benefon.jpgBenefon, the Finnish consumer electronics firm, has formally entered the Chinese market by opening an office in Shanghai.

Benefon, listed on the Helsink stock exchange, is best known for its
GPS-enabled mobile phones and its interesting that it sees potential in
China for these relatively expensive gadgets — the retail price for
its Twig Discovery navigation device (pictured left) is €550 in Europe.

As Benefon admits, the market for personal navigation devices is
relatively immature in China. But that means that China is also a lot
less saturated that Benefon's established markets in the west, where it
admits that sales in first half of 2007 have been “below expectations
due to intensified competition and price erosion.”

One niche market for Benefon could be helping well-heeled tourists
and foreign visitors find their way around China. In Europe, its
already a common sight to see tourists clutching GPS devices instead of
the traditional paper map as they stroll around the tourist hot spots.

But it will be interesting to see if Chinese take so readily to Benefon's GPS-enabled phones, given their high price.

Benefon doesn't compete in the dedicated in-car navigator market,
where at least 40 companies slug it out and price competition is
intense. Nevertheless, I suspect that given China's rapid car growth,
this is the market where GPS devices are going to have most success in
in China, just as has already happened in the west.

Jeff Lin has been recruited as managing director of Benefon China.
Before joining the company, he was general manager of a JV between
China NavInfo and Navteq , the US company specialised in digital map
data.


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