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Smartphone Manufacturers Crowding into 3G Market

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White collar worker Qiu Xueying recently wanted to buy a new smartphone to replace the Nokia handset that she bought five years ago.

But after Qiu, 26, went through the major handset markets in Beijing and searched all the available products via the Internet, she was even more confused.

"Maybe I am not a tech fan, but I was a little puzzled by the new brands such as iPhone, OPhone, GPhone, UPhone and Window Phone that recently popped up," she said.

"I think I will postpone the purchase until I can figure out what these 'phones' are really about."

Since the Chinese government approved third generation (3G) licenses at the beginning of this year, companies -- including telecom operators, handset makers and Internet companies -- are accelerating efforts to introduce new products and services in China.

Branded handsets

Major companies are introducing their own branded handsets to better position themselves in China's smartphone market, where wireless services, rather than hardware have been of great importance.

"From a China perspective, it's a good time to be in this business," said Benjamin Tan, senior director of mobile business in China for Microsoft Corp.

"With the launch of the 3G network, I believe that smartphones will become more important and relevant than ever before," Tan said.

Microsoft in October introduced its "Windows Phone" for handsets that uses its Windows Mobile operating system.

The company hopes the new branding strategy will copy the success of Microsoft's PC market branding in the mobile phone industry.

According to research firm Gartner Inc, worldwide sales of smartphones running the Windows Mobile-operating system declined 20 percent in the third quarter, while total smartphone sales increased 13 percent.

But Tan said that during Microsoft's last fiscal year, which ended in June, sales of Windows Mobile handsets in China grew at a faster pace than in the average market.

"This is a very important market for us," he said.

In fact, Tan is not the only person who is optimistic about its products.

Chang Xiaobing, chairman of China Unicom, which introduced the Apple Inc iPhone in China in October after years of negotiation, said earlier this month that he expects the iPhone to become the best-selling smartphone in all of China.

"We're very confident about the market position of the iPhone," Chang said.

According to research firm Canalys, Apple's iPhone controlled 17.8 percent of the worldwide smartphone market in the third quarter of this year. China Unicom expects iPhone to attract more than 10 percent of China's 3G users in the next two to three years.

Bill Huang, general manager of China Mobile's research division, said last month that the firm sees smartphone sales growing in "double digits" in coming years - at least two-to-three times faster than other phone sales.

China Mobile announced plans in September to sell 3G smartphones using a lower-cost cell phone platform called OPhone, based on Google's Android system and developed by California-based Marvell Technology.

(China Daily December 14, 2009)