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| June 2002 |
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| COMPANY IN ACTION |
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Microsoft May Wait for Mobile Pay-Off in China
(May 17,2002)Microsoft Corp is willing to invest for years without reward to win
over China, the world's biggest mobile market, in its global campaign to conquer
the cellular industry, a company official said Friday.
The Redmond, Washington-based maker of the popular Windows operating system
is vying with Britain's Symbian to become the standard software used in new
high-performance wireless devices called smart phones.
So far, few of the world's cellphone makers have signed on with Microsoft.
The top four Nokia, Motorola, joint venture Sony-Ericsson and Siemens are
shareholders as well as customers of Symbian.
On Thursday Microsoft announced that China's fast-growing handset maker TCL
Mobile would use its mobile software standard in cellular phones and handheld
computers. This was the U.S. giant's first public tie-up in China's mobile
sector.
"It's important to find some early wins, some areas we can win early on,"
said Juha Christensen, vice president of Microsoft's mobility group, referring
to China.
Microsoft has long sought to build bridges into China's mobile market, which
adds about five million mobile users each month and which Christensen believes
will eventually be twice the size of the markets in Europe and the U.S.
combined.
Winning this market will require patience, since relatively few of China's
cellular subscribers use high-end data services, such as graphics downloads and
mobile chat rooms, which are more popular in Europe, Christensen said.
"We will certainly for a long time continue to invest a lot more than we're
going to get out of this for a long, long time," he said in an interview with
Reuters one day after announcing a tie up with a major Chinese handset maker.
"If it happens next year, that's just great," Christensen said.
"If it takes five years we'll continue to stick in there. That's one of the
nice things about having the ability to think long term," said Christensen, who
previously worked for Symbian.
A poor public image in China has haunted Microsoft, partly due to what are
seen as high prices for its PC software in the mostly low-income country,
although executives say the situation has improved from a low point in the
1990s.
Also after more than a year of talks, Microsoft has yet to succeed in
striking deals with China's two cellular carriers China Mobile Communications
Corp and China Unicom Group, both state-owned, Christensen said.
"The carriers are key to this," Christensen said.
Microsoft has already struck alliances with Europe's largest operators,
including Britain's Vodafone, Germany's T-Mobile, Spain's Telefonica Movile and
MMO2 to use its mobile software.
These operators are likely to order Microsoft-standard cellphones with their
own brands from Asian contract manufacturers, although only a few have announced
such deals so far.
Cingular, the number two U.S. wireless firm, is also among carriers to market
phones using Microsoft's Pocket PC Phone Edition software.
China has been less than kind in the past to Microsoft, which has lost out on
hundreds of millions in potential revenue due to piracy.
According to the Business Software Alliance, an independent group made up of
member software firms including Microsoft, the piracy rate in China is more than
90 percent.
SOURCE: Reuters
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Sun Micro: Corner Turned in Asia, with China's Help
(May 16, 2002) Sun Microsystems, which has been fighting for months to grab a
larger share of shrinking spending on information technology, says it has
finally turned the corner in Asia.
After a dismal year for tech firms when Sun struggled to move its servers, even
in booming China, the U.S. maker of high-end computers that run corporate
networks expects sales to rise over the rest of 2002, a senior executive said on
Thursday.
Things are looking brighter for Sun virtually across the region from China,
Sun's second-biggest Asian market, to Southeast Asia and Australia, said Jay
Puri, Sun's U.S.-based Asia-Pacific vice president.
To add icing on the cake, Puri said Sun is beginning to pick up customers from
Hewlett Packard as the U.S. computer giant merges with former rival Compaq.
"Particularly this quarter in Asia, I'm starting to sense that the overall
climate is strengthening, the size of deals are increasing, and the pipeline is
looking better," Puri told Reuters in an interview on the sidelines of a
Sun-sponsored seminar.
"Japan is the only geography (for us) that is in a little bit of a downturn," he
said.
Quickening activity may not translate into actual business until the next one or
two quarters, Puri said.
Perched comfortably on a sofa in his 25th floor hotel suite overlooking
Shanghai's bustling financial district, he said Sun and other IT vendors are
zeroing in on China, which accounts for nearly a third of all spending on
servers in the Asia-Pacific.
OPERATORS, START FOCUSING
Chinese firms are investing more on IT, even though their IT spending on average
is just one percent of revenue compared with U.S. firms' 4-5 percent, he said.
And the increasingly competitive telecoms sector also offers ample
opportunities, Puri said.
"Obviously China is the brightest spot," he said. "As China becomes a global
manufacturing powerhouse... the only way they can do that is by aggressively
using IT to become more efficient."
"We never saw our business here decline that much."
Sun is also poised to ride an anticipated jump in China's network infrastructure
spending in the medium term, Puri said.
China delayed part of a rapid infrastructure roll-out this year as it raced to
complete a telecoms sector overhaul and break-up of its monopoly carrier,
culminating on Thursday in the launch of two new operators, China Telecom and
China Netcom.
The newly created competition means operators will soon have to start spending
again, he said. Industry experts see renewed spending from the second half of
2002 to early 2003.
"The restructuring actually defocused the organization over the past few months
and we did see a slowdown in our business," Puri said. "Now that it's been done,
I'm hopeful that the spending will pick up... They need to invest to be
competitive."
While a regional recovery bodes well for IT vendors, Sun may see gains from
another source: the merger between HP and Compaq.
Puri says HP and Compaq customers, worried that products they are using would be
dropped by the new entity, have approached Sun to discuss switching loyalties.
"HP and Compaq combined means one less competitor for Sun," he said.
Source: Reuters
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Honeywell Optimistic on Boosting China Sales to 2 Billion
(May 27, 2002) Honeywell, one of the world's leading providers of a range of
technological goods and services, fully expects to boost its annual sales in
China to two billion U.S. dollars in the near future from its current 600
million U.S. dollars.
David M. Cote, President and CEO of Honeywell International Inc., who has just
concluded a brief visit to Shanghai and Beijing, said recently in Beijing that
he was upbeat on increasing sales, adding that China was a good place to do
business.
"We can do better in China than the current 600 million U.S. dollars", he
promised.
Predicting the future growth of China's aviation industry, Cote said he believed
that Honeywell, which provides customers worldwide with aerospace products and
services, leading technology for buildings, homes and industry plus many other
types of advanced technology and services, faced excellent business
opportunities in the huge Chinese market.
Seeing a bright future in the construction, automobile, environmental
protection, chemical and electronic industries, Cote said Honeywell with its
comprehensive technological and service capacity was keen to be part of China's
modernization drive.
Honeywell had not paid enough attention to the Chinese market before, Cote
admitted, so it would take solid work in the future to push up sales.
The 24-billion-U.S. dollar company employs approximately 120,000 people in 95
countries with headquarters in Morristown, New Jersey, U.S.A. It is one of the
30 stocks that make up the Dow Jones Industrial Average and is also a component
of Standard & Poor's 500 Index.
Source: People's Daily
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Chinese Press Attracts International Printing Giants
(May 17, 2002) The world's top printing companies such as Fuji Xerox, Epson and
HP, see great potential in China's press industry, sources at the on-going
International Printing and Equipment Exhibition said Friday.
With rapid changes in information technology, the press, as the major,
traditional instrument of the mass media, faces a great opportunity for
development.
Fierce competition means newspapers have to lessen publishing time and smarten
their content. Better, more efficient proofreading and lower production costs
have become the key to staying competitive for the whole industry.
Fuji Xerox, the largest document processing provider in the Asia-Pacific region,
has developed a new type of laser printing system for the Chinese press.
Currently, proof printing is the bottle-neck in the publishing system. Standard
laser printers can only produce A4 or A3 sized proofs, which had to be cut and
pasted to match the actual size of a newspaper.
Statistics show that in China, one newspaper needs 200 pieces of A3 proof sheets
every day, while newspapers with more pages may need 400 pieces.
The Fuji Xerox printer can print an A1 size proof sheet. Newspapers of various
sizes may print whole pages of an edition, avoiding the old tedious
cut-and-paste procedure.
The printer has a separate selenium holder and cartridge, which has changed the
traditional way of replacing both at the same time when either doesn't work.
So far, the People's Daily has adopted the new system, which costs two thirds of
the old.
Statistics show in 2001 the daily circulation of China's press exceeded 50
million.
Source: People's Daily.
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Office 1 Superstore to Tap China's Office Supplies Market
(May 28 2002) Office 1 Superstore of the US announced Monday in Shanghai that
it will open 500 chain stores selling office supplies in China in the next three
years.
This east China metropolis will be the starting point and the center of its
China business. A 4,500-sq-m general office will be opened in downtown Shanghai
in the next three months, and in two years the company hopes to operate a total
of 20 central stores and franchises in the city.
An official with the company said that Office 1 Superstore has chosen to enter
the Chinese market at this time mainly for three reasons: First, import tariffs
for office supplies have dropped significantly following China's entry into the
World Trade Organization; second, there is still a lack of prominent brands and
services in this field in China; third, China has an abundance of inexpensive
but high-quality office supplies that can well meet the requirements of many
transnational companies.
The official predicted that its purchases of office supplies in China would
reach between 200 million and 300 million U.S. dollars in 2003.
Statistics show that annual sales of office supplies amount to 60 billion yuan
(about 7.23 billion U.S. dollars)-worth in China.
In prosperous coastal cities such as Shanghai, per capita consumption of office
supplies exceeds 100 yuan (about 12.05 U.S. dollars)-worth annually.
Office 1 Superstore has already opened more than 350 chain superstores selling
office supplies in 20-odd countries and regions.
Source: People's Daily
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