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Round-up Report
June 2004
Siemens sets up Nanjing branch(June 28, 2004)
Siemens recently announced the establishment of Siemens Power Automation Ltd. in Nanjing, Jiangsu province to provide products, systems and power automation solutions to China’s power industry.
"Power Automation is one of the most successful divisions of the Siemens PTD Group," said Juergen Keese, the Vice President of Siemens Ltd., China (SLC), and General Manager of SLC Power Transmission and Distribution Group, "the establishment of SPA brings Siemens closer to its Chinese customers.".
At present, Siemens has already established an extensive manufacturing and engineering base through over 45 operations in China.
Google teams with Baidu in China’s search engine market(June 28, 2004)
Google teamed with Baidu.com, a Chinese internet search engine company by investing in the Chinese company to explore business opportunities in China. Robin Li, president of Baidu, said he and his partner Eric Xu remained the biggest shareholders in Baidu.
This win-win approach should be a boost to both Baidu’s IPO on the Nasdaq stock market and Google’s launch of its anticipated IPO this year.
Last November, Yahoo acquired Hong Kong-based 3721 Network Software Co Ltd, for US$120 million. Experts expect that the search engine market in China will grow 68% year on year to US$101 million in 2004.
MII ranks China’s top 100 software companies(June 28, 2004)
The MII recently released the latest rank of China’s top 100 software companies, among which Huawei Technology (Shenzhen, Guangdong), Zhongxin Telecom (Shenzhen, Guangdong) and Hisense Group (Qingdao, Shandong) were listed as the top three, according to Xinhua reports.
This rank was based on each company’s software product sales, system integration and software service.
The MII expects that China’s software market demand will grow 28.6% year on year to US$25.4 bn in 2004.
AMD wins chip deal with Lenovo(June 14, 2004)
Advanced Micro Devices (AMD) recently signed a deal to sell its Athlon 64 and Athlon XP processors to Lenovo, China’s leading PC maker.
AMD has been playing a very active role in China’s chip market in 2004. In March of this year, AMD established a strategic alliance with Beijing-based Founder Group, China’s No. 2 PC maker, with an agreement that Founder would use AMD’s 64-bit microprocessors, and in April, HP launched a new line of desktop computers in China using AMD’s Athlon 64-bit microprocessors.
Lenovo, formerly known as Legend, is the No. 1 PC maker in China with 24% domestic market share. The company previously bought chips exclusively from AMD’s rival, Intel. This recent deal accentuates AMD’s progress in China’s chip market.
MII forecasts 350 Mn China mobile users in 2005(June 14, 2004)
The MII recently forecast that China’s domestic cell phone market would reach 350 million subscribers by the end of 2005. Already the world’s largest cellular market with 295.75 million users reported at the end of April, the forecast projects China will add an additional 55 million users over the next 20 months. The MII also predicted that one in four Chinese, or 24.5% of the population, would have a cell phone by the end of 2004 compared with April’s penetration rate of 20.8%. Mobile phone users exceeded fixed line users in China last fall and the trend looks set to continue according to the report.
In a separate study, the Taiwan-based Industrial Economics & Knowledge Center (IEK) announced that handset sales in China will grow to 85 million units by the end of 2004, up from about 74 million in 2003. IEK further predicted that the production value of these phones would reach US$16.4Bn in 2004 according to a report in Digitimes.
Intel installs WiMAX in China(June 14, 2004)
Intel recently announced that it has signed agreements with the municipal governments in Dalian and Chengdu to develop wireless networks for these two cities. According to the agreements, Intel will use WiMax (also known as 802.16a) and its derivatives to provide broadband access with a range of about 30 miles and a speed of up to 70 megabits per second.
"Digital technology, the expansion of wireless networking and the convergence of computing and communications will continue to enhance the way business is transacted, allow access to new markets and boost commerce globally," John Antone, Intel vice president and general manager of sales and marketing for Asia Pacific, said in a statement.
As a wireless technology, 802.16a is considered the next step beyond Wi-Fi, because it is optimized for broadband operation, fixed and mobile, in the wide area network. Some experts also view WiMAX as a migration path to 4G, but others believe that it is more likely to be used by holders of the Broadband Wireless Access (BWA) spectrum rather than mobile carriers.
Chinese government frees 3G decision to operators(June 6, 2004)
China will gradually release policies on giving 3G operating licenses by observing other nations’ practical experiences and following the market rules and practical need of the industry. In a recent interview, Xudong Wang, minister of the ministry of information industry, said that Chinese government, enterprises and research institutes have been actively in developing 3G technologies and cooperation with international counterparts in technology development. He acknowledged, China has made marked progress in 3G technologies by strengthening R&D and tracing the international trend.
In recent years, China has carried out 3G technology experiments, which provided technological evidence for outlining 3G development strategies and industrial policies, he added. China will continue organizing concerned experiments this year. China will also draw on the world practices to let telecom operators select 3G standards by themselves within the standards regulated by the country.
When talking about the telecommunication charge, the minister said more and more people in China enjoyed the real benefits of the declined telecommunication charges which was a result from the reform in the information industry. He stressed that China will make efforts to create a sound market-oriented system in the industry to allow users get real benefits.
China electronics industry posts $60 billion sales in Q1(June 6, 2004)
China reached $60 billion sales revenue at electronics product sales in both home market and export market in Q1 2004, 44% YoY growth, according to MII’s operations department. To breakdown the data, the industry’s total value-add was $12.9 billion, up 44.1% YoY and the total export was $41 billion, up 59% YoY.
Computer is the real driver of such growth. 9.27 million personal computers were produced during this period, up 46.7% over the same period of last year. Further more, 3.87 million laptop computers were shipped, showing an increase of 64% YoY.
Communications products remained the major driver to the industry, contributing 28.6% of total profit and 21.6% of taxation in the first quarter.
China Railcom to invest $1.1 billion infrastructure networking(June 6, 2004)
China Railcom, a new telecom carrier spin-off of Chinese Railway Ministry, will invest $1.1 billion in 2004 to improve network building of the company. Of the total investment, $730 million will go to new infrastructure equipment and $370 million will be used to improve current networks.
China Railcom, formerly affiliated to the Chinese Railway Ministry, was handed over to the State Property Commission on January of this year and renamed as "China Railcom Group Co., Ltd." since then. Last year, China Railcom realized $863 million revenue, an increase of 41% from the previous year. The company targets $1.2 billion revenue in 2004 through developing 10 million new fixed-line telephone subscribers and 700 thousands broadband users. Data and corporate users are primarily revenue drivers because fix-line has become commodity service.
To survive, China Railcom will develop new businesses at voice, intelligence networks, data and IP. The company has created a scheme to draw more clients in 2004 in which teleconference and voice messaging are considered as critical components for the company to win more clients.
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