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Nokia Looks to Music to Increase Sales in China
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The world's largest mobile phone maker Nokia said it is betting on music phones in China this year to spur sales in the biggest mobile market by subscribers.


"The music space is one of our top priorities in the Chinese market this year," said David Tang, vice-president of sales at Nokia's customer and market operations in China. "We're ready to target customers with a complete line-up of music phones."


In keeping with the global trend, music phones are gaining popularity in China.


According to Beijing-based research house Analysys International, mobile phones with music players accounted for 6.5 percent of the total handset sales in China in the first quarter of 2005. But in the first quarter of last year, the figure climbed to 29.6 percent, and to 33.8 percent in the third quarter.


Citing statistics by retail data tracking firm GFK Asia, Tang said Nokia has already grabbed more than 25 percent - the largest share - of the Chinese market for mobile phones with MP3 music players, 10 percentage points ahead of its closest rival.


But Nokia is still facing increasing challenges in the music space. Apple Inc, maker of iPod music players, has launched its iconic iPhones. And Sony Ericsson's first-quarter profit more than doubled on the back of robust sales of high-end phones with Cybershot-branded digital cameras and Walkman-branded music players.


Sony Ericsson's average selling price (ASP) is 33 percent more than that of Nokia. A research by Analysys found that even Samsung's ASP of music phones is higher than Nokia's in China.


But Chris Leong, vice-president of marketing at Nokia China's customer and market operations, said the company is targeting the mass market instead of a niche.


"We don't believe music should be discriminative," said Leong. "We want to make it accessible to everybody. Nokia is not a niche player."


That means Nokia might introduce cheaper models with music players to target the lower-end market, which could boost the bottom lines of Nokia and China Mobile, the country's dominant cellular player that has given a big push to wireless music downloads.


Nokia sold 51 million mobile phones in China last year, an increase of 57 percent over the previous year. Its global handset sales grew 19 percent.


In the first quarter of 2007, the firm sold 17.5 million mobile phones in China, up 43 percent year-on-year.


Tang refused to disclose how many of those 17.5 million phones were enabled with music players but said music phones already account for 50 percent of the total market in China.


Globally, Nokia last year sold about 70 million music phones and is now the largest vendor of music players in the world.


(China Daily May 22, 2007)


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