K.C. Swanson
City dwellers are upgrading their phones to take advantage of features like color screens and built-in cameras, which means demand exists for TI's new chip.
"The replacement rate in China is very high, with replacements accounting for around 50% of [cell phone] shipments," says Jason Yin, managing director of In-Stat China. Nokia (NOC Quote - Cramer on NOC - Stock Picks) and Motorola (MOT Quote - Cramer on MOT - Stock Picks) have each managed to gain share by aggressively selling cheap handsets in China's less affluent interior. "They fully seized the opportunities in tier-two and tier-three cities and rural communities with their low-cost phone lines," Yin says. TI also has rural residents in its sights, hoping they'll eventually upgrade to phones with multimedia features. "For many people [in China], when they one day connect to the Internet for the first time, they will experience it through their cell phones," Templeton says.
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