US mobile communications giant Motorola has invested in three Chinese companies as a strategic move to penetrate into the mobile value-added services sector. This area is thought to be critical for the coming third generation mobile communications (3G) sector.

The US giant said yesterday that its venture capital arm, Motorola Ventures, increased its investment in Shanghai NewMargin Venture Capital Enterprise, a leading investment firm, to become one of its biggest investors.

Motorola first invested in the Shanghai business in 2003. NewMargin originally had a fund of US$35 million from various investors and has invested in several firms, including NASDAQ-listed Chinese telecom solution provider AsiaInfo.

Motorola also announced it would inject capital into two mobile value-added firms: Shenzhen-based Shenxun Information Technology Development Co Ltd and Legend Silicon Tech Co Ltd.

However, Edward Zander, chairman and CEO of the world's second-largest mobile phone maker, declined to reveal the amount of money the firm had spent.

To date, the US firm has invested in five Chinese businesses.

Investing in new high-tech firms has become a means for multinationals to get closer to trends in China and have a presence in emerging technologies.

Another US telecoms giant, Qualcomm, announced it would invest US$100 million in three technology companies, including NASDAQ-listed China Techfaith Wireless Communication Technology Ltd.

The world's No 1 microprocessor maker Intel said last year it had set up a venture fund of US$200 million for the Chinese market. It ranked eighth among all venture capital firms in China in terms of investment volume last year.

Huang Yong, president of the domestic research house CCID Consulting, said the interests of global giants in venture capital signified an important change of their strategies in China.

"Now they have everything in China: active sales teams, big local manufacturing capability, and increasing local development. Naturally, the next thing for them is to follow trends in the market and venture capital investment is a good way to do that," he said.

Shenxun is a firm that focuses on mobile applications, such as location-based service and enterprise solutions, while Legend Silicon designs and makes video chips for mobile TVs, which will be the next big thing in the 3G era, according to Motorola.