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TCL Targets 20 Million Mobile Handsets

2004/11/15

TCL Corporation, China's electronics giant, expects to increase production to 20 million mobile handsets this year, including output from a venture with Alcatel, a French telecom gear maker, TCL reported on October 30.

TCL Chairman Li Dongsheng said the firm made about 10 million handsets last year, but production will increase because of the deal with Alcatel and expected increases in demand from international markets.

"We expect our production to reach 20 million units and hope it will reach 50 million units in the long term," Li told reporters on the sidelines of a ceremony marking the establishment of the Sino-French venture.

TCL Communication Technology Holdings, the mobile phone-making unit of TCL, will take an initial 55 percent stake in the joint venture created earlier this year. TCL, which lists shares in Shenzhen, will contribute 55 million euros (US$67.7 million) to the venture.

Alcatel will have 45 percent share after contributing 45 million euros (US$55.3 million), including its mobile handset business in China.

The venture paves the way for Alcatel's eventual withdrawal from the money-losing handset business, while it marks another step by TCL toward its goal of becoming a global player by giving it access to Alcatel's technology and to markets in Latin America, Africa and Europe.

Huizhou, Guangdong-based TCL, is one of several home-grown firms, including appliance producer and mobile-phone maker Ningbo Bird, that have global ambitions.

TCL controls about 12 percent of the Chinese handset market - the world's largest. With the deal, it gets access to GSM-standard wireless technology, the world's dominant system, without having to sacrifice margins by buying it.

TCL has been steadily gaining market share from foreign rivals such as Motorola, Nokia and Siemens AG.



 
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