Possible Benefits
China Mobile reportedly requested that local smartphone manufactures expand the scope of their 4G network support in line with its 4G adoption. The new policy is likely to impose a big burden for entry-level and mid-range smartphone makers in the country, whereas it is expected to work to Korean handset makers’ advantage, stemming from their focus on premium products.
According to industry sources and overseas media outlets on March 23, the world’s largest mobile carrier asked Chinese LTE smartphone suppliers to support five-mode standards such as TD-LTE, FDD-LTE, TD-SCDMA, GSM, and WCDMA from June, which is an upward readjustment in China Mobile’s standards suggested at the end of last year.
In response, mid to low-end smartphone manufacturers say that they are perplexed, and that they need a grace period. So far, most of them have supported only two or three network modes, including TD-SCDMA led by China Mobile. To provide additional support for FDD-LTE and WCDMA, a rise in costs for producing smartphones is unavoidable, since handsets need to be improved with built-in Qualcomm chipsets instead of locally-made low-priced chips.
In contrast, Samsung, LG, Apple, Huawei, and ZTE are not likely to be affected by China Mobile’s decision, because they have already supplied advanced smartphones to the Chinese market that support the five-mode standards. Some in the industry think that in the event of a rise in prices for existing low-priced smartphones, Korean mobile phone manufacturers may benefit greatly, owing to the possibility that the demand for their products will increase. But Qualcomm is widely regarded as the biggest beneficiary.