Infineon, Huawei Partner to Push 3G W-CDMA Project
Infineon Technologies of Germany has partnered with Huawei
Technologies to lower the price of 3G chipsets and handsets
based on the W-CDMA standard popular in Europe to the
same as handsets based on the current 2G GSM standard.
The W-CDMA standard promises data-rich services such
as video-conferencing to consumers. However, the first
batch of products from the joint initiative will be focused
primarily on delivering voice services. The new standard
will have to compete with three competing 2G standard
networks already established in China.
Ulrich Schumacher, Infineon CEO, said that he expects
the project to generate 100 million euros in revenues
in the first 18 months after launch.
In August, Huawei
Technologies signed an agreement to partner with Siemens,
also of Germany, to develop products based on China's
locally developed TD-SCDMA standard. In recent years,
China has been anxious to develop and control its own
3G standard for mobile communications.
Huawei's partnership with two competing standards points
to a two-tier strategy of making initial pushes with W-CDMA
and TD-SCDMA products and services, then seeing which
is the winner. The position and policy of the Chinese
government will be crucial in determining who is the winner.
China now has the largest number of mobile phone subscribers
in the world, at 270 million and climbing.
In the past four months, China has suffered from an excess
inventory of 20 million mobile phones, which many believe
was caused by consumers not going out to shop during the
three-month SARS crisis during March, April and May. For
this reason, there have been rumors that the Chinese government
may limit the number of mobile phone makers, by forcing
the smaller players to quit.
While mobile phone sales have shown a drop-off, the Chinese
electronics industry has been largely
unaffected because of strong domestic demand for use
in home electronics and appliances.
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