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Helsinki/Beijing (pte045/23.02.2005/16:00) - Finnish mobile phone giant Nokia http://www.nokia.com has announced that China will become the company's single most important market in three years, driven largely by expanding demand for handsets in rural areas as well as phone upgrades by urban residents. As the company reports in a press release on its website, since the outset, Nokia has grown its presence in China from an original staff of five in 1985 to more than 4,700 employees, working predominantly in global manufacturing and R&D. China currently accounts for 10 per cent of the company's global revenues, behind the US, which accounts for around 13 per cent of Nokia sales.
According to Jorma Ollila, chairman and CEO of Nokia, in 2004, Nokia not only retained, but clearly extended its position as the number one player in the mobile phone market. In Ollila's eyes, this is due to the strong Nokia brand in China, the company's leading technology and quality products, as well as the recent hard work done in driving the efficiency and reach of the company's distribution system, particularly in more rural areas. "It was also an excellent year for exports. We were again ranked the largest telecom exporter in China, a position held since 2000, with our export sales growing 56 per cent year on year in 2004 to reach a record 3.3 billion dollars.
As the world leading mobile phone maker's second largest market, China 2004 net sales rose sharply to 3.6 billion dollars, representing growth of 44 per cent on the previous year. China also plays a major part in Nokia's global manufacturing base as a logistics hub and in its global R&B network. During 2005, in meeting growing market demand, Nokia plans to add further capacity to its manufacturing facilities in China, as well as expand its activities in R&D. Mobile subscriber growth in China is expected to almost double over the next five years, driven by a strong replacement market in urban areas and more and more users in rural China gaining access to mobile communications. According to Nokia, the total global mobile subscriber base, which hit 1.7 billion at the end of last year, will reach three billion by 2010. Of these new subscriptions, almost a quarter are expected to be in China.
"We target strengthening our market share in China again this year, with growth largely on the strength of ongoing expansion into non-urban areas and our ability to keep coming up with the quality, tailored high-tech products that our Chinese customers want," said Ollila. "The expected roll-out of 3G networks and related services also represent an opportunity to improve our position in the Chinese market. During the next three years, I would not be surprised to see China become Nokia's largest market in net sales terms," he added.
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