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December 16, 2015

Hello China, Welcome Back CDMA; It's About Time

The announcement was pretty straightforward

“Qualcomm Incorporated (NASDAQ: QCOM) and Xiaomi, a leading Chinese smartphone and Internet company, today announced that they have entered into  a new 3G and 4G China patent license agreement. Under the terms of the agreement, Qualcomm has granted Xiaomi a royalty-bearing patent license to develop, manufacture and sell 3G (WCDMA and CDMA2000) and 4G, including 3-mode (LTE-TDD, TD-SCDMA and GSM), complete devices. The royalties payable by Xiaomi are consistent with the terms of the rectification plan submitted by Qualcomm to China’s National Reform and Development Commission.”

Then came the quotes from the execs and off it went.

What was missing was impact, but I find two points that were ‘impactful’, if that’s the word. One was the licensing agreement, which meant the chips being made were not Qualcomm’s. The second was frequency; not the LTE format, but the time involved.

Now personally, I like time as being the divider, but the story is here that TD-SCDMA is a Chinese standard. 

The export of Chinese standards is going to happen eventually. Xiaomi is a great choice for exporting standards to many of the existing strategies in the market. At the present time Xiaomi has “more than 61 million handsets sold in 2014, and products launched in Taiwan, Hong Kong, Singapore, Malaysia, Philippines, India, Indonesia and Brazil,” the company has helpfully pointed out.

The result is that TDD is being deployed and some of these locations are going to show the advantage of the time as a way to manage crowded spectrum. For example, this may show up in unlicensed LTE and Wi-Fi friendly frequencies like 3.5 and 5 GHZ.  

I am not saying that FDD is going away or that we are going to have a standards war. What is going to happen is simple. We are going to see carriers compelled to convert either because they are going to find working with Chinese standards are cheaper, or they are going to see advantages in the managing of spectrum. 

I am convinced this is going to happen; it’s just a matter of time.

Edited by Rory J. Thompson

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