Sony Ericsson yesterday won two major mobile device orders in China, which could help boost the firm's market share in one of the world's most competitive handset markets.

Sony Ericsson, the world's fourth-largest handset maker, signed a framework agreement to sell 4 billion yuan worth of handsets to Shenzen Telling Communications Corp, a Chinese mobile phone distributor.

Under another deal, PTAC, the largest handset distributor in China, which controls more than 30 percent of the country's handset distribution network, will purchase 5 million handsets from Sony Ericsson.

A Sony Ericsson billboard in Shanghai. [China Daily]

About 60 percent of the 5 million handsets will be mid-range and low-end, with some models priced at roughly 400 yuan, Pan Zhen, vice-president of China National Postal and Telecommunications Appliances Corp, parent of PTAC, told China Daily.

The move marks Sony Ericsson's push into the entry-level handset market.

"To be one of the top three players (both in China and globally), we have to compete in this market," said Gunilla Nordstrom, president of Sony Ericsson China.

London-based Sony Ericsson, a joint venture between Sweden's Ericsson and Japan's Sony, has long been focusing on expensive handsets with high-quality music players and cameras, sub-branded by Walkman and Cybershot.

The strategy has helped the company manage strong profit margins compared to larger rivals Nokia and Motorola.

In the first quarter of this year Sony Ericsson launched 10 new handset models, four of which are entry-level handsets.

Nordstrom revealed that Sony Ericsson set up a research and development team in Beijing to focus on developing entry-level handset models.

"Part of the low-end mobile phones sold by Sony Ericsson will be developed in China," she said.

Emerging markets such as China, India, Russia and Brazil already provide large revenue streams for leading manufacturers such as Nokia and Motorola.

In China, which had 481 million mobile phone users as of March 2007, most newly added subscribers are from rural areas, where consumers are buying handsets for the first time.

Deals between distributors and retailers are crucial for handset manufacturers to expand their sales networks in China.

(China Daily 05/10/2007 page13)