Xiaomi to invest in 4G chip making solutions

Xiaomi is planning to form a joint venture with a 4G chip maker in China, say sources

Chinese smartphone maker Xiaomi and China-based IC design company Leadcore Technology have come together and formed a joint venture to develop 4G chip solutions according to sources familiar with Digitimes.

According to the sources in the Taiwan handset supply chain, Xiaomi will hold a 51% stake in the joint venture whereas Leadcore Technology will have a 49% stake. Leadcore Technology is a subsidiary of Datang Telecom, a leading Chinese telecom company. It is being said that the main idea behind the joint venture is for Xiaomi to be able to save cost on 4G chips, which will enable it to launch competitively priced 4G smartphones.

So far Xiaomi has been using system on chips by manufacturers such as Qualcomm, MediaTek and Spreadtrum Communications. This joint venture, say sources, will most likely affect sales of Spreadtrums shipments to Xiaomi.

Xiaomi recently came out as no.3 in terms of global shipments of phones for Q3, 2014, before the Lenovo - Motorola acquisition closed (a day later). It has managed to sell 17.3 million handsets, thereby being the only company to have jumped up by 200 per cent in terms of year-on-year shipment numbers. With an affordable 4G handset, Xiaomi may just push those numbers further in the next round up. Looking at the response to their flash sales in India, its popularity is unquestioned here.

With 4G circles already present in India and many more expected to come out next year, the time is ripe to woo customers with 4G handsets. Although there are a lot of 4G handsets around, if Xiaomi is indeed going ahead with its joint venture, an affordable 4G handset from it will certainly have many buyers here.

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