beijing, forming a local technology platforms unit to work with Chinese developers, working with universities to teach Symbian technology and starting a post-doctoral program to encourage research into Asian user interfaces, 3G technology, IPv6 and Chinese software applications.

The new CDMA center will focus on products using that standard in the Chinese market. Nokia's given CDMA products a renewed emphasis in recent years, re-entering the North American CDMA market as well as developing CDMA handsets for emerging markets like China and India.

Significantly, the company said some 40% of the handsets developed by its Mobile Phones Business Group, which is responsible for less advanced phones than the company's Multimedia group, will be created at its Beijing Product Creation Center. Many of the Mobile Phones groups' handsets end up in China and other emerging markets, so it makes sense to develop them there. Perhaps it's also an attempt to gain some lost ground on Chinese manufacturers, whose products have been more in touch with local desires and quicker to capitalize on changing tastes.

While the companies are in slightly different places -- Siemens is building momentum while Nokia's handset share is slipping -- they're both looking for a boost from the Chinese market, a place where both have played second fiddle to local and international rivals.