Motorola eyes quarter of China handset market

SHANGHAI, July 13: Motorola Inc., the world's number-two cellphone maker, is aiming to take a quarter of the China handset market in the near term as it hones a newly built national retail network, an executive said on Thursday.

The U.S. company now has about 30,000 retailers selling its handsets in China, triple the number it had just 18 months ago, Michael Tatelman, general manager for Motorola's mobile devices division for North Asia, said in an interview.

Its current share of the market -- where some 100 million cellphones are sold each year -- has grown rapidly over that period as it built the network, from just 11 percent at the beginning of 2005 to 21 percent in May, according to industry data.

''Based on what we have on the ground today, we ought to be able to achieve 25 percent share in China in the not-too-distant future,'' Tatelman told Reuters, as the company opened a flagship store in Shanghai, its first in China.

He said the company has recently opened 50 Motorola branded stores in China as part of a new retail strategy, which also includes plans to open three more flagship stores -- one in Beijing, one in Chengdu and one in Guangzhou -- by year-end.

The flagship stores aim to be model showcases that feature a full range of the company's wireless products and highlight product demonstrations for customers.

''In China we will have less than 10 (flagship stores) by the end of next year,'' he said. ''As far as Motorola branded shops, we'll be looking for critical mass in the 300 range.'' The push to open a network of own-brand stores is part of a broader global strategy that Motorola is rolling out to other markets following its introduction in China, the world's largest mobile market with more than 300 million subscribers.

The company is introducing similar stores in markets like Cambodia, Russia and Indonesia.

But some markets, most notably the United States, are less suitable for such stores since most phones are sold there via cellular carriers, said Jeremy Dale, a Motorola vice president of retail and marketing.

''There are places in Europe closer to the China model and places closer to the North American model,'' Dale told Reuters in a phone interview in North America. ''In retail-led markets -- and China is probably the world's biggest -- we're rolling out Motorola branded stores to give us a presence.'' Similarly, Nokia, Motorola's chief global rival and the world's top cellphone seller, has plans to open 18 stores around the world in the next two years, including four flagship stores in the United States.

The Finnish company said in June it would open its first U.S. retail store in Chicago, not far from Motorola's headquarters, in a bid to improve its brand awareness.

Nokia remains the largest mobile phone maker in China, with a 28.4 percent share in April, according to data tracking firm Sino-MR.

The two global giants now control about half of the China market, following an aggressive campaign to take back share from a field of homegrown rivals like Ningbo Bird and TCL Communication, which had made major gains but have struggled to stay in the hunt in the last year and a half.

REUTERS