Nokia confident about handset sales during October holidays in China

David Tang, vice president of Nokia China, has said the company is very optimistic about handset sales during the week-long holidays in China that start from October 1. Despite seeing a rise in non-branded handsets in China, Tang stressed that Nokia has measures to ensure its sales.

Citing sales records in 2007, Tang said the October holidays play a critical role bringing in brisk sales in China. Information supplied from partners shows that demand during the holidays should be also strong this year, he noted. Amid the anticipated sales boom, Nokia has prepared inventory to meet demand, he said.

Despite having a 40% share of China's handset market, the 16% sequential fall in shipments seen in the second quarter has brought about concerns about ongoing sales in the territory. Some industry watchers interpret Nokia's optimism as a recovery following the Beijing Olympics.

Tang stressed that China should still offer substantial potential, given that handset penetration in many rural areas is as low as 20%. Also, structural reforms among telecom service carriers, plus upcoming demand driven by 3G networks, should all fuel the China market with new demand drivers, Tang said.

Commenting on the rising position of non-branded handsets, Tang said the China government has vowed to solve the issue. For Nokia itself, the company has also adjusted its strategy to meet the potential threat from this segment. He admitted that non-branded handsets play a vital role in China's handset market and that Nokia is seriously tackling the problem, as there is a significant number of competitors in the segment.

Nokia has already made adjustments in brand promotion, channel management, after-sales support and pricing strategies, Tang stated. A fundamental solution is to educate the value that well-known brands can offer to customers. Whereas for channels, Nokia also offers support for training and after-sales services in order to help enhance channel partners' profitability when promoting Nokia handsets. The price range of Nokia's low-cost handset has already edged down to 200-300 yuan, a similar level as some non-branded handsets. Thus, pricing is no longer an issue for the leading handset player.