Finnish telecom giant Nokia yesterday said its net sales in China, including Hong Kong and Taiwan, surged by 29 percent to 3.85 billion euros (US$4.6 billion) last year.

 

This revenue growth has turned China into Nokia's largest single market, said David Ho, president of Nokia (China) Investment Co Ltd.

 

China last year contributed 11 percent of the annual global sales of Nokia, the world's largest mobile phone maker and a major mobile telecom equipment maker.

 

Nokia's strong performance in China has largely helped spur its global growth, Ho said.

 

Its global net sales in 2005 grew 16 percent, the best growth rate since 2000.

 

Nokia's exports from China grew by 15 percent to reach 2.87 billion euros (US$3.43 billion) last year.

 

The firm sold 32.5 million mobile phones in China last year, up 72 percent year-on-year.

 

Ho said the firm was the "undisputed leader" with more than 30 percent market share.

 

Colin Giles, senior vice-president in charge of Nokia's customer and marketing operations in Greater China, said the past year was a banner year for Nokia because the firm made good profits in a mature market.

 

"It is a very competitive market with more than 1,000 mobile phone models being sold," said Giles.

 

Nokia's robust sales come, in a large part, at the expense of local vendors.

 

Due to the deregulation of the mobile phone market and intensifying competition, most domestic makers, which lack core technology, are having a tough time.

 

In 2005, more than 20 new players were awarded licences by regulators to make and sell mobile phones in China.

 

But in the past few months some small Chinese mobile phone makers have been closed.

 

And some of the bigger local manufacturers, such as TCL, are having to bear financial losses.

 

Many Chinese consumers, especially young people, want international products from companies such as Nokia, said Giles.

 

According to Norson Telecom Consulting, the six best-selling GSM mobile phone models in the third quarter of 2005 in China were all made by Nokia.

 

And Giles said two out of the three best-selling CDMA mobile phone models last year were Nokia's.

 

Fancy mobile phones with digital cameras and music players will continue to spur growth in the Chinese market, he said.

 

"Replacement mobile phone sales will represent 60 percent of the total market this year," he said.

 

Nokia last year launched more than 30 mobile phone models in China, half of which have built-in MP3 music players.

 

The rural market, where consumers are buying mobile phones for the first time, is also providing Nokia with opportunities, said Giles.

 

Nokia will this year try to push into the enterprise sector by aggressively promoting its high-end models to corporate users, the vice-president said.

 

"The enterprise sector remains an untapped area in China," he said.

 

Mobile phones that offer faster e-mail and Internet access are not yet as popular in China as in Western countries.

 

(China Daily February 10, 2006)