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China's biggest cell phone maker partners Qualcomm

By Wang Xing (chinadaily.com.cn)
Updated: 2008-12-23 19:36

US chip maker Qualcomm announced on Tuesday a partnership with China's largest domestic mobile phone maker Beijing Tianyu Communications Equipment to make third generation (3G) mobile phones, in an effort to ride on the expected boom of China's upcoming 3G market.

Related readings:  China Mobile to build more base stations for 3G  3G spending to hit 280b yuan in next 2 years  Telecom regulator says 3G licenses coming soon  China 3G pace gathers speed

Qualcomm will grant Tianyu a patent license to manufacture and sell mobile phones based on the CDMA2000 standard, which will be adopted by China Telecom after the country's newly granted 3G licenses come into effect.

The two companies will also cooperate to provide mobile products for the global market.

The deal between Qualcomm and Tianyu will give a shot in the arm of China's CDMA business, which had been run by China Unicom for years but was recently transferred to China Telecom as part of the country's telecom restructuring.

China Telecom, which kicked off its CDMA service on Dec 22, has promised to invest over 80 billion yuan ($11.68 billion) on network upgrading and handset purchase.

Rong Xiuli, president of Tianyu, said purchasing orders from telecom operators will contribute to over 50 percent of China's mobile phone market in 2009 (compared with 20 percent in 2008) as the retail market in the country would be significantly impacted by the global economic slowdown.

She said Tianyu will release over 20 CDMA handset models in 2009, helping to boost the company's revenue by 20 to 30 percent.

Founded in April 2002, Tianyu has a strong sales network with 57 subsidiary offices and 653 service centers and outlets across China. The company sold 17 million handsets in 2007 and the number is expected to reach 24 million by the end of 2008.