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issue: February 2003 APPLIANCE Magazine

China Report
China's Domestic Mobile Phone Makers

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This report is filed by Clint Stevens, China Correspondent, APPLIANCE magazine.

Three years ago no one had a local brand mobile phone in China. Everyone competed to have the newest and most advanced offering from Nokia, Motorola, or Ericsson.

Things have changed. Local manufacturers have quickly emerged and gained market acceptance. Now, you increasingly see brands like Bird, Amiosonic, and TCL. In fact, local brands are expected to hold 20 percent of China's 200 million-plus user market by the end of the year.

TCL, one of China's largest domestic mobile phone makers, is planning to launch a multiple-brand strategy this year in an effort to increase its share of the country's still growing mobile phone market. China surpassed 200 million mobile phone users late last year, solidifying its position as the largest mobile phone market in the world. Unlike other markets, Chinese mobile phone users are constantly willing to spend money to upgrade to the newest models on offer, providing mobile phone makers great growth opportunities. TCL had been stuck in the saturated television market slashing prices in a war that engulfed all of China's domestic television makers. TCL Mobile Communications LTD was established 3 years ago to take advantage of the growth and profit opportunities in China's mobile phone sector. Successful product and marketing strategies have helped TCL capture more than 10 percent of China's fragmented mobile phone market. The company is reportedly now the third-largest seller in China, behind Motorola and Nokia. To build on their success so far, TCL will launch six different brands to focus on different areas and different users under the TCL umbrella later this year. "China's mobile phone market is so diverse, and we believe multiple-branding will meet potential buyers' diverse needs," said Du Xiaopeng, vice-president of Guangdong-based TCL Mobile Communications Ltd. China's domestic mobile phone makers do not possess a technological core competency and basically operate as assemblers. So they must rely on their local understanding to provide exactly what the consumer wants. It is that local market knowledge that has prompted some of TCL's most successful product offerings. TCL previously announced it would offer a line of more masculine handset designs for Chinese men. Larger handsets in darker, more masculine colors have made up about 10 percent of TCL's phone sales since they were launched a few months ago.

With other more fashionable designs and bright colors, TCL's cell phones have also been popular among Chinese women. TCL was also the first company to introduce cell phones inlaid with diamonds that won applause from Chinese users who hope such luxurious phones symbolize their wealth. TCL has quickly emerged as a force in China's mobile phone market. TCL has increased annual production capacity to approximately 12 million units and expects sales to grow by 50 percent next year. With their new multi brand strategy, TCL promises to further build their market share.


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