By Aharon Etengoff in San Francisco @ Tuesday, January 20, 2009 11:39 AM
Taiwan-based Mediatek has inked a lucrative deal to promote China’s TD-SCDMA 3G format with a government-run laboratory. The two entities will also collaborate on the development of new TD-SCDMA technologies and format standardisation. The agreement is expected to ensure a steady stream of orders from the mainland’s first-tier suppliers of mobile phones for Mediatek. The corporation has already managed to outmanouver dozens of Taiwanese telecom carriers that rushed to form partnerships with mainland companies in an effort to tap China’s profitable 3G market. It should be noted that Mediatek was recently awarded a contract for the manufacture of baseband chipsets used in Chinese EDGE based phones. Sharp reportedly chose Mediatek’s EDGE-compatible design over Qualcomm International’s 3.5G chipset for the SH6010C, which features a thin exterior and high-definition screen. The contract is likely to help the company raise its profile in the US market by linking to mobile phone supply chains utilised by Samsung and Motorola. Sharp mobile phones equipped with Mediatek’s chipsets have already obtained approval from the Federal Communications Commission (FCC). As IT Examiner previously reported, the launch of China’s new 3G service will almost certainly bolster the country’s slowing mobile phone sales. According to ITIS, Chinese mobile phone shipments reached a volume of 175.2 million units in the third quarter of 2008, representing 6.2 per cent sequential growth and 4.3 per cent year-on-year growth. The industry’s rate of expansion peaked in 2006 and has now slowed to mid-single digits. Nevertheless, official statistics indicate that telecom revenue reached a staggering 2.04 trillion yuan (US$304 billion) during the first 11 months of 2008, currently accounting for up to seven per cent of the nation’s gross domestic product (GDP).
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Shanghai. January 15. INTERFAX-CHINA – The recently announced cooperation between China Telecommunication Technology Labs (CTTL) and Taiwan-based chip maker MediaTek aims to promote the Chinese homegrown 3G standard, TD-SCDMA, an analyst told Interfax on Jan. 15.
On Jan. 12, CTTL and MediaTek jointly announced they would cooperate on handset testing and standardization in an attempt to “boost the Chinese handset market.”
However, the announcement caused speculation as to the real aim of the cooperation, as CTTL is under the China Academy of Telecommunication Research (CATR) of the Ministry of Industry and Information Technology (MIIT), while MediaTek is well-known for making most of its revenue from chips sold to unlicensed Chinese handset makers.
According to a report on IT news site Chinabyte.com on Jan. 14, the cooperation will help MediaTek attract more global handset company clients like Nokia and Motorola, as handsets using MediaTek chips will enjoy a smoother passage through CTTL’s network access approval testing. The article also said that CTTL could have agreed on the deal with an eye to the additional funds it would generate.
Sun Changxu, an IT journalist and analyst, said on her personal blog on Jan. 13 that the cooperation signals the government’s tacit acceptance of illegal handsets in China. She also said that the move will improve the design and testing of TD-SCDMA handsets, as MediaTek is one of the biggest TD-SCDMA chip providers.
Zhang Yanling, an iResearch analyst, agreed that the cooperation was aimed at the development of TD-SCDMA industry, although she believed other theories as to the motivation behind the cooperation lacked firm grounding.
According to Zhang, chip makers previously given responsibility for the development of the TD-SCDMA industry by the government, such as Spreadtrum, had failed in their task and been forced to end their high-level government cooperation on TD-SCDMA.
“The government has turned to MediaTek. The reason the company has agreed to the cooperation is that it will now be directly involved in setting the future course of TD-SCDMA,” Zhang said.
She said CTTL would not have just turned to MediaTek out of financial considerations, and that the government’s attitude towards illegal handsets is still difficult to gauge.
Interfax commentary: MediaTek is really the only viable TD-SCDMA chip maker for this role, following the collapse of Commit last year, the heavy losses Spreadtrum encountered from its TD-SCDMA ventures, and the foreign takeover of T3G following Datang Mobile selling its stake in the company. MediaTek has extensive TD-SCDMA experience, having cooperated with Datang Mobile to secure large shares of China Mobile’s TD-SCDMA equipment tenders. The cooperation is also something of a PR coup for MediaTek, which can now shake off its reputation as a provider of chips for illegal handsets and take a leading role in the TD-SCDMA industry, secure in the knowledge that it has friends in very high places.