China-based Alcatel Mobile, the mobile division of French giant Alcatel-Lucent, is on a comeback trail, with plans to ship over 18 million handsets in 2008 and become one of the top five handset manufacturers within five years.
The company also plans to return to SA and will reopen operations in the second quarter of this year.
Speaking at a media briefing, at the Mobile World Congress, in Barcelona, CEO Fei Liu said about 40% of the units would be shipped to emerging markets.
The company has operations in China, as well as well other emerging markets, including Mexico, Brazil, Nicaragua and Russia, with its Europe, Middle East and Africa headquarters based in Paris. Last year, the company laid a solid framework, selling 11.5 million handsets globally, said Liu.
He noted that survival in the mobile phone industry was very difficult. However, the company had the right tools for a successful turnaround.
These included having a very low break-even point in terms of profitability, and being able to provide stylish phones at affordable prices. The company also has a good, well-established, multinational management team, he added.
Alcatel would not elaborate on its challenges, especially as they pertain to the reasons it left SA.
However, a paragraph in the company's interim financials in August last year said consolidated revenue for the six months ended 30 June 2007 amounted to HK$2.077 million, representing a decrease of 17% from the same period in the previous year. This was due to a "mix of external and internal factors", the company said.
Liu also noted that all handset manufacturers face same the fundamental problem of running out of new markets, and are looking to China to provide new avenues for growth.
As a China-based company, Alcatel was already well positioned to penetrate the huge Chinese market, as well as provide quality handsets and much lower prices, he said.
Good start in Africa
Alcatel Mobile's EMEA GM, Yves Morel, said the company already had a great start in re-establishing a footprint in Africa.
The company shipped over 2.5 million handsets to the Middle East and Africa region, and 1.3 million of those handsets went to Africa, he said. Alcatel only launched its operations in Africa in May 2007, and the sales seen were over a seven-month period.
Morel said entry-level handsets represented about 68% of sales for the company, with multimedia-enabled handsets accounting for 20% of sales.
To penetrate the African market effectively, Alcatel needs to have presence in SA, Morel said.
"SA is key, and it's very difficult to get into the Congo, Angola and many African countries unless you have presence in SA first."
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