Siemens To Turn Up Heat In China
By Carlo Longino, Mon May 03 14:30:00 GMT 2004

The German company has signed a deal with China's second-biggest handset vendor to sell Siemens phones throughout the country and jointly develop devices for the Chinese market.

Underlining the importance of the Chinese market, Siemens inked a deal with Ningbo Bird, China's number-two handset maker, so that Ningbo will sell Siemens phones in its 30,000 stores across the country. Siemens had about 5% market share in China last year, but its handsets were only sold in major cities. Ningbo Bird has carved its niche in second- and third-tier cities, which are still big by European standards.

The Chinese company will also buy mobile-phone platforms from Siemens, and the two will work together to design and develop phones for the Chinese market in what could prove to be a solid combination, combining a local company's strengths in catering to consumer desires and a foreign company's technical strength and R&D.

French manufacturer Alcatel recently said it would combine its handset business with China's top manufacturer, TCL, in a joint venture. While some speculate it's simply a prelude to Alcatel exiting the handset business all together, it's also a play by the company to kickstart its growth in a new region as its European sales falter. But with China's top 2 vendors locked down, there are few remaining options for other foreign handset makers that want to partner up.