HTC forges deal with China Mobile for TD handsets, but ZTE set to remain on top in 3G handset market

This week, Taiwanese handset manufacturer HTC signed a deal with China Mobile to supply TD-SCDMA handsets for the leading Chinese carrier, according to FT.com. More precisely, HTC will supply one TD-SCDMA device this year and five next year. Both companies also agreed to collaborate together on future deployments (e.g. TD-LTE handsets, market research). Of note, China Mobile plans to roll out 100 new 3G devices by the end of 2009.

Bottom line: This is a pretty big win for HTC on its quest to become a major player in the Chinese market. Of note, China Mobile recently announced that the number of TD-SCDMA subscribers increased by 129,000 to 1.088 million in July. This deal is set to become a driving force for HTC, which expects to double its 3G handset sales in China in 2009.

Competition in the 3G handset market is set to intensify in the coming months, with China Mobile scheduled to introduce Dell Ophone, and China Unicom scheduled to introduce Apple iPhone 3G S in the fall. That said, in the coming quarters, we expect ZTE to sustain its lead in the Chinese 3G market based on its current momentum and strong relationship with the leading Chinese carriers. Of note, several reports indicate that ZTE currently captures 25% of the Chinese 3G market (versus Samsung at ~10%).

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Julien Blin is the CEO & Principal Analyst at JBB Research (www.jbbresearch.com), a research and consulting company focusing on the wireless space. He is an experienced former IDC Wireless Analyst. He is frequently quoted by leading and newswires like The New York Times, WSJ.com, Business Week, etc. He specializes in 3G/4G mobile apps/services, network technologies (e.g. LTE, WiMAX), the U.S, Europe, and emerging markets (e.g. Africa, Middle East, South America, and China).

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