Communications firms beef up R&D in China
By Zi Mu (China Business Weekly)
Updated: 2004-06-03 09:03

Major global communications giants are stepping up their research and development (R&D) efforts in China in a bid to tap the booming local market.

Canada-based Nortel Networks on Monday started constructing a 55,000-square-metre campus in Beijing's Chaoyang District, under a memorandum of understanding on co-operation signed with the Beijing municipal government last year.

The campus will serve as Nortel's new China headquarters and as its R&D centre.

Nortel is committed to investing US$200 million between 2004 and 2006 to strengthen its R&D capabilities in China.

The first phase of the campus, which involves 27,000 square metres, is scheduled to be completed late this year.

US-based Motorola plans to merge its 19 R&D centres in China into a sole R&D firm, said company chairman and chief executive officer Ed Zander.

He made the remarks during the seventh Beijing International High-tech Expo, which concluded last week.

Motorola is expected to invest US$90 million in the new R&D firm, indicate media reports.

Motorola is committed to investing US$500 million between 2004-08 to strengthen its R&D capabilities in China.

Germany's Siemens, France's Alcatel and US-based Lucent have also announced plans to invest heavily in their R&D facilities in China.

Finland's Nokia, the world's top cellphone maker, on the sidelines of the high-tech expo, announced a series of measures to expand its R&D capabilities in China.

The firm plans to establish a new R&D facility to support CDMA technology and product development.

The new facility will "leverage Nokia's existing global CDMA competency to build a team of local talent specializing in the CDMA protocol," Nokia said.

It will also expand Nokia's global research network and create new platforms for technology transfer and local talent development, in addition to catering to the unique market and operator-specific needs in China.

The moves follow Nokia's recent foray into China's CDMA cellphone market.

The firm had been prohibited from entering the CDMA cellphone market because it did not have a licence to manufacture and/or sell CDMA-based mobile phones in China.

Nokia last June received approval from the Chinese Government to enter the segment, and then launched two CDMA models.

The CDMA push "has greatly contributed to Nokia's No 1 position in the Chinese mobile phone market," said Colin Giles, senior vice-president of Nokia's customer and market operations in China.

Nokia is not the No 1 CDMA cellphone vendor in China, said David Ho, president of Nokia (China) Investment Co Ltd.

Nokia's goal is to win a greater share of China's CDMA handset market. The firm is increasing its CDMA R&D capabilities in the country to support its strategic deployment, Ho said.

Nokia is the only mobile phone manufacturer in the world to use its own CDMA chipset across its entire product line.

All the other cellphone makers have to use the chipset provided by US-based Qualcomm.

Nokia's increasing presence in China's CDMA market is expected to help the firm obtain a 25-per-cent share of the global CDMA market.

The firm currently holds 35 per cent share of the global cellphone market.

Nokia also plans to expand the capabilities of its Beijing product creation centre, which was established in 1999.

Forty per cent of Nokia's global handsets will be designed and developed at the centre, company chairman and chief executive officer Jorma Ollila said during a news conference.

Nokia has received permission from China's Ministry of Personnel to operate a postdoctoral programme in the country.

The programme will provide educational and research opportunities to postdoctoral researchers to work on advanced telecommunications technology research projects at the Nokia Research Centre (NRC) in China.

Nokia also announced the establishment of the Chinese Developer Community through Forum Nokia as part of technology transfer to major Chinese Universities.

The firm said it has applied for 2,315 patents in China. Of those, 427 have been approved.

Nokia's existing R&D facilities in China have applied for 70 patents worldwide.

The firm is considering establishing a third-generation (3G) WCDMA manufacturing facility in China, Ho said.

The decision will be determined, in large part, by the timing of 3G licensing in the country, he said.

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