Qualcomm, China Firm Start Mobile Software Co.

Qualcomm has partnered with TechFaith Wireless Communication Technology to jointly invest US$35 million in a new wireless application software company in China, the companies announced Wednesday.

The new company, TechFaith Software China (TechSoft), will initially develop applications and services for 3G CDMA (Code Division Multiple Access) handsets. TechSoft will operate independently and have offices in Beijing and Hangzhou, China, Qualcomm said.

TechFaith Wireless itself is a company that Qualcomm previously invested in as part of its broader strategy to invest in Chinese companies developing CDMA-based products, Qualcomm said.

As part of the announcement of TechSoft, Qualcomm reiterated its commitment to advancing CDMA around the world and highlighted the substantial opportunity for the wireless industry in China.

China has developed its own 3G technology, TD-SCDMA (Time Division Synchronous Code Division Multiple Access), in an effort to support a homegrown wireless standard that doesn’t heavily rely on royalty payments to foreign companies. Qualcomm asserts that it owns essential patents for TD-SCDMA, but Chinese companies have yet to sign licensing agreements with Qualcomm for its use.

The development of TD-SCDMA has included a number of reportedly unsuccessful trials, and its problems have been blamed for the delay in issuing 3G licenses in China. Licenses aren’t now expected to be offered until later this year, after TD-SCDMA trials conclude. Operators will be able to decide to use W-CDMA (Wideband Code Division Multiple Access) or CDMA2000 technologies, for which Qualcomm earns substantial royalty payments.

Earlier this year, China’s Ministry of Information Industry said China had almost 400 million mobile subscribers.

-Nancy Gohring, IDG News Service

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