When Dai Maoyu had to make a choice between staying in the ivory tower of academic study or entering the business world 11 years ago, he sellected the latter.

The choice proved the right decision for the executive vice-president of China's largest mobile phone maker.

Now, Dai is faced with another crucial decision, one that may change not only his own future but also that of his company.

During the past decade, Ningbo Bird Mobile Communications Co Ltd has grown to become China's top handset maker with a market share of 15 per cent, overtaking international giants Motorola and Nokia, according to statistics collected by the Ministry of the Information Industry.

Bird's not-so-secret weapon was the same one many other Chinese companies use - low prices.

The Ningbo, Zhejiang Province-based phone maker possesses two strengths: a manufacturing capacity of 10 million units a year and a sales force of more than 5,000.

While the first strength enabled Bird to cut its manufacturing costs and the prices of its products to a great degree, the latter allowed Bird to cover nearly every corner of the country, winning over price-conscious consumers and beating multinational enterprises to the punch.

However, as competition from both domestic and foreign rivals intensifies, Bird must find a new way to maintain its lofty position.

Dai Maoyu, who holds a master's in management and was an associate professor of economics, seems the ideal person to lead Bird forward.

His prescription involves moving up into the high-end segments of the market.

"It is a natural move and the time is right for us to do it."

Dai, former head of Bird's research academy, turned the company's attention to developing Bird's core technology.

In August, the company unveiled the DoEasy E868 mobile phone, marking the culmination of Bird's technological achievement.

While most makers of intelligent handsets use either the Symbian operating system (OS) initiated by Nokia, Motorola, Palm OS by US firm Palm Inc, or software giant Microsoft's SmartPhone OS, Bird chose to create its own system.

"With that move, Chinese mobile phone makers broke the monopoly of foreign businesses in core technology, hailing their entry to the high-end market," said Wang Bingke, an official overseeing the mobile phone industry with the Ministry of the Information Industry.

According to Dai Maoyu, more than 80 per cent of the components used in the ground-breaking phone were made by Bird.

The DoEasy E868 mainly targeted the business market. Bird will release more such phones throughout the rest of the year, Dai added.

The product, the first intelligent mobile phone with an operating system developed by Bird, includes functions such as wireless stock trading, a multimedia messaging service and a global positioning system.

While the average price for Bird phones in the first half of the year was about 877 yuan (US$106), the DoEasy sells for 4,400 yuan (US$532).

In addition to the high-end business market, Dai has also begun to pay more attention to women.

"Women phone users constitute a big market, but we must know what they want and that's what we're aiming to find out in developing the Bird Woman Star F1 series," said Dai.

The Woman Star F1 series, priced at about 2,000 yuan (US$240) on its release in June, is designed to appeal to women users with its trendy red handset and fashionable functions, including high-fidelity polyphonic ringtones.

On the same day the first Bird Woman Star F1 Star phone was made available to the public, Dai signed Bird up to sponsor the Overseas Entertainment News show made by Enlight TV Production Co Ltd, one of the most popular entertainment programmes in China.

"Many female phone users are fans of big international stars and this sponsorship will help us establish a fashionable image," said Dai.

While wooing the high-end market in pursuit of high profit margins, Dai, also president of Bird Sales Co Ltd, has set out to tap the overseas market.

The company established a subsidiary in Hong Kong in charge of international sales in the first half of the year.

At the same time, Bird also opened offices in Russia and Malaysia to develop markets there.

The company also announced in August its intention to enter the Indian market, where the mobile communication penetration rate is only 1.6 per cent.

Bird aims to sell about 300,000 phones this year and expects to triple that in 2004.

"After so many years of development, we have matured in terms of both technology and manufacturing, so going overseas is the next logical step," Dai said.

Although Bird held onto the top spot as China's largest mobile phone maker in the first six months of 2003, Dai believes the rest of the year will be filled with challenges from the competition.

"Many players suffered during the severe acute respiratory syndrome epidemic from April to June, so they must launch aggressive campaigns in the second half to make up the losses."

The Bird executive pointed out that the recent National Day holiday and the coming New Year's day were critical in gaining points before the Lunar New Year.

According to Dai, his company sold 500,000 cellphones over the seven-day National Day break, compared with average daily sales of 30,000 units.

"Of course, we want to expand our market share, but first of all we should consolidate our achievements in the first half," Dai said when asked if he sought to acquire an even higher market share by year's end.

"I hope we will sell a little more than we did in the first six months."

Dai revealed that his company shipped out a total of six million units from January to June.

As to competition with foreign phone makers, Dai Maoyu cited what happened in the colour television set market and said a similar situation could happen in the mobile market.

In the TV price wars, the number of TV makers was cut from 200 in 1996 to 34, while foreign brands were squeezed out of the top five. Five domestic companies now share more than 80 per cent of the pie.

"I believe most of the remaining 34 brands will disappear in two years and only six to eight brands can survive."

By that time, domestic makers will possess 70 per cent of the total market in terms of shipments, up from 58 per cent for the first six months, Dai added.

As for the cellphone industry, whatever comes next, Bird seems likely to continue flying high.

Close

Today's Top News		Top Business News
+Wu continues Korean visit, eyes on nuclear progress ( 2003-10-30) +Balance between consistency, adaptability ( 2003-10-30) +Cao, Rumsfeld discuss security issues ( 2003-10-30) +Chen pursues 'dangerous' line ( 2003-10-30) +Clean energy to warm, light up Beijing ( 2003-10-30)		+Room for reform in new securities law ( 2003-10-30) +Early bird catches worm ( 2003-10-30) +Capital boost vital for mainland insurers ( 2003-10-30) +China to be active to reduce US trade deficit ( 2003-10-30) +Farmers' income rises 6.5% in Q3 ( 2003-10-30)