Neither Sony nor Ericsson phones will be issued anymore. Instead, the new products will carry the combined brand name of Sony Ericsson.

The 50-50 joint venture aims to become the world's leading manufacturer of mobile phones within five years, said Jan Wareby, chairman of Sony Ericsson (China).

Sony Ericsson mobile phones will be produced in two factories in Beijing's suburbs.

The company will also gradually transfer its global cell phone manufacturing capability to Beijing, Wareby said.

A research center, which will study local customers' habits and design China-oriented cell phones, was also opened yesterday.

Sony Ericsson (China) will take advantage of low labor costs here to supply the phones to local customers as well as the international market, Wareby said.

The launch of Sony Ericsson (China) will further fuel the competition in China's mobile phone market. But its ambition to become No 1 in the global handset market, will be difficult to achieve, industry insiders said.

Because China is home to the world's largest mobile telecom market, it is a major battlefield for international mobile phone vendors. Consumers in Beijing can choose from more than 100 varieties of cell phones at prices ranging from 500 yuan to 5,000 yuan (US$60 to US$600).

Last year, Chinese consumers bought 60 million mobile phones, 85 per cent of which were foreign.

The high growth rate will continue this year with new mobile phone users growing at a rate of 5 million a month in the first six months.

But competition in the market will become even fiercer this year as domestic companies are rapidly catching up with their overseas counterparts and eroding shares of these international vendors.

Three years after the debut of the first domestic mobile phone, China's cell phone vendors are now producing very chic handsets with competitive prices, functions and qualities.

To keep its competitive edge, Sony Ericsson will produce cell phones with more applications, such as color screens, Internet browsing and a digital camera that can send photos to other mobile phones or email boxes.

Two kinds of Sony Ericsson cell phones were introduced yesterday. Three more are due out before January.

(China Daily August 13, 2002)