Nokia Strengthens Position In China Cell Phone Market

HONG KONG -

After signing a $2 billion handset supply contract with China's largest mobile phone distributor, Nokia can tell all competitors to forget about challenging its leading position this year in the world's largest market for cellular phones.

Nokia (nyse: NOK - news - people ) said Friday it had inked a deal with China Postel to sell $2 billion worth of handsets and mobile devices in China in 2008. In addition, the parties have agreed to strengthen strategic ties, especially with regard to development of distribution channels and marketing.

China Postel currently has about a 30% share of the wholesale segment of the Chinese cell phone market. Nokia has been distributing its cell phones across China through China Postel since 1998. Nokia also won China's largest handset order from China Postel, $2.5 billion, in 2007.

It is believed that the lower value of contract this year may be attributable to the fall in cell phone prices.

David Tang, vice president of sales for Nokia China, said Nokia has been a leader in the Chinese mobile phone market since 2004. With its best-selling N95, Nokia saw more than 38% growth in sales and sold a total of 70.7 million mobile phones in China in 2007, gaining a dominant 35% share of Chinese customers.

Total in-country sales of 6.4 billion euros ($9.9 billion) in 2007 made China Nokia's single largest market, taking 13% of global sales. The world's largest cell phone producer said last month it will expand the sales of its mobile smart phones and will increase the penetration of cell phone usage in China's rural areas in 2008.

news source -

http://www.forbes.com/markets/2008/03/07/nokia-china-postel-markets-equity-cx_vk_0307markets05.html