Quasar Communications Technology Holdings, due to list on the Growth Enterprise Market (GEM) this week, has already begun to diversify from its core mobile phone software business. The custom software and integration house plans to start trading of its stock tomorrow, after placing 103.6 million shares worth HK$67.3 million. The company's 'smart' phones designs, which have camera and hand-held computer capabilities, are still in development and may be several years from being produced. However, a prototype device that allows digital camera owners to link their cameras to printers without a computer in the middle has already been finished for a Japanese manufacturer that ordered the design, according to Ra Chang-ju, chairman and chief executive officer of Quasar. 'Our client is one of the leading digital camera manufacturers in Japan,' Mr Ra said, although he declined to name the company. The client first asked for a set-top box that could support connection to a printer, and Quasar used its software for mobile phones with personal digital assistant (PDA) functions in order to build the product. Future versions would eventually have the ability to connect to code division multiple access (CDMA) mobile phone networks, said Mr Ra. Other devices under development include a PDA phone running on the Windows CE operating system and a video telephone running on embedded Linux. On the CDMA mobile phone front, Quasar first entered the mainland market in late 1999, in hopes that China would move quickly in building out its network. Instead, plans were delayed until late last year, and CDMA subscribers now number about one million, compared with 170 million using the rival global system for mobile (GSM) technology. Still, Quasar is pinning much hope on the build-out of CDMA networks and the addition of CDMA2000 1x equipment to these networks. The 1x upgrade boosts network speed and allows for faster data flow - up to 1.2 megabits per second downstream and 384 kilobits per second upstream, according to the Quasar prospectus - making it possible for operator China Unicom to launch data-intensive applications such as e-mail and video downloads. Quasar's prospectus notes the company is in negotiations with an unnamed mainland mobile phone company to enter a joint venture to produce 1x equipment. It also mentions plans for production of 1x handsets at South Korean plants in the fourth quarter this year. Mr Ra said he expected the company to begin working on yet another network upgrade to CDMA called EVDO, which would support more multimedia functions. So far the take-up of CDMA services in the mainland has not been as fast as some observers had hoped, and the success of Quasar's plans for the mainland's CDMA market will very much depend on China Unicom upgrading its networks at a steady and predictable pace. Up to now, Quasar's income has come from selling software designs for use in mobile phones - using GSM, CDMA or general packet radio service (GPRS) technology - and from taking a percentage of hardware sourced from places such as Korea, one of the most aggressive countries in the world in terms of deploying CDMA networks. Turnover was HK$308.3 million last year and about HK$2 billion in the first five months of this year. Quasar expects to net about HK$45.1 million from the listing on GEM, and plans to use the funds to set up sales offices in Beijing, Singapore and the United States, in addition to recruiting more of its own technical staff in Shenzhen, Shanghai and Seoul.
