Gome Electrical Appliances Holding Ltd said yesterday it will open more than 500 mobile phone retail stores by the end of next year to tap into the world's biggest mobile phone market.

Gome, China's No. 1 home appliance vendor will open independent mobile phone retail stores in the big cities to sell handsets such as Motorola, Sony Ericsson and Ningbo Bird models. Gome said it had signed agreements with eight phone makers to group purchase five million phones in 2008.

Gome, which named the new stores "Gome Mobile," aims to generate revenue of 19.8 billion yuan (US$2.64 billion) from mobile phone business in 2008, double this year's level. That is expected to account for 10 percent of total handset market revenue in the domestic market, according to Gome's Vice President Sun Yiding.

In 2010, Gome's revenue from mobile phones is expected to hit 40 billion yuan, 15 percent of China's handset market, according to Sun.

"China's phone market is heavily competitive and the player with strong distribution ability will win the market shares, like new star Tianyu," said Kevin Wang, a Shanghai-based analyst at iSuppli, a US-based IT research firm.

The factors for success include sectors like promotion, market coverage, capital, price bargain and control of resellers, Wang added.

Personal computers and mobile phones are the potential profit engines for Gome, which has already dominated China's home appliance market, Sun said. Gome and Dell Inc, the world's No. 2 PC maker, signed an agreement to sell Dell computers in its stores in September.

(Shanghai Daily November 10, 2007)