TCL to Produce 20 Million Cell Phones in 2004
Oct 12, 2004
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Chinese electronics giant TCL Corp aims to increase production to 20 million mobile handsets this year, including output from a venture with French telecoms gear maker Alcatel, the company said.

TCL Chairman Li Dongsheng said the firm made about 10 million handsets last year, but he expected the joint venture with Alcatel to boost demand from international markets and, subsequently, production.

"We expect our production to reach 20 million units and hope it could reach 50 million units in the long term," Li told reporters on the sidelines of a ceremony marking the establishment of the Sino-French venture.

TCL Communication Technology Holdings, the mobile phone-making unit of TCL Corp., will take an initial 55-percent stake under the joint venture deal signed earlier this year. TCL is to contribute 55 million euros (approx. U.S. $67.7 million) to the venture.

Alcatel will have 45 percent after contributing 45 million euros, including its mobile handset business in China.

The venture paves the way for Alcatel's eventual withdrawal from the money-losing handset business, while it marks another step by TCL towards its goal of becoming a global player by giving it access to Alcatel's technology and to markets in Latin America, Africa, and Europe.

Huizhou, Guangdong-based TCL is one of several home-grown firms, including appliance producer and cell phone maker Ningbo Bird, that have global ambitions.

TCL controls about 12 percent of the Chinese handset market -- the world's largest -- and gets access to GSM standard wireless technology, the dominant system around the world, without having to sacrifice margins by buying it.

TCL has been steadily gaining market share from foreign rivals such as Motorola Inc., Nokia, and Siemens AG. Analysts have warned that cut-throat competition in China's cell phone market could trim earnings growth for the company. (Reuters)

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