Opinion | Qualcomm charges China Mobile TD

Qualcomm's roll-out and the rapid adoption of new mobile phone chips based on TD technology should give China Mobile's 3G and 4G networks a big boost in 2013.

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Published: 11:00am, 19 Dec 2012

This may look like something only a techie can appreciate, but the recent start of production by leading global chipmaker Qualcomm (Nasdaq: QCOM) for cellphone chips using a homegrown Chinese technology looks set to provide a major boost to dominant Chinese telco China Mobile (0941.HK; NYSE: CHL).

This latest development comes as big and important news for TD, the homegrown technology being used by China Mobile in its 3G and 4G networks.

The fact that TD is a new technology that is mostly limited to China has led most big global mobile phone makers to put only limited resources into new product development for the standard. As a result, only a few high quality TD smartphones and other products are now in the market, and the sector instead is dominated by mostly smaller niche players, limiting the appeal of China Mobile's 3G network.

Apple (Nasdaq: AAPL) has indicated in the past it would like to make a TD-based version of its popular iPhone, but has refrained up until now due to a lack of availability of a high-quality, high-performance chip for the product. Now that I've given all that background, let's get to the latest news, which has media reporting that Qualcomm's TD chips have finally entered the market, fulfiling the company's most recent pledge to roll out the product by year-end.

According to the reports, 40 per cent of models selected by China Mobile in its latest tender for TD handsets were powered by the new Qualcomm chips – a huge market share for a product that was only recently introduced. The reports say that among the 30 handsets chosen by China Mobile in the recent tender, 12 used Qualcomm chips as their core processors. The remaining orders went to models powered by chips from other smaller developers like Sequans, Spreadtrum (Nasdaq: SPRD) and Marvell (Nasdaq: MRVL).

Qualcomm rose to prominence as one of the world's top mobile phone chip makers, and has seen its business soar as smartphones quickly muscle their way into a space once dominated by more traditional desktop and laptop computers. Reflecting that fact, Qualcomm recently overtook traditional PC chip leader Intel (Nasdaq: INTC) in market capitalisation to become the world's largest chipmaker.