Motorola eyes research, 3G market

Cellphone maker Motorola Inc yesterday said it will continue to increase its research and development (R&D) investment in China.

Kao Ruey-bin, president of Motorola's business in China, said Motorola has invested $1 billion in R&D in China and will continue to increase its investment in product innovation and technology upgrades.

"Our R&D centers in China are an important part of our global R&D system, and this strategy won't change," Kao said at the sidelines of the Asia Society's corporate conference in Tianjin.

He also said Motorola is ready to embrace China's market for third-generation (3G) telephony.

"Many of our 3G products sold on the global market were actually produced in our Chinese factories and we have done a lot of work, both in terms of R&D and production capacity, to prepare for China's upcoming 3G market," Gao said.

He said the country's ongoing telecom restructuring and the following 3G licensing will benefit consumers and the entire sector.

China launched its long-awaited telecom restructuring last week, in which the country's six telecom operators will be merged to form three large groups.

The Chinese government said last Saturday that the country will issue three 3G licenses "as soon as the restructuring finishes", leading to billions of dollars in new orders for foreign equipment suppliers and cellphone venders.

Kao said Motorola has yet to make contacts with China Telecom or China Unicom about the 3G networks that the two carriers will build after the restructuring. But he said the company could provide a wide range of products based on different standards.

Motorola has made a total investment of $3.8 billion since it first entered the Chinese market in 1987. The company now has over 10,000 employees in China, with R&D staff surpassing 3,000.

But the company has long been struggling to find a successor to its popular Moto Razr.

Shen Zixin, analyst from domestic research firm PDAY research, said China's ongoing telecom restructuring may not necessarily benefit Motorola's business performance in the country.

"Traditionally Motorola has its advantages in CDMA network facilities," he said. "But the CDMA network will be taken by China Telecom, whose traditional supplier is Huawei Technology."

He said Motorola will face a fiercer competition in China after the restructuring and may continue its cooperation with China Unicom to provide tailor-made handset.

According to research firm Gartner, Motorola's cellphone shipments in the global market declined 37 percent to 29.8 million units in the first quarter of this year.

(China Daily 05/30/2008 page21)