Siemens targets Ericsson's No 3 spot in Asia

CHINA (SCMP.com) - The company is spending US$1.5 billion on marketing, research and development (R&D) and new production facilities this year.

Vice-president of product marketing Felix Yeo said Siemens was aiming to achieve 150 per cent growth in Asian unit shipments next year and seize from Swedish rival Ericsson the position as the region's No 3 phone vendor.

The firm also hoped to take Motorola's second position, behind Finland's Nokia, he said.

"For Asia-Pacific, we are looking at 150 per cent growth in 2001," said Mr Yeo, adding Siemens aimed to capture at least 15 per cent of the region's market.

The company now claims an 8 per cent market share, with 3.8 million mobile phones sold.

Mr Yeo said production capacity at Siemens' Chinese manufacturing centre would be increased to 10 million handsets, almost all of which will be for Asia. But he did not reveal the company's revenue targets.

Crucial to Siemens' Asian ambitions is its latest handset, the SL45, to be introduced later this month. The GSM phone, the company's first tri-band model, comes with PC synchronisation, built-in MP3 player and digital recorder that can store up to five hours of mono audio data on a removable 32MB Flash memory card.

It also can be synchronised with Microsoft Outlook, and its battery offers up to 360 minutes of talk time and 260 hours of standby.

"If you want to build a successful brand, you have to have a flagship product. Without a flagship product, you cannot become another Nokia," Mr Yeo said. "Now we have the SL45, we can start building our brand."

Siemens previously sold its European handsets in Asia, but Mr Yeo said the firm would now develop models for individual markets.

"The mobile-phone industry is moving so fast there are so many frontiers," he said. "We need different phones to address different markets.

"This phone [the SL45] must sell well in Hong Kong, Taiwan, Singapore, the Philippines and Thailand where they're looking for trendy and low-cost phones."

Mr Yeo said Siemens was investing heavily in marketing in Asia, primarily targeting its youth.

"The Asia-Pacific consumer requirements are different from Europe," he said. "In China, more than half of the population is below 23 years old. In the Philippines, 65 per cent of the population is below 30 years old. So in Asia we are looking at more trendy, fashionable types."

The new phones will be developed at Siemens' R&D centres in China.

"The R&D centres in Beijing and Shanghai will help enhance our products to suit the Asia-Pacific requirements as well as develop our 3G standard for China," Mr Yeo said.

Siemens is developing the new 3G standard, the TD-SCDMA (Time Division Synchronous Code Division Multiple Access) standard, with China's Academy for Telecommunications Technology.

The company had spent the past year building relationships with Asian carriers, electronics firms and content providers, Mr Yeo said.

"In the past 12 months, we've made a lot of alliances with our business partners in different markets and different fields," he said. "We're working with major operators in the region and other content providers, so that we are not only selling our hardware, but also mobile devices with solutions to help them gain margin and services."

Siemens also is putting its efforts into developing the KJava programming language and intends to launch a KJava developers program early next year.

"We're working with operators and major content providers so that when we launch KJava next year, everyone in the region will benefit," Mr Yeo said.

"The operators will gain their revenues via the server because you need to download the KJava application over the air. And the content providers will help us develop interesting applications to benefit the end-user."

Other plans for the coming year included colour display and increased battery capacity, which will be needed for the new breed of interactive applications accompanying the arrival of 3G.