Huawei attacks the European market

Huawei Technologies, the China telecommunications equipment maker, is to step up sales efforts in Europe in a move that will raise pressure on western rivals.

Zhou Ming Cheng, Huawei's European marketing director, told the Financial Times the group had achieved sales of $2bn (£1bn) in Europe in 2007, up from $770m in 2006.

Mr Zhou said Huawei aimed to lift European sales this year, implying it was seeking to raise market share at the expense of rivals Alcatel-Lucent, Ericsson and Nokia Siemens Networks.

Huawei's aggressive overseas drive is putting pressure on Alcatel-Lucent and Nokia Siemens, which reported losses last year, and Ericsson, which saw net income fall.

"I do believe that in the coming few years we are still growing very fast here," Mr Zhou said.

"The European market is one of the biggest in the world - very strategic to the company. So we put more investment in and we believe we will have a better and better position here."

He claimed that the 2006 merger between Alcatel and Lucent and the joint venture between Nokia and Siemens had given Huawei sales opportunities because fixed-line phone and mobile operators did not want to be dependent on a restricted range of equipment suppliers.

During the past two years, Huawei has been winning wireless infrastructure contracts with European mobile operators by edging out Alcatel-Lucent, Eric-sson and Nokia Siemens.

Vincent Rech, an analyst at Société Générale, pointed to contracts won by Huawei in 2007 with Vodafone in Greece, Romania and Spain; France Telecom in Belgium and France; and Telefónica in Germany. The contracts underline how Huawei is moving beyond China and other emerging markets.

But while it is enjoying growing success in Europe, Huawei has made limited progress in the US. Mr Zhou said sales of $100m were achieved in the US in 2007.

The 2007 annual report of Huawei, which is not a public company, said it generated revenue of $12.6bn and net income of $673.5m.

Mr Zhou played down suggestions by rivals that it was aggressive in its pricing of contracts so as to win orders.

He described Huawei as a private company and denied it received financial support from the Chinese government.

Nokia acquires Symbian

Espoo, Finland - Nokia today announced it has launched a cash offer to acquire all of the shares of Symbian Limited that Nokia does not already own, at a price of EUR 3.647 per share. The net cash outlay from Nokia to purchase the approximately 52% of Symbian Limited shares it does not already own will be approximately EUR 264 million.

Nokia has received irrevocable undertakings from Sony Ericsson Mobile Communications AB, Telefonaktiebolaget LM Ericsson (publ), Panasonic Mobile Communications Co. Ltd. and Siemens International Holding BV to accept the offer, representing approximately 91% of the Symbian shares subject to the offer. Nokia also expects Samsung Electronics Co. Ltd. to accept the offer.

The acquisition is a fundamental step in the establishment of the Symbian Foundation, announced today by Nokia, together with AT&T, LG Electronics, Motorola, NTT DOCOMO, Samsung, Sony Ericsson, STMicroelectronics, Texas Instruments and Vodafone.

"This is a significant milestone in our software strategy" said Olli-Pekka Kallasvuo, CEO of Nokia. "Symbian is already the leading open platform for mobile devices. Through this acquisition and the establishment of the Symbian Foundation, it will undisputedly be the most attractive platform for mobile innovation. This will drive the development of new and compelling, web-enabled applications to delight a new generation of consumers."

"The wide support for this initiative, uniting the industry around the Symbian platform, reflects the strong gravitational pull it has for application developers and other ecosystem players. We will drive efficient, open innovation by unifying the platform and simplifying the software supply chain, leveraging our experience from mobile devices. Nokia is strongly positioned to realize the benefits of open innovation, as well as accelerating time to market, enabling us to meet and exceed consumer expectations for leading converged devices and experiences", Kallasvuo continued.

Symbian Limited is the software company that develops and licenses Symbian OS, the market-leading open operating system for mobile devices. User interfaces designed for Symbian OS include S60 from Nokia, MOAP (S) for the 3G network and UIQ, designed by UIQ Technology, a joint venture between Motorola and Sony Ericsson. A privately-owned company established in 1998, Symbian has its headquarters in London, UK and other offices in the United Kingdom, United States and Asia (Bangalore, Beijing, Seoul and Tokyo).

