February 28, 2002, 10:04 AM — In a move that underscores the growing importance of China's telecommunication market, some of the biggest names in mobile-handset technology -- including Texas Instruments Inc., Nokia Corp. and LG Electronics Inc. -- will today announce the creation of a Shanghai-based design company, Commit Inc., that will focus on the development of multimedia handsets for 3G (third-generation) mobile networks.
In total, 17 companies -- including TI, Nokia, LG Electronics, China Putian Information Industry Corp., and China Academy of Telecommunications Technology (CATT) -- have lined up to invest 234 million renminbi (US$28 million) in Commit, according to a source familiar with the situation.
Commit will offer a range of engineering capabilities, from developing reference designs for handsets to application software development and IC (integrated circuit) design.
Despite being based in Shanghai, Commit has a strong Taiwanese connection. The company has received indirect financial backing from three of Taiwan's largest handset makers, which have invested in Commit through intermediary companies, the source confirmed. The identity of the Taiwanese companies was not disclosed.
The involvement of Taiwanese investors in China-based design projects is a politically sensitive issue in Taiwan, especially in areas such as 3G technology which are viewed as important for the future of the island's high-tech industry. With much of Taiwan's IT hardware manufacturing base moving to China in search of lower costs, the Taiwanese government has hoped local companies would continue to invest in design operations based here.
Commit initially plans to develop handsets for use with 3G services based on TD-SCDMA (Time Division Synchronous Code Division Multiple Access). Down the road, the company may also expand its focus to include 3G handsets for networks based on W-CDMA (Wideband CDMA) and CDMA2000.
Developed in China by Chinese and foreign telecommunication equipment makers, TD-SCDMA has been adopted as the standard for China's first 3G trials, which began last October. Chinese operators are expected to begin rolling out commercial TD-SCDMA services by the middle of this year, with the number of 3G subscribers expected to reach into the hundreds of thousands by the end of the year.
Despite investment by TI and Nokia, Commit-designed handsets won't be restricted to a single hardware or software platform, the source said. The company is free to develop handsets based on chips other than TI's OMAP (Open Multimedia Applications Platform) processor, opening the door to the future development of devices based on processors from other companies, such as Intel Corp., and smartphone software from Microsoft Corp.