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China Mobile pursues its own cellphone software platform

By CAROLINE GABRIEL

Published: 1 December, 2008

READ MORE: China Mobile

You might think Chinese firms would have learned their lesson about semi-proprietary technologies. China Mobile, the largest cellco in the country, has been vocal in complaining about being stuck with the homegrown 3G standard, TD-SCDMA, and is in a rush to migrate to LTE to make up for its shortcomings. But the operator is now looking to increase its influence over the handset business by creating its own semi-proprietary cellphone software platform.

This will be based on Google Android, say insiders, but will feature significant enhancements that China Mobile hopes will, in the first phase, give it tight control over the development agendas of its handset suppliers; and in the second phase, enable it to influence global mobile internet standards. This has usually been the double-edged objective in China's pursuit of its own versions of standards from Wi-Fi security to 3G. In some cases, its market weight has brought some success, notably in mobile TV (and its implementation of LTE is likely to be the basis of the international TDD version of the platform). But more often, as in 3G, it has left it isolated from the innovations and scale of the global base.


China Mobile was reported to be angry that the complexities of adjusting Android for individual operators' needs had pushed back its launch of a phone based on the Google platform until 2009, behind T-Mobile. Now it seems that delay was largely because it has been working on a more ambitious project to create its own de facto standard, working with the search giant and Chinese electronics firm Lenovo. This could sideline Nokia, which has taken a lead in creating TD-SCDMA phones for China Mobile's new networks, but is not supporting Android.

China Mobile will launch its first handset based on its platform, called Ophone, in the second quarter of 2009. Another early partner is likely to be HTC, which made the T-Mobile Android G1 and is well used to working to operators' specifications. This situation shows China Mobile trying to gain the upper hand in its relations with phonemakers, working on the Japanese model. It is unclear how far it will use its own brand and how far Google will succeed, as it has with G1, in imposing its own branding and tight integration of its web services.

Meanwhile, growth in mobile uptake in China has slowed dramatically. China registered 3.22m new mobile subscribers in October, far less than the average monthly increase of 8.5m recorded in the first nine months to September, the Ministry of Industry and Information Technology (MIIT) said. By the end of last month, China had more than 627.26m users. The main reason was not slowdown but the recent reorganization of the operators and their network transition processes. China Telecom also has a new way of collecting subscriber figures on the CDMA network it gained from China Unicom in the restructuring.

Chinese vendor Huawei forecast that revenues at its handset business will increase by 74% year-on-year to reach $4bn on the back of growth in emerging markets, including its home territory. Huawei expects to double its shipments of cellphones this year to 80m units. The company cancelled the sale of a stake in the business unit earlier this year because of market downturn and is now going it alone.

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