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n style='line-height:1.5;'>In 2001, Nokia invited its main global partners including mainly hardware providers to invest about RMB 10 billion together in Star Net Industry District in order to form integrated production capabilities and to decrease cost.9

During 2003, Nokia released 15 styles of handsets and ranked no.1 of the GSM mobile handset. As is reported, the top 3 brands of GSM in 2003 are Nokia、Motorola and Samsung, with market shares respectively 17.23% 、16.46%、and 11.81%.10

When entering into the new century, Nokia strengthens its cooperation with China in the field of communication technology and takes active part in the development of Information Industry in China. At the same time, Nokia commits itself to employment and cultivating of the local talents.

To the end of 2004, Nokia arrived at no. 1 of the whole handset sales in China. In 2005, the rising trend continued. It is calculated that Nokia captures 25.8% of domestic handset market share in 2005, realizing 10.8% more than in 2004. By contrast, the second brand Motorola only gets 8.7% of market share11.

After decades of tillage, Nokia has really established its leading position in the handset industry in China; it is believed that Nokia will actualize greater success in the mobile

Chapter 3. The mobile handset industry

As is well known, competitive strategy is the outcome resulting from competitive environment. Without given circumstance, it will become meaningless to discuss whether the employment of certain competitive strategies by some enterprises is successful. Therefore, before anatomizing the competitive strategies of Nokia, we need to describe the notion of mobile handset industry and its main composing elements.

1. Definitions

—What is a mobile handset

A mobile or cellular phone is a long-range, portable electronic device for personal telecommunications over long distances.

Most current mobile handsets connect to a cellular network of base stations (cell sites), which is in turn interconnected to the public switched telephone network (PSTN) (the exception are satellite phones). Cellular networks were first introduced in the early to mid 1980s (the 1G generation). Prior mobile handsets operating without a cellular network (the so-called 0G generation), such as Mobile Telephone Service, date back to 1945. Until the mid to late 1980s, most mobile handsets were sufficiently large that they were permanently installed in vehicles as car phones. With the advance of miniaturization, currently the vast majority of mobile handsets are handheld. In addition to the standard voice function of a telephone, a mobile handset can support many additional services such as SMS for text messaging, email, packet switching for access to the Internet, and MMS for sending and receiving photos and video.12

2. Brief Introduction on Global Mobile Handset Industry

Broadly speaking, the mobile handset industry consists of upstream suppliers、whole handset

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