"Ten years ago, Symbian was established by far sighted players to offer an advanced open operating system and software skills to the whole mobile industry", said Nigel Clifford, CEO of Symbian. "Our vision is to become the most widely used software platform on the planet and indeed today Symbian OS leads its market by any measure. Today's announcement is a bold new step to achieve that vision by embracing a complete and proven platform, offered in an open way, designed to stimulate innovation, which is at the heart of everything we do."

Mobile devices based on Symbian OS account for 60% of the converged mobile device segment (source: Canalys, 12 months to Q1 2008). Symbian OS represented approximately 7% of all mobile device sales in 2007, up from 5% in 2006 (source: Strategy Analytics). To date, more than 200 million Symbian OS based phones have been shipped, over 235 models, from 8 vendors and on more than 250 mobile networks around the world. More than 4 million developers are engaged in producing applications for Symbian devices.

Nokia expects the acquisition to be completed during the fourth quarter of 2008 and is subject to regulatory approval and customary closing conditions. On a reported basis, Nokia expects the transaction to be dilutive in 2009, approximately breakeven in 2010, and accretive in 2011. On a cash basis, Nokia expects the transaction to be dilutive in 2009 and accretive in 2010 and 2011. After the closing, all Symbian employees will become Nokia employees.

Source

Nokia produced 1 million mobile phones in Romania

Nokia announced today that it had produced the 1 millionth mobile phone at its new factory from Cluj, Romania. This comes after only three months since the factory started the production, as the plant opened its doors at the beginning of the year, in February.

For the moment, the Cluj factory makes Nokia cell phones for the European market and it mainly roles-out entry-level devices. The plant has around 700 employees, but when it reaches the full production capacity (at the end of 2009), it is estimated that no less than 3,500 people will work there.

Talking about the 1 million mark announced today, John Guerry, Director of the Cluj Factory, said: "This number represents a great success for us and it should be a pride for all those who sustained us since the debut of our operations in Cluj. The beginning of production in Romania was a fruitful one, and Nokia's clients from all over Europe are satisfied. We've managed to recruit dedicated and dynamic employees and I'm sure that, thanks to this wonderful team, the Cluj factory will become a model of performance when it comes to product quality."

The Cluj factory is the 11th one from all the factories that Nokia has around the world and its construction was first announced back in March 2007. The decision to build a facility in Romania was taken by the Finnish company mainly due to the low production costs found here. This led to the closing of Nokia's plant from Bochum, Germany, which should be completed in June.

Nokia invested until now more than 60 million USD into the Cluj factory, but the giant mobile manufacturer will surely recover the investment in a short time, once the facility reaches full production capacity and starts making more handsets.

Source SoftPedia

Nokia Siemens and Pirelli to co-develop femtocells

Nokia Siemens Networks (NSN) has signed a co-development deal with Pirelli Broadband. The agreement will see Pirelli's femto-enabled Multiplay equipment coupled with NSN's home access software with the aim being to allow operators to introduce femtocell-based services to home and small office environments.

The Pirelli Multiplay box offers broadband support for ADSL2+, VDSL2 and FTTH, together with the company's Epicentro middleware and applications platform. Pirelli said that its Epicentro software manages the co-existence of 3G handsets with Pirelli's access gateway, IPTV set top box and 3G femtocells.

Separately, ABI Research claimed that vendors attempting to ramp up the sales of 3G femtocells will only have limited early success with just 100,000 units being forecast to ship this year. Noting that more than 20 femtocell development trials are currently underway, ABI said development of the units is not likely to see shipment volumes until 2010, when shipments will likely total tens of millions. "By 2010, femtocell silicon solutions will have been optimised to the degree that US$100 price points for femtocell access points will be within reach, and OEMs' order books will have the volume to sustain critical wholesale price reductions," said Stuart Carlaw, ABI Research's VP and research director. "The turning point for this market will be late 2009."

