Legend jumping into cell phones

The largest PC manufacturer in China plans to release Net cell phones in the near future as the company seeks to diversify its product base.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
3 min read
BEIJING, China--Legend Holdings, the largest PC manufacturer in China, plans to release Internet cell phones under its own brand name in the near future as the company seeks to diversify its product base.

The Tianji line of phones will be built around software from Microsoft and processors from Intel, according to Qiao Jian, vice president of marketing for Beijing-based Legend. The phone comes out of a joint venture between Legend and Xiamen Overseas Electronics, which was the first local company to be authorized to manufacture GSM (Global System for Mobile Communications) phones.

The company will specialize in data phones that can receive Internet signals and run PC-like applications and not participate in the general cell phone market, she said. Microsoft is promoting variations of its Pocket PC operating system, each tweaked for specific markets. In April, Legend, which maintains strong ties to Microsoft and Intel, came out with a handheld with wireless connections. The new product will be more phone than handheld, according to Jian.

Although many companies already ply the Chinese market, it continues to grow at an extremely rapid rate. China is the largest market for cell phones in the world, with an estimated 140 million to 150 million users. Approximately 4 million people sign up for cellular phones each month, said C.Y. Yeung, Intel's wireless applications manager for the Asia-Pacific region.

Chinese consumers have also shown no fear of fancy phones. Nokia and TCL Mobile Communication, one of the major consumer-electronics manufacturers in China, have made notable splashes with phones festooned with diamonds, gold and silver, according to various sources here. Short messaging is also skyrocketing, encouraging developers to come up with new cellular services.

"We're working with about 150 developers in China (on) software applications," Yeung said. Additionally, Intel is helping companies like Legend and TCL design their products.

"A lot of people have two cell phones," said Carl Yao, a former high-tech executive who recently moved back to China after living for several years in Boston. People like to use one phone for business and the other for personal matters, or to run a second, independent company. "I have a friend who has three," he added.

The move for Legend comes amid intense pressure in the PC market in China. While it remains one of the few markets still experiencing double-digit growth, pricing pressure has begun to take its toll on some manufacturers.

Haier, an appliance manufacturer that jumped into the PC market, is receiving interest-free loans from the government to support its PC efforts, said one software developer.

"It is tough, even for the multinational IT companies, but Legend has grown up in a competitive environment," said Jian, noting that the company's profits rose 42 percent in its last fiscal year, which ended May 23. Legend has about 30 percent of the local PC market. The company plans to begin international expansion, but will concentrate for the next two to three years on China because of the technology slump in the rest of the world, she said.

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