As time entered the year 2006, 3G has drawn closer and closer to us. The outcome for national mobile phone brands is yet to be seen.

Before the year 2005, national mobile phone brands performed robustly, winning over 60 percent of the domestic market with channel expansion and garish designs, leaving foreign brands a gloomy prospect.

However, since 2005, ambitious domestic enterprises found that their foreign counterparts strengthened local supply chain to reduce cost and accelerated launching new products in a head-on battle. Foreign companies, headed by Nokia and Motorola, not only developed high-end handsets, but also cast their eyes on the low end while many national companies found their way back cut by their foreign rivals.

Home-made brands, except for Lenovo with a growth, all lost their market and saw their profits drastically down, according to statistics released by Beijing-based SINO Market Research Ltd. last October.

In fact the plight of national handsets is just part of the overall situation for Chinese enterprises, which is due to a lack of self-innovation capability. Chinese brands remain dependent on others not only for core chip, but also design. Once others awake, you'll hardly have any competitiveness.

As the era of 3G is approaching and the competition escalated in both R&D and operation, quite a number of enterprises can't help but have a try in a bid to win back. However, how to deal with the more difficult channel management and after-sale management? Whether to continue expanding the domestic market or to stake on overseas? Whether national brands are to be maintained? Uncertainties lie ahead of national brands. However, one thing is certain, that is 3G might still mean more a challenge than an opportunity if national brands fail to improve their self-innovation capability.

By People's Daily Online