China's top two mobile phone makers said they plan to boost exports sharply next year as they look for growth opportunities outside their increasingly saturated home market.

Ningbo Bird and TCL Communication Technology Holdings have spent the last year building up their export networks as they prepare to take their domestic rivalry with the likes of Motorola and Nokia to the world stage.

TCL's overseas strategy includes a joint venture with France's Alcatel, while Bird plans to build on recent alliances with France's Sagem and Germany's Siemens to tap the lucrative European market.

"The domestic market is getting saturated, so we have to go to foreign markets for growth," Yang Zheng of TCL's international business section told Reuters.

"Because we're a domestic name, our brand equity isn't very big outside China. Our big advantage is price," he said at the China Hi-Tech Fair 2004 in Shenzhen.

Yang said TCL, China's No 2 domestic brand, expects to export up to one million handsets this year, or about a tenth of its previously stated output target for the year. Most of its foreign sales so far have gone to less developed markets like Thailand, Bangladesh, Indonesia and Viet Nam.

But the company hopes to raise the total to "many millions" and possibly as high as 10 million next year by building on its new relationships with Alcatel and others.

Nomura International analyst Lily Jap said TCL's target of one million exports this year seemed high compared with its previous guidance.

But the target of up to 10 million next year could be attainable if the foreign-focused Alcatel venture produces about nine million handsets next year.

Meantime, Bird has already beat its previous export target of two million handsets for this year and now expects to reach about three million - 10 times its exports last year, said Li Zhu of the company's international operations department.

She said Bird expects to double its foreign sales to about six million units next year, as its young overseas sales network starts to build momentum.

"This year we've started to put a big emphasis in this area," she said. Most of its export models are low-end to mid-market products priced at US$100 or less.

If the company meets its export target, foreign sales would grow to about a quarter of total sales from about one-sixth this year.

Nomura's Jap said her biggest concern with Bird was the potential for conflict because of its separate relationships with European rivals Siemens and Sagem.

China is the largest cellphone market, with an estimated 87 million units expected to be sold this year, about 12-13 per cent of the world's total.

But the growing crop of domestic players joining a market once dominated by foreign names has led to stiff competition, with many reporting steadily eroding margins as they battle for market share.

(China Daily October 15, 2004)