Sunday, January 8, 2012

Singapore Loses Nokia to China

Notch one more victory for China in the battle to lure investment from the Western world.
Finland’s Nokia Corp., the world’s largest mobile phone maker by volume, said it is moving its Asia-Pacific headquarters to Beijing from Singapore as part of plans to raise business efficiencies and meet savings targets.
The move is a disappointment for Singapore, which along with other Southeast Asian nations has been scrambling to hold on to (or win back) Western investment after years of rising interest in China, whose rapid growth and giant consumer market helped it eclipse the one-time “tiger” economies of Southeast Asia over the past decade. More recently, many analysts have argued Southeast Asia is starting to look more attractive again as disenchantment with China spreads due to rising costs, intellectual property violations, and other problems there, along with rising incomes in Southeast Asia.
Google, for instance, unveiled plans to open new offices in Kuala Lumpur and Bangkok last year, and a number of giant automakers including Suzuki Motor Corp. have recently announced plans to expand in Indonesia.
But at the end of the day, it’s hard to beat China, whose costs are still a lot lower than places like Singapore, and whose expanding consumer market dwarfs the smaller countries of Southeast Asia.
In Nokia’s case, the move to Beijing makes all the more sense considering that the phone maker is targeting China to drive much of its future growth. Central to that strategy is a partnership with Microsoft Corp. to offer Windows-based phones in China this year. Nokia has seen its market share plummet in recent years on rising competition from Apple Inc.’s iPhone and Google Inc.’s Android operating platform, and last year it announced restructuring plans that involved cutting more than 10,000 jobs in manufacturing, and research and development.
The move is “part of our strategy to adapt our operations to the business environment to ensure our competitiveness. This includes an increasing focus on assembly in Asia, close to our suppliers,” a Nokia spokesman said Wednesday in an emailed response to queries from Dow Jones Newswires.
Nokia is currently implementing the move. The spokesman declined to specify how many employees would be affected by the move, what types of positions are being shifted, or if any jobs would be cut.
The company will continue operations at its Singapore office, the spokesman added

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