HTC, China Mobile in smartphone deal

       Taiwan's High Tech Computer Corp signed a memorandum yesterday with China Mobile Ltd, 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 would invest 47 million yuan ($6.9 million) in the joint project and expects to develop at least seven models by 2010.
       HTC, as the Taiwanese company is known, will design and develop the models, while China Mobile will provide customer service and support, according to Wang.
       State-owned China Mobile has called its smartphones OPhone, an apparent attempt to compete with Apple Inc'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 cutting-edge third generation 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 home-grown TD-SCDMA standard.
       The co-operation 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 Inc, a leading chipset designer, and will also buy laptops and e-books from Taiwan.
       Wang arrived 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% of Taiwan's Far EasTone Telecommunications Co for NT$17.8 billion (US$529 million), but the deal has yet to receive approval from the Taiwanese government.