Nov 28, 2001

Nokia Corp. recently announced a team-up with more than 10 telecommunications and consumer electronics companies, including Japan's Sony Corp.

As a result, all the participants have agreed to open the platforms of their mobile phone frameworks and to provide the original code of their manufacturing handsets in order to preclude the entry of Microsoft Corp. into the wireless communication market.

This strategy will adversely affect Taiwan handset contract manufacturers belonging to the Motorola and Ericsson camps. Acer, VC and Arima now face a crucial decision about whether or not to transfer their loyalties in the future to Nokia.

Nokia's CEO had announced at COMDEX Fall 2001 that the company had secured cooperation from the world's mobile telephony heavyweights, such as Motorola, and mobile phone service providers, such as Japan's NTT DoCoMo Inc. and UK's Vodaphone. The members of the tie-up will open their mobile phone framework platform to introduce GPRS by phasing out GSM, and jointly march into the 3G mobile communications in the near future. The combination is expected to become the world's largest alliance agains Microsoft's ambitions to make inroads on this front.

The president of Nokia's Taiwan branch relaveld that even though GSM is the standard presently widely accepted by the public, other standards continue to exist in handset production. As a result, Nokia intends to standardize its production, thereby facilitating and streamlining the mobile communication development, and its team-up with other leaders increases the chance of it achieving the goal.

Nokia's ambitions, however, will come as bad news for Taiwan's handset manufacturers, which mainly source handset production to Motorola and Ericsson. The handset companies in the Motorola camp include ACM, Dialer Business Electronics, and Compal, while Arima and GVC belong to the Ericssson camp.