The likes of Nokia and Motorola do not intimidate little-known E28, a Shanghai-based start-up that manufactures mobile phones that run the Linux operating system. While the majors well understand the communications side of the business, they often lack comprehension of the computing side. 'We understand both, and that gives us an advantage in making smart phones,' chief executive Roger Kung said. The company will need the edge. It is taking on the big brands in the highly competitive mainland market. Its phones sell for as much as 6,000 yuan - in a country where consumers are accustomed to spending about a third as much. The firm, which has its main offices in Shanghai and Kowloon (with 31 developers and engineers in Hong Kong) claims its e2800 model is the world's first Linux-based handset. In addition to saving on licensing fees, using Linux over Windows from Microsoft allows for quicker product development. 'Linux was a pretty easy decision for us. The rate of innovation on that platform is very fast,' Mr Kung said. Data platform director Kenneth Lam said the first Linux phone took 10 months to develop, but later models could be produced in six to seven months, now that a software platform had been worked out. Software is becoming increasingly important to handset manufacturers, especially with the advent of new applications such as mobile gaming, video downloads and other multimedia content. This is forcing phone makers to work more closely with operators to customise offerings. Stefan Rust, director venture and strategic investments, corporate strategy and development at Sun Microsystems, said: 'Data services are leading towards mass-customisation of mobile phones. Phones will be developed for special purposes, suited to specific customer niches.' Voice was a standard capability that did not vary between handset models. Not so for data. 'With voice all phones work the same, but with data the target is for different niches. Not everybody will want an MP3 player,' he said.
