TD TERMINALS HEAD FOR C0MMERCIALIZED USE IN CHINA.

CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on China's TD terminals, and their sprint towards commercialized use.

In the TD-SCDMA industry, TD terminals are now directly facing consumers, as well as directly effecting consumers' feelings towards 3G. As one of the most important factors in the industry, TD terminals have dual characters: first, they provide elementary communications functions; and second, they become a kind of consumer electronics product that integrates digital cameras, audio players, video players, network browsers and PDAs. It presents 3G business.

CCID Consulting has therefore paid close attention to the development of TD terminals and herein reviews China's TD terminal in 2007Q3.

The Number of Potential Users is Great

By the end of Sep. 2007, the number of China's mobile phone users reached over 526 million. Currently, the number of China's high-end mobile phone users has reached 50 million.

MediaTec Inc. Sets Foot in the TD Terminal Industry chain

MediaTec Inc. was actively seeking an opportunity to enter the TD-SCDMA chip industry, and on Sep. 10, 2007 MediaTec Inc. formally entered the TD- SCDMA chip market through the acquisition of ADI's mobile phone chip department.

MediaTec Inc. has a large market share in China's 2G mobile phone market and it accounts for over 40% of the total market share in China's baseband chip market. Besides Bird, TCL, Lenovo, KONKA, Longcheer, SIM and K-Touch, abundant no-brand enterprises enter the mobile phone industry through adopting MediaTec Inc.'s products. MediaTec Inc. is not only the biggest mobile phone chip provider in China, not also the third largest provider in the world. However, most of its shipments come from China's domestic mobile phone brands. The international brands such as Nokia, MOTO, Samsung and Sony Ericsson have not become MediaTec Inc.'s clients. Wireless chips have a bright future. If MediaTec Inc. wants to steady its position; it needs to have international clients. Although ADI's mobile phone chip business is as good as before, it has international partners such as LG and SHARP. MediaTec Inc.'s acquisition will help itself to develop international clients.

Although the cooperation between ADI and Datang Telecom on TD-SCDMA business is not the most important part of the acquisition, it is the focus in the TD industry. As a result of the acquisition, MediaTec Inc. plays a very important role in the development of the TD-SCDMA industry. MediaTec Inc.'s participation could bring positive or negative affects; however, it cannot control TD's course and whether TD can gain great benefits. It is worthy to pay attention to whether TD-SCDMA can change the cooperation mode between MediaTec Inc. and ADI, and whether it can introduce its used turn-key solutions into the TD-SCDMA industry at the appropriate time.

China's Domestic Mobile Phone Manufacturers Have Their Own Advantages in TD Terminal Testing

China Mobile and China Netcom carried through large-scale TD terminal testing in 2007Q3, and the final result of the testing will directly affect the purchase shares of manufacturers.

China's domestic mobile phone brands occupied the majority in this testing, and foreign brands, such as Samsung, played only a small part. As 3G terminals, R&D for TD-SCDMA mobile phones is more difficult than for 2G terminals. Therefore, China's domestic brands are on an equal footing with foreign brands in testing, which also shows the solid strength of domestic brands. With the approach of the commercial use of TD, China's domestic manufacturers face opportunities. China's government supports TD-SCDMA standards and domestic enterprises keep prior positions in aspects of technological patents and R&D. The advantages will gradually incarnate with the maturity of the TD industry. On one hand, domestic manufacturers won't pay great patents to foreign enterprises and the cost of TD terminals will decrease; while on the other hand, domestic manufacturers will receive the support of government policies in the process of TD industrialization. All of these establish favorable bases for the domestic manufacturers in the 3G market, and will help break European, American, Japan and Korean monopolization in the 2G mobile phone market.

Currently, domestic manufacturers occupy definite advantages in the initial stages of TD commercialization, but just how long the advantages will last is unclear. The competitiveness of products will be the key factor. Only through domestic manufacturers insisting on continued improvement of the competitiveness of TD terminal products and holistic strength of enterprises, can they maintain their advantages in the face of competition from foreign magnates.

Testing Manufacturers Prepare for the Dual Mode Terminals

The latest testing result suggests that under the event that TD networks couldn't rapidly cover the whole nation, dual mode phones can at least ensure basic communication functions. Therefore, operators and terminal manufacturers should emphasize particularly on TD/GSM dual mode mobile phones in new rounds of testing.

CCID Consulting considers that in order to ensure the favorable communication quality, manufacturers should possess some dual mode terminals. They can depend on GSM to assure the communication quality when TD signals are not so good. The dual mode terminal will be the mainstream during the initial 3G period.

About CCID Consulting

CCID Consulting Co., Ltd. (hereinafter known as "CCID Consulting" or "CCID"), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is directly affiliated to the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has set up branch offices in Shanghai, Guangzhou, Shenzhen, and Harbin, with over 300 professional consultants and industry experts. The company's business covers over 200 large and medium-sized cities in China. Apart from home market development, CCID Consulting establishes international cooperation links across the United States, the Asia-Pacific region and Europe with agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

Based on four major competitive areas: powerful data channels, industrial resources, intense knowledge and a deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategic planning, IT applications, marketing strategies, human resources and information technology outsourcing. Customers range from industrial IT users, telecommunications companies, energy companies, finance companies, and automobile companies, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to be the number 1 consultant in strategic consulting, the number 1 brand for strategic consultancy, the number 1 advisor for enterprise management and the number 1 consultant for government decision-making.

For more information, visit http://www.ccidconsulting.com or email to liuyan@ccidconsulting.com.