Sep. 11, 2009 (PR Newswire) --
SHENZHEN, China, Sept. 11 /PRNewswire-FirstCall/ -- Cogo Group, Inc. (Nasdaq: COGO) a China-based technology platform service provider of customized module design solutions and engineering and technology services to domestic and international companies, today announced a series of module design wins within multiple Smartphone and Smartbook products on both Windows Mobile and Android platforms. The Company's initial wins include blue chip Chinese handset vendors such as Huawei and ZTE, and it expects to secure contracts with other domestic China handset vendors as well. Cogo expects to begin recording small amounts of revenue from these contracts from the third quarter of 2009, with sales ramping up through the end of 2009 and into 2010.
"We expect strong market demand for digital media and cell phone solutions, driven by both domestic consumer and export business from Chinese vendors. We believe domestic handset vendors will continue to increase the number of Smartphone products aimed at both domestic and export markets," said Jeffrey Kang, CEO of Cogo. "This year we saw cell phone exports being extended from Chinese blue chip vendors, such as Huawei and ZTE, to many smaller players, who are gradually increasing their export volume and domestic market share. We serve more than 500 cell phone customers in both blue chip and SME spaces, and the proliferation of Smartphones from Chinese vendors is expected to increase Cogo's addressable market in a fast growing segment of the market. In addition, these modules typically have higher Average Selling Prices ("ASPs") than our corporate average."
"We are optimistic about our digital media and cell phone business in this quarter and in the second half of 2009, and expect this segment to grow in 2010. We have been relatively conservative in the first half of the year, as we were focusing on cash preservation and risk minimization to weather the global recession. We believe the worst is now behind us in China and we can focus on seeking new growth opportunities," said Mr. Kang.
As with the mainstream market, Cogo's current Smartphone designs are mainly based on the Windows Mobile platform. The Company expects to unveil an Android product in the fourth quarter of 2009. Since Windows Mobile and Android are broadly accepted platforms in the global market, it will help Cogo's customers expand their export business. The Company continues to experience growth in its combined digital media and handset business and has good future visibility with design wins for new features and applications including modules for motion sensors and the expected ramp-up of 3G and CMMB (China's mobile TV standard). The Company sees considerable opportunity in converged devices, which is a growth area in the Chinese mobile phone market.