More EETimes

Nokia Will Pay $314M to Close Bochum Plant

DUESSELDORF, Germany (AP) -- Nokia Corp. said Tuesday that it has agreed with worker representatives on a $314 million plan to soften the blow from its closure of a factory in Germany and the reopening at Jucu in Romania.

Nokia was heavily criticized by German unions and politicians when it announced in January that it planned to close the plant in Bochum in the industrial Ruhr region at a likely cost of 2,300 jobs.

Nokia will set up a "transfer company" to help affected staff for one year.

Gisela Aschenbach, the head of the employee council in Bochum, said that "additional payments will take into account the specific situation of families and severely disabled persons."

Nokia said the outcome was a "fair and responsible social plan."

"As we have clear responsibilities to our employees in this kind of difficult situation, it was our special concern from the start to compensate the loss of the jobs in a respectful and fair manner," executive vice president Veli Sundback said in a statement.

Nokia Chief Executive Olli-Pekka Kallasvuo has apologized for the decision to close the plant but has said it was necessary, given that the factory makes 6 percent of Nokia's handsets but accounts for 23 percent of its global labor costs.

The company has said labor costs in Bochum were nearly 10 times those at another plant in Romania -- a point that has particularly irked officials in the region, who argue that labor accounts for only a small proportion of overall costs.

The state government in North Rhine-Westphalia has demanded that Nokia return investment subsidies paid in the late 1990s, plus interest - a total of nearly $94 million.

It has claimed that Nokia has failed since 2002 to fulfill conditions under which the subsidies were granted, including creating a minimum number of permanent jobs.

Nokia has rejected the demand and the charge, saying it exceeded requirements.

Nokia in Romania

The good things

After testing the production line on 15 January, the 11th Nokia factory from Jucu started the production. Nokia invested 60 million euros at Jucu and with all his partners the total investment is about 200 million euros.

The Tetarom III Park has 154 hectares and Nokia and its suppliers use 90 hectares for Nokia Village.

Company officials said the Jucu factory now employs 350 people. The factory will have 3500 workers, but the authorities appreciate that will be necessary above 15000 people for all the companies.
Romanians working at Nokia will receive a salary package between 200 and 300 euro, as compared to a starting salary of about 1500 euro in Western countries.
Workers in the factory are contractually obliged not to reveal information about work at the company. However, conditions are very good since officials plan to built football and basketball fields for worker's free time.
Staff will begin by working one single shift, but switch to two from March. In fact, the shift system is one of the legislative hurdles that Nokia's management is faced with. The manager of the new plant recently asked the Labour Minister, Paul Pacuraru, to improve the legislation and reduce the number of shifts.

The Nokia production would target Middle Eastern and African markets mainly, Nokia officials say. Nokia Senior Vice President Juha Putkiranta said that Romanian workers at the Nokia plant receive an attractive salary package and hot meals, but refused to comment on other production details.
Putkiranta said that Nokia's factory in Romania will produce, among other models, Nokia 1200 destined for the Middle East and Africa. The Jucu factory will produce 5 handsets every second. Nokia officials argue that the Romanian factory will set up the necessary software on the models produced.
The first Romanian made handset is a Nokia 1200. This phone was used by Juha Putkiranta to call Tapio Saarela, the Finnish ambasador. The second and the third telephone were given to local authorities.

Future plans

The industrial park in Jucu, Romania where Nokia relocated its factory is about to extend. Along with the desire of other companies to invest in the area, Daimler Mercedes being just the last name added to the list, the terrain available in the Tetarom Industrial Park proves to be insufficient, even though the park already signed for some neighboring 1,000 hectares with a private partner. At least by some 170 hectares (420 acres) are still required, daily Ziua de Cluj reads.

Cluj county vice-president Kerekes Sandor declared for HotNews.ro that there are plenty of companies willing to invest at Jucu. However, he admitted that local authorities need to extend the industrial park before any plans can be made.

