News and Research on China Techfaith Wireless Communication Technology Ltd. (CNTF)
Business Description
China Techfaith Wireless Communication Technology Limited operates as a handset design and software solutions provider in the People’s Republic of China and internationally.
The company provides handset design services spanning the entire handset design cycle, which involves industrial design, hardware design, component selection and sourcing, prototype testing, pilot production and production support.
The company designs mobile handsets based on various technology platforms, including GSM/GPRS, CDMA1X, CDMA EVDO, WCDMA/UMTS, HSDPA, and TD-SCDMA, it launched its first third-generation (3G) handset based on the WCDMA technology platform in Italy.
In March 2006, QUALCOMM and the company entered into a joint venture by incorporating a Cayman Islands holding company named TechFaith Software (China) Holding Limited, of which QUALCOMM and it holds 30% and 70%, respectively. In June 2006, this company formed TechFaith Software (China) Limited in China.
Business Units
The company's operates in three business units: handset design, sales of products and components, and wireless software and applications. Products and components sold by the company include feature phones, wireless modules and data cards, and smart phones that are in ODM model.
PRODUCTS AND SERVICES
Mobile Handset Design Services
The company provides three types of mobile handset design services to its customers.
Mobile Handset Design Services Based on Existing Platforms: The company designs a new model of mobile handset based on its existing design platform.
Successor Model Design Services: The company designs a successor model of an existing customer’s mobile handset previously designed by it to incorporate additional functions and/or industrial design.
Mobile Handset Design Services Based on New Platforms: The company designs a new model of mobile handset based on a new design platform specified by the customer.
Wireless Software and Application
The company has acquired the ability to design software solutions across a range of wireless communication platforms. The company's software solutions include man-machine interface (MMI) and user interface (UI) software packages supporting a range of wireless communication platforms, and wireless application software, such as WAP, Java, MMS, Web browser, SyncML and DRM.
In June 2006, QUALCOMM and the company, through a 30%-70% joint venture holding company, formed TechSoft in China to develop and offer software applications for wireless communication devices.
Sales of products and components
Products and components sold by the company include feature phones, wireless modules and data cards, and smart phones that are in ODM model. The company provides four types of products and components to its customers:
Wireless modules and data cards: The company’s wireless product lines include wireless modules and data cards for wireless connections. Wireless modules are devices that enable data communication through a cellular network to be used in various applications, such as global positioning systems, logistics management, wireless point-of-sale systems, traffic navigation systems and wireless security systems. The company’s wireless modules consist of baseband and RF, the two hardware building blocks of a generic mobile handset. By adding a housing, the company also provided data cards. The data cards the company provided are in three forms, namely, PC cards, USB cards and express cards.
Other Products and Services: The company started feature phone business in the fourth quarter of 2006. The company did not manufacture feature phones, but outsourced the manufacturing to EMS providers. The company designed and sells smart phone handsets. The company also sells PCBs and other electronic components. The company has historically sold to its Chinese customers printed circuit boards (PCBs).
Subsidiaries
The company conducts all of its operations through its subsidiaries including - Techfaith Wireless Communication Technology (Beijing) Limited; Techfaith Wireless Communication Technology (Beijing) Limited II; Techfaith Wireless Communication Technology (Shanghai) Limited; STEP Technologies (Beijing) Co., Ltd.; Techfaith Intelligent Handset Technology (Beijing) Limited; and TechFaith Software (China) Limited.
Markets
The company conducts its operations primarily in China. The company’s target markets include Japan, Europe and the United States. The company also maintains sales and marketing staff in Beijing, Shanghai and Shenzhen.
Customers
The company provides mobile handset design services to mobile handset brand owners. As of December 31, 2006, the company’s customers included - Chinese mobile handset brand owners, such as CEC Telecom, Haier, Huawei, Lenovo, Yulong, Amoi; and international mobile handset brand owners, such as Kyocera, NEC, UTStarcom, Toshiba, LG, Freescale, and Philips.
Competition
The company faces competition from other independent mobile handset design houses in China, including Cellon, and E28. The company competitors also include ODMs, such as Arima Communications, BenQ and Compal Communications.
Significant Events
In March 2007, the company signed an agreement with one-stop component providers in China for handset manufacturers to form a joint venture to provide one-stop ODM services to global handset customers. It is intended that the joint venture, with 69%-owned by an independent third party joint venture partner and 31%-owned by it, would set up two wholly owned PRC subsidiaries located in Beijing and Shanghai. In March 2007, the company also formed a wholly owned PRC subsidiary, Techfaith Wireless Communication Technology (Shenyang) Limited, in Shenyang, China.
History
China Techfaith Wireless Communication Technology Limited was founded in 2002.
