Legend, aggressively refreshing its handset portfolio, hopes to achieve the runaway success of its PC business in China's fast-growing mobile phone sector.

The company, the biggest PC maker in China, last week unveiled five new cellphone models - including a smart phone with PDA (personal digital assistant) functions - as part of its "summer blitz."

Legend bets the converged handheld device, the G900, which it has been touting as its flagship product, will help it make a dent in the high-end cellphone market.

The G900, with a 260,000-pixel colour screen, supports pen input of Chinese characters, given the growing popularity of messaging in China, and it can be connected to a digital camera.

The innovative gadget, with two CPUs, can be used in airplanes, the company said.

The phone also has a Chinese-English dictionary.

The model has the Hopen OS (operating system), a Chinese platform for mobile phones, Fei Hongxing, vice-general-manager of Legend Mobile Communication Technology Ltd, told China Business Weekly.

Hopen competes with software behemoth Microsoft's smartphone platform, symbian OS used by traditional handset makers such as Nokia and Motorola, and Palm OS, developed by US-based PDA maker Palm.

"We have a long co-operation with Microsoft in the computer business," Fei said.

"So we are not excluding the possibility of using Microsoft's operating system in our future PDA-phones."

Legend is not alone.

Ningbo Bird, the largest domestic cellphone maker, is scheduled this month to unveil a PDA-phone model that uses a self-developed OS, industry insiders said.

TCL and Amoisonic also plan to introduce smart phones.

"Fashion took centre stage in China's mobile phone market last year," said Mao Zhihui, also a vice-general-manager of Legend Mobile Communication Technology Ltd.

"This year, fashion, MMS (multimedia messaging service), entertainment and business intelligence applications will be the major themes."

All five phone models Legend debuted last week have colour screens. The new product portfolio covered all market segments.

Converged mobile devices are gaining in popularity, although they still account for a small portion of China's cellphone market, Mao said.

"Nowadays, cellphones are becoming increasingly smarter devices, a trend which we must not ignore," he said.

A report released last week by data tracking firm IDC indicated global shipments of PDA-phones in the second quarter increased a whopping 330.7 per cent year-on-year.

Legend expects smart phones to boost its sales in China's highly competitive market, where manufacturers have watched profit margins decrease due to a production glut and aggressive price cuts in the low-end and mid-range segments.

High-end cellphones, so far, still promise high profit margins, analysts said.

For example, the gross profit margins of Amoisonic's cellphones reached 37.33 per cent in the year's first half.

Amoisonic has long been focusing on high-end cellphones.

In contrast, gross profit margins for Ningbo Bird, which has mainly focused on low-end products, were 16.52 per cent.

Gross profit margins for Legend's handheld devices, mainly cellphones, in the first quarter reached 13.34 per cent.

That showing was due largely to Legend's late arrival in China's mobile phone market.

(Business Weekly 08/12/2003 page1)