Even if the land surrounding the current industrial park pertains to the state, it is administered by the Agricultural Sciences University to perform agricultural research. Thus, University officials argue that they have no idea of the City Hall's plan.

German group Daimler will open a final assembly factory within the Tetarom III industrial park in the village of Jucu, Cluj county, Ziua de Cluj informs. The production facility will spread over some 170 - 200 hectares and will require a 400 million euro investment. The new factory will employ some 4000 people, the newspaper informs. Same Jucu is currently hosting the construction works of a future Nokia factory.

"Two other car producers expressed their interest for the terrain near the Nokia factory. It is a rough competition and the labor unions have their say. Some 350000 cars will be produced in the Jucu Industrial Park. The perspective is fantastic", sources in the business field say.

"As it was the case with Nokia, all discussions and negotiations have a confidentiality clause. I can not tell you anything about the negotiations with any of the investors", said the Cluj County Council president, Marius Nicoara.

Tetarom general manager Viorel Gavrea said that there are demands from major investors that may occupy a further 700 hectares area, but that the target is to obtain from the local council the 170 hectares the park still needs.

Kanji Tsushima, the Japan ambasador in Romania, said that he will recommend to Japanese companies like Toshiba and Hitachi to invest at Cluj.
BYD, the giant Chinese producer of batteries, and Hansaprint, the producer of Nokia's manuals and paper stuff, are willing to invest in Nokia Village.

Thousands of Romanians from Europe, USA and Canada are willing to come and work at Jucu. The Nokia Village has taken the Romanian's mind. Many teenagers are sending e-amils to apply for The Nokia scholarship.IT, Telecom and Mecanic Engineers showed their interest to work at Jucu. In the campuses, the students are talking about the new opportunities.

The local president of the Cartel Alfa Syndicate, Grigore Pop will found the Nokia syndicate at Jucu to protect the workers and prevent the Bochum situation. He adviced the authorities to take measures to keep Nokia for a long time.

The bad things

High prices

Even before the construction was launched, the prices started to grow from 2-3 euros to 30 euros and more for only 1 sqm. An appartement in Cluj-Napoca became more expansive than a Bucharest appartement.

Foreign workers

13 companies involved in the construction works at the site of the future Nokia plant in Jucu, near Cluj, Romania have received fines totalling over 58,500 Romanian Ron after local authorities ran checks in the area. The main irregularities identified were related to foreign citizens detached to work on the site, NewsIn informs. Some 161 foreign citizens from Slovakia, Germany and Poland working on Nokia's building site are not legally registered.

Bochum incident

"The planned closure of the Bochum production site is necessary to secure Nokia's long-term competitiveness," said Veli Sundbäck, Executive Vice President of Nokia and Chairman of the Supervisory Board of Nokia GmbH. "Due to market changes and increasing requirements for cost-effectiveness, production of mobile devices in Germany is no longer feasible for Nokia. It cannot be operated in a way that meets the requirements for global cost efficiency and for flexible capacity growth. Therefore we have to make this tough decision."

Due to Nokia's Bochum, Germany plant having a "lack of competitiveness," as many as 2300 manufacturing jobs will be lost as the world's largest wireless handset maker closes down shop there. Making electronic products in Germany is "no longer feasible" from an economic and cost efficiency perspective, said Veli Sundback of Nokia's supervisory board. The plant has been in operation since 1989.
Nokia will not refund the subsidies it received for the construction of its production facility in Bochum, Germany. The factory is about to be shut, Nokia deciding to outsource the production to Romania, Forbes informs.

According to company officials, there are no reasons to return the 41 million euro subsidies received a decade ago, since it invested more than the German officials demanded. Regional NRW Bank, the institution that contributed to the Nokia factory construction between 1998 and 1999, demanded the company to return the funds it received and to answer within a week.

Regional authorities of the German land Renania North-Westphalia argued that the refund claim is motivated by Nokia's fail to employ the promised 2860 people, having employed, in fact, between 200 and 400 people less, between 2002 and 2005.

