China Mobile will procure more than 10 million TD-SCDMA handsets, of which a large portion will be smartphones, with a minimum procurement volume of 500,000 handsets for a single model, according to industry sources. China Mobile will announce suppliers in the second quarter, with large shipments slated for the second half of 2011, the sources indicated.
China Mobile had previously placed more emphasis on low-end smartphones since international handset vendors lacked higher end devices supporting the TD-SCDMA platform. Smartphones represent less than 20% of China Mobile's revenues versus 40% for China Unicom and more than 20% for China Telecom, according to the sources.
Since China Mobile plans to procure higher-end TD-SCDMA handsets this time, both international and China-based vendors will see orders, unlike last round of procurement when China-based companies dominated the mainstream segment.
For flagship and dual-card/dual-standby devices, Samsung Electronics and Coolpad have the best chance of winning China Mobile orders, Taiwan handset makers indicated. As for medium-to-entry-level smartphones, China-based vendors such as Huawei, ZTE and Lenovo have the strongest positions.
Both Taiwan's HTC and Asustek Computer have already formed strategic alliances with China Mobile, the makers said, adding that the two companies should receive orders as long as their pricing and specifications match the procurement criteria.
Though orders from China Mobile could guarantee volume, handset vendors could take a hit in profit margin to win the open bid, the sources said. Furthermore, judging by China Mobile's orders in the past, volume is typically lower than released figures.