Mobile phone operator Orange is betting on the launch of low-cost smartphones, its first handset purchase directly from a Chinese manufacturer, to drive down prices and break into new market segments.
Orange's marketing head said that the operator would begin selling a third generation (3G), low-priced smartphone developed by Amoi Electronics by the end of 2006 or early next year.
Orange, the mobile division of France Telecom, announced a partnership with Xiamenbased Amoi on the sidelines of a technology forum in Beijing.
London-based Frank Boulben said Orange's first purchase from Amoi would allow the operator to sell more affordable smartphones, which offer computing functions such as e-mail and Web browsing, to consumers in Western Europe as well as to users in emerging markets.
"We want to break into two new markets with low-priced smartphones," Mr Boulben said on the sidelines of the forum.
The company is betting on services such as music and video downloads to help increase income, while voice call revenues are under pressure from rising competition and falling prices.
Orange now sells smart-phones primarily to business customers in Western Europe but hopes the price cuts of almost 50 percent for resulting from its partnership with Amoi will draw individual European consumers, he said.
"We also want to introduce smartphones to emerging markets like Eastern Europe, the Middle East and Africa," he said. "That will be the first concrete achievement of our partnership with Amoi."
Orange is working on a number of other mobile phones with Amoi that could be marketed, complete with dual branding, in overseas markets next year, Mr Boulben said.
For Orange, sourcing handsets directly from a long-term Chinese partner allows it to take advantage of China's low production costs and fast pace of innovation.
The firm has long been a customer of phones developed by global brands such as Siemens and Alcatel in the country with abundant labour and low salaries. For Amoi, Mr Boulben said, it was a first step towards building a global brand, the grand ambition of a growing number of Chinese firms seeking to cultivate new markets and gain global expertise.
Besides Amoi, Orange has also been trying to forge close ties with China Telecom Corporastion, the larger of China's two fixed-line phone carriers with which it has been cooperating on research and development, procurement and exchange of know-how on 3G technology, he said.
Orange is keeping close tabs on developments in the world's largest mobile phone market, which is expected to begin issuing 3G licences and possibly open its market further to foreign investors in the years ahead.
Mr Boulben said Orange's further involvement in China depended partly on the regulatory landscape and market developments. "What we need to do is to assess what opportunities are available the day that this is clarified."
In the meantime, Orange will open its first handset sourcing office outside of France and Britain in Beijing next month, staffed by between five and ten people. The office will sit alongside a 150-strong research and development lab run by France Telecom, which also serves Orange. ..SUPL: