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Amoi lately entered into a strategic cooperation agreement with a telecom product company in Shenzhen, under which the Xiamen-headquartered company will outsource mobile phone production and distribution to its partner, disclosed sources familiar with the matter.
In detail, Amoi will be responsible for the R&D of 2G, 2.5G and 3G mobile phones, while its cooperator will take charge of production and sales, said one source.
"The cooperation is one of the most effective ways to secure a continuous product supply and, strengthen the Amoi brand awareness in the market, " said Xi Dawei (transliterated), general manager for the Shenzhen company, in response to the aforesaid partnership, "Only by this means will Amoi get opportunities to bring its brand into revival in the future."
The company has built up an operating center for Amoi in Shenzhen, according to Mr. Xi, adding that one of the major tasks now is to rebuild the Amoi brand image so as to restore the mobile phone distributors' confidence.
The Shenzhen company is expected to make two models of Amoi-branded mobile phones available in the market in July, and lift the figure to 10 by October, according to the cooperation agreement.
The Amoi collaborator has reached agreements with a batch of domestic mobile phone retailers to include the Amoi models in their promotion lists from July. Companies that have entered into such agreements include big retailers like Suning Appliance Co., Ltd. (SZSE: 002024), D.Phone Mobile Retail Chain (D.Phone), and Tiantian Mobile.
Market observers, on the other hand, described such an alliance as a forced choice when the Xiamen mobile phone maker is burdened with heavy debts. Amoi has halted operation because of a lack of working capital. The company's liabilities stands at CNY 2.7 billion roughly, disclosed an Amoi executive.
Outsourcing mobile phone production and brand operation to its partner is one of the few ways for Amoi to bring in profits while avoiding a possible swelled loss, pointed out an executive for a domestic mobile phone company, noting that the decisive factor is the operating capacity of the Amoi partner.
Set up in September 2006, the Amoi cooperator serves as a national and provincial distributor for domestic mobile phone makers like TLC and Changhong.
(USD 1 = CNY 8.63)
Source: dycj.ynet.com (June 23, 2009)
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