Ningbo Bird Co Ltd, one of the leading Chinese handset makers, is to expand its presence in the world market this year in accordance with its international strategy, according to Bird's president Xu Lihua.

"We see great potential in overseas markets and are going to tap them step by step," he told China Daily.

Bird is among a handful of Chinese firms that harbor global ambitions to escape strong competition at home.

"This year, we will develop new handsets specifically to target overseas markets," Xu said.

The company will further focus on overseas markets such as Russia, Eastern Europe, India and Southeast Asian countries this year, according to Xu.

"For example, we would like to treat the Indian market like the domestic market given its size and the stable economic development of India," he said.

Company figures show it sold 3 million handsets in overseas markets last year. It is expected to sell 6 million this year and more than 10 million in 2006.

In the Russian market, for example, the company is now selling around 60,000 to 70,000 handsets every month.

"Expansion overseas will help us maintain our leading role in the domestic market," he said.

"We will strive to maintain our number one position at home," he said, adding Bird is working towards achieving an annual growth rate of 20 percent.

Domestic handset makers encountered difficulties last year. Major manufacturers all saw dropping sales and profits, including Bird, TCL, Amoi and Konka.

Xu attributed the market hardships to the government's tight controls on banking loans early last year, strong competition from foreign handset makers as well as competition from smaller scale producers.

Xu admitted that Chinese handset manufacturers still lag behind foreign giants in many respects such as research and development and brand influence.

The incomplete industrial chain was another cause of the sluggish year.

"We have to purchase many handset components from overseas, such as integrated circuits, LCDs and chips," Xu said.

Analysts said they believe that cooperation with Siemens could be a way for Bird to regain its cutting edge, by enhancing the company's competitiveness.

But Xu refuted a rumor that Bird is going to purchase Siemens' mobile unit. Though the two companies are currently discussing furthering their co-operation, he said.

"We are aiming to set up a joint research institute to enable us to cooperate in the area of technology," he said.

Last June, Bird's collaboration with Siemens saw the partners cooperate bring two new handsets to the domestic market.

"We hope to work closer with Siemens," he said.

In another development, Xu expected more fierce domestic competition given the increasing number of players jostling for market share.

Sources close to the Ministry of Information Industry said the regulator is likely to loosen controls on handset manufacturing licenses.

It is reported that so far more than 20 enterprises have submitted applications.

"I am not afraid of more handset makers in the market. What concerns me more is the illegal small handset makers who are jeopardizing the entire market," he said.

As for the development of third generation (3G) wireless telecommunications, Bird is adopting an "active and cautious" attitude, Xu said.

"We are carefully watching the development of 3G phones and are working on it now," he said.

"But I don't think 3G phones will grab a large market share in the coming two to three years, partly because of the government's cautious attitude towards releasing 3G licenses," he added.

Analysts speculated that the Chinese Government is likely to roll out its 3G strategies in the second half of this year.

(China Daily January 11, 2005)