Nordrhein-Westfalens minister for economic affairs Christa Thoben (CDU), accusedthe finnish mobile phone manufacturer of “subvention tricking” (”Subventions-Tricksereien”) and warned the company of a possible “massive image damage”.

Meanwhile, the record-breaking profits announced by the company in 2007 led to a massive discrediting of the company in Germany, many consumers announcing they will boycott the brand.

How long will stay Nokia in Romania?

John Guerry said that Nokia will stay for a long perios and Nokia Senior Vice President Juha Putkiranta refused to answer to this question.

Apple Takes Third of Global Mobile Market

In less than half a year, Apple, Inc. has become the world's number-three seller of smart mobile devices, as Apple's iPhone took off. But Apple's exclusive carrier arrangements for the iPhone show signs of strain with users unlocking Apple's iPhone. Analysts say Apple needs to work on its smartphone to catch up to the Blackberry and Nokia.
Apple bested Motorola to grab third place in global fourth-quarter sales of smart mobile devices, according to market researcher Canalys.
With 2.3 million iPhones sold in the quarter, Apple has a 6.5 percent global market share of smart devices, still substantially behind BlackBerry maker Research in Motion, with 4 million units sold and a 11.5 percent market share, and global leader Nokia with 18.8 million unit sales and a 53 percent market share. In the U.S., the iPhone accounted for 28 percent of the market, advancing on RIM with 41 percent and blowing past Palm with only 9 percent.
"When you consider that it launched part way through the year, with limited operator and country coverage, and essentially just one product, Apple has shown very clearly that it can make a difference and has sent a wake-up call to the market leaders," said Pete Cunningham, Canalys senior analyst.

iPhone vs Nokia

Meanwhile, Apple on Tuesday doubled the storage capacity of the iPhone to 16GB and the iPod Touch to 32GB. Apple originally offered 4GB and 8GB versions of the iPhone. The beefed-up devices come with software previewed at Macworld last month, which among other things allows them to identity the user's location.
Can Apple build on its success to seriously compete with Nokia for dominance of the smartphone space? To do so, it will have to expand its coverage and build out its product portfolio, Cunningham said. "A broad, continually refreshed portfolio is needed to retain and grow share in this dynamic market," he said.
Apple will be a strong contender for the crown over the next several years, said Tim Bajarin, principal analyst with Creative Strategies, in an e-mail. "While Nokia is a key player, Apple is clearly going down a path to challenge them and all the other players in the area of smartphones," he said.
In addition, the iPod Touch is "one of Apple's major strategic advantages over their competitors in the smartphone and MP3 music-player markets," Bajarin said. "I expect Apple to extend this multi-touch user interface to even more Apple-created products in the future."

Gray Market in Asia

Of concern is Apple's strategy of exclusive relationships with wirless carriers. "It will also need to ensure that the exclusive relationships that got it so far so quickly do not prove to be a limit on what it can achieve," Cunningham said.
Reports of a huge gap between iPhone sales and service subscriptions with AT&T, Apple's exclusive carrier in the U.S., have raised concerns that consumers are revolting against Apple's restraints. Apple reported selling 3.7 million iPhones, but AT&T said it had only received 2 million sign-ups. If a third of all iPhones were sold to consumers who unlocked them for use on other carriers, that would indicate a fundamental flaw in Apple's business model.
But Gene Munster of Piper Jaffray told The New York Times last week that his contacts had discovered that 40 percent of people buying iPhones at Apple Stores were buying more than one at a time. "The majority of the people who were buying more than one phone were Asian, and they were bringing small buses of people who all buy more than one phone," Munster said. He speculated that the phones are being sold in Asia, where it is much harder to purchase an iPhone, since Apple has yet to launch a carrier deal there.
"I don't know how many iPhones are really missing, but I do know many of them were bought with the intention of breaking them so they can be used on other carriers' networks, especially in Asia and Europe," Bajarin agreed. "But don't expect Apple to change their carrier-based revenue-sharing model any time soon. They will just make it harder to break the iPhone over time."