With the continuing growth in our smartphone chipsets and modem business, we have firmly established our leadership position in TD-SCDMA smartphone market. Our best-in-class modems are designed into top-of-line handsets and our smartphone chipsets are in neighboring 1 Ghz devices at a price of as we low as RMB500.
With this innovation at the low end, we're now seeing consumer preferences shifting rapidly from 3G feature phones to low-cost smartphones. As a result, in the short term of our strong growth in the smartphone segments will occur in tandem with lower shipments on TD feature phones. However, we expect that smartphone units, which carry higher margin and ASP, to continue to grow rapidly in the coming quarters and more than offset this near-term market transition.
Recently, China Mobile has taken steps to speed up TD-SCDMA handset sales in the second half of this year. At a recent conference, China Mobile discussed a plan or plans to increase their investment in TD-SCDMA. In addition, they also encouraged handset makers to sell their TD-SCDMA product through open market with China Mobile providing support with the quality monitoring.
With the China Mobile's handset replacement market now approaching 100 million units per year, this shift in distribution model will make the TD-SCDMA devices even more broadly available and help speed up the 3G adoption in China.Now, turning briefly to our 2.5G business. Our 40nm baseband and the SC6530 have been well-received by the consumers, by the customers, and it's ramping up nicely. We are now continuing to increase our volumes, in particular in midrange of the market, and expect this trend to continue in the coming quarters. In the next few months we will be introducing our 2.5G products with integrated connectivity. We believe this shift delivers a superior performance and quality at a competitive price. This shift also will help address pricing pressure in the coming quarters. I'd now like to turn the call to Shannon, our CFO, who will give you a more in-depth look of our financial results this quarter. Shannon? Read the rest of this transcript for free on seekingalpha.com
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV