TAIPEI, Taiwan (AP) — Taiwan’s High Tech Computer (HTC) signed a memorandum Monday with China Mobile, the world’s largest mobile carrier, to jointly develop smartphones and tap the mainland’s rapidly growing telecoms market.
Wang Jianzhou, China Mobile’s chairman, said the Chinese carrier will invest 47 million yuan ($6.9 million) in the joint project and expects to develop at least seven models by 2010.
HTC will design and develop the models, while China Mobile will provide customer service and support, Wang said.
State-owned China Mobile has called its smartphones OPhone, an apparent attempt to compete with Apple’s hugely popular iPhone.
China Mobile has for years purchased cell phones made by HTC to run with its second-generation network, and the new models will be for the 3G network, Wang said.
China is the world’s most populous mobile phone market while Taiwan is a leading supplier of computers and semiconductors. China Mobile has tapped into the nascent 3G phone market using the homegrown TD-SCDMA standard.
The cooperation might benefit both sides, given China’s vast market. But China Mobile must keep its smartphone prices down in order to attract more 3G users and that would cut into HTC’s profit margin, said Vincent Chen, an analyst with Taiwan’s Yuanta Core Pacific Securities Inc.
“China Mobile is apparently executing the mainland government’s Taiwan friendly policy, but the real benefits to Taiwan remain to be seen,” Chen said.
Wang said he would seek closer cooperation with other Taiwanese makers, including MediaTek, a leading chipset designer, and will also buy laptops and e-books from Taiwan.
Wang arrived in Taiwan on Friday for a nine-day visit amid a thaw in relations of the longtime foes, which split amid civil war in 1949.
The two sides have cemented closer business ties since Ma Ying-jeou became Taiwan’s president 15 months ago. Seeking greater engagement with China, Ma has relaxed control on two-way investment and ended a ban on direct air and shipping links.
In April, China Mobile agreed to buy 12 percent of Taiwan’s Far EasTone Telecommunications Co. for 17.8 billion New Taiwan dollars ($529 million), but the deal has yet to receive approval from the Taiwanese government.