China-based vendors prefer TD-SCDMA, CDMA to WCDMA due to cost concerns

China-based 3G handset vendors have generally offered more TD-SCDMA and CDMA2000 products than WCDMA in the China market, according to industry sources in Taiwan.

This is because development of WCDMA models entails high patent licensing fees, which amout to 20-25% of production costs, while rates are lower than 10% for CDMA 2000 and even less for the home-grown TD-SCDMA standard.

Since China-based handset vendors are not actively promoting WCDMA models, international brand vendors have then dominated the segment in China, with Nokia, Samsung Electronics and Sony Ericsson taking up a combined 75% share, the sources said.

Local vendors in China now account for a 50% share of the TD-SCDMA segment, and other vendors such as Yulong Computer Technology, Huawei Technologies and ZTE are the major suppliers of entry-level to mid-range CDMA2000 EV-DO models, the sources noted.