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Legend to start making mobile handsets
( 2002-02-28 15:24 ) (7 )

China's largest computer maker Legend Holdings plans to start selling mobile phones using technology from US-based Texas Instruments Inc., the Beijing-based company said.

The handsets, which will be mostly high-end to middle-end, will begin being rolled out in June at a joint venture formed between Legend and Xiamen Overseas Chinese Electronic Co., or Xoceco, Legend said.

"We believe we can quickly penetrate into this high growth mobile handset market in China," Yang Yuanqing, Legend's president, said late Wednesday.

China is the world's largest cellphone market, with 144.8 million users at the end of last year, ahead of the number of users in the United States.

Demand in mobile handsets is expected to grow by 30 percent annually over the next three years, making local companies like Legend eager to exploit the market.

"There is a lot of room for the mobile handset market to grow in China and for companies to make profit from it," Yang said.

"As the mobile technologies become more mature, local brands are going to dominate the market," he said.

So far, foreign brands such as Nokia of Finland, Ericsson of Sweden and US-based Motorola have dominated the market for handsets in China, although local brands have recently started gaining ground.

Legend said it had reached an agreement with Texas Instruments allowing it to use various technologies developed by the Dallas-based company, including wireless chipsets.

Meanwhile, Legend and Xoceco will form a joint venture, with a total investment of 150 million (US$18 million), which will engage in the research, manufacture and sale of the handsets, the computer maker said.

Legend will pay 90 million yuan (US$10.8 million) for a 60-percent stake in the venture, while Xoceco will hold the rest, providing handset production lines, research facilities and other input.

"Xoceco and Legend share similarities in corporate culture and have mutual understanding about business development direction," Yang said.

"Even more, Xoceco has enjoyed tremendous support from the Xiamen Municipal Government for years."

Xoceco also said it expected advantages from cooperating with Legend.

"(This allows) us to leverage (Legend's) advantages on branding, management, product development, sales and distribution capability and existing customer base," said Guo Zeli, general manager of Xoceco.