China is already the world's biggest market for cellphone sales, and Nokia predicts China will become the company's largest market within the next three years. Nokia's sales in China rose sharply to $3.6 billion in 2004, a 44% increase from the previous year, boosting its share of China's mobile phone market to nearly 20%, according to Dave Carini, an analyst at Norson Telecom Consulting in Beijing.
Nokia's main rival, Motorola, has grown its share slightly over the past year to about 15% by focusing on new phones with 3G extras, like the Razr, that appeal to sophisticated young adults. Samsung trails in third place with a 10% share. Globally, Nokia leads with a 30.7% share of fourth-quarter sales of handsets last year, followed by Motorola at 15.4% and Samsung at 12.6%, according to Gartner research.
Nokia faces competition in the market from Chinese manufacturers such as Ningbo Bird and TCL Mobile Communication. Local brands reached a high of 50% market share in 2003 because their models are cheaper, have better Chinese-language software and were faster to market. Its advertising is handled by WPP Group's Bates Asia.
Multinational marketers have fought back with features like built-in cameras, radios, games and even Chinese-English dictionaries. Their phones still cost more, but urban consumers are willing to pay for high-tech extras. The market share for local brands now hovers around 40%.