Tue, Apr 01, 2014 - Page 14 News List

Qualcomm Inc is set to get a boost in China

Bloomberg

A Qualcomm Inc logo is illuminated at the company’s pavilion at the Mobile World Congress in Barcelona, Spain, on Feb. 26.

Photo: Bloomberg

China Mobile Ltd (中國移動) last month said it will start offering discounts on smartphones that work on faster networks in China and other countries, in what Hong Kong-based spokeswoman Rainie Lei (雷雨) said is a “main push” for the world’s largest carrier.

The move would put Qualcomm Inc in pole position because it is the dominant supplier of mobile chips that offer faster speeds on more networks, Evercore Partners LLC analyst Mark McKechnie said in San Francisco.

Just 1.34 million of China Mobile’s 775.6 million customers were using the latest high-speed services at the end of February, according to the service provider’s Web site.

“If you want that kind of volume, you’ve got to give it to Qualcomm,” McKechnie said.

China Mobile predicts it will sell about 100 million devices for long-term evolution, or LTE, high-speed data services by the end of the year.

Qualcomm and Marvell Technology Group Ltd are the sole providers of the five-mode LTE chips that can connect to more networks and are in phones currently on sale.

However, Qualcomm, whose chips and technology are key components in Apple Inc’s iPhone and Samsung Electronics Co’s Galaxy family, has faced hurdles in China.

The company is largely absent from devices on China Mobile’s network because the state-owned carrier adopted a related system it said was developed locally.

In November last year, Qualcomm said that China’s National Development and Reform Commission had begun an investigation related to an anti-monopoly law.

The upgrade will also test the ability of MediaTek Inc (聯發科) and others to fend off competition from Qualcomm, which introduced the faster chips more than two years ago and had 100 percent of the market for LTE chips with integrated processors last year.

That helped the US company grab 64 percent of the total US$18.9 billion market last year, market researcher Strategy Analytics said.

MediaTek was its closest rival with 12 percent.

MediaTek, based in Hsinchu, had about 35 percent to 40 percent of the total smartphone chip market in China last year, neck-and-neck with Qualcomm, MediaTek chief financial officer David Ku (顧大為) said.

While Qualcomm has taken the early lead in LTE chips, the Taiwanese firm’s current one-to-two quarter lag is better than the seven-to-eight quarter gap it had when third-generation wireless technology rolled out, Ku said.

MediaTek anticipates that 80 percent of the 10 million to 15 million LTE chips it expects to sell this year will be sold in China.

With a target of 300 million smartphone chips for all technologies this year, China Mobile’s focus on five-mode devices will have little impact on MediaTek’s full-year sales, Ku said.

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