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Motorola Aims for Bigger Slice of Smartphone Pie

Cellphone maker Motorola Inc foresees great growth potential in China's smartphone market as more and more users start surfing the Internet with handsets, a top company official said on Monday.

Sanjay Jha, co-chief executive officer of Motorola, said the market potential for smartphones in China is poised to gallop over the next few years as the world's migrates to 3G and even 4G services.

Smartphone sales account for nearly 15 percent of the total phone sales in China, whereas in the United States, the figure is 30 to 40 percent. The company has in recent times not been able to replicate the market success the "Razr" brand enjoyed a few years back. Jha, however, expressed confidence that Motorola has turned the tide and is now at "the beginning of a comeback".

According to research firm Canalys, Motorola's worldwide smartphone shipments surged from 3.3 percent last year to 4.7 percent in the first quarter of this year, behind Nokia, Research In Motion, Apple and HTC. Mr.Jha said launching diversified products is the key for Motorola's success in China, its second largest market after the United States. The company has launched seven new smartphones in China during the past six months. China is unique in many ways. The PC penetration here is lower than many other countries, in turn, will also see more people opting for mobile devices like smartphones.

Jha reiterated that the company plans to split the existing business of mobile devices, household products, enterprise mobility solutions and network services into two independently listed companies during the first quarter of next year. However, he refused to comment on the reported attempt by Chinese telecom gear maker Huawei Technologies to acquire the company's network equipment unit, adding that the Motorola will focus on its own success and brand.

According to the figures from the Ministry of Industry and Information Technology, China's 3G users reached 18.08 million by the end of March. Mobile Internet users soared to 174 million during the same period, accounting for 22 percent of the total cellphone users in the country. That means that most of the users are still using feature phones for data services.

"In China, the majority of cellphone users are still feature phone users," said Pang Jun, analyst from research firm GFK China. Although content that needs smartphones is increasing in China, cellphone makers need to have significant presence in the low-end handset segment to succeed in countries like China, said Pang.

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