Microsoft China and China TechFaith Wireless Communication Technology, one of the largest handset application software and handset solution providers in China, have signed an MoU to promote the use of Windows Mobile and Windows Media technology.

The move follows the announcement, in March, of the formation by TechFaith Wireless of a joint venture company with Qualcomm to focus on the development of application software for wireless devices.? Also, earlier this month Qualcomm and Microsoft announced plans to port the Microsoft Windows Mobile operating system to Qualcomm's Mobile Station Modem (MSM) chipsets.


According to the MoU with Microsoft, the two parties will work closely with each other in technology development and sales and marketing to "improve the user experience and market share of Windows Mobile based devices, while reducing the time to market and lowering development costs".

The strategic partnership covers smartphone and entertainment handset product development, application development, collaborative sales and marketing, and an exchange of talent and technology. It comes at a time when China's domestic handset manufacturers are struggling and losing market share to leading Western brands.

In April, Beijing based research firm Analysys International (no connection with Analysys of Cambridge, UK) reported that the total market share of domestic brands had dropped from 39 percent in the first quarter to 29.77 percent in the fourth quarter. It said that a tight capital market had create a vicious circle, impacting?? R&D, new product investment, sales and after-sale service support, advertising and marketing research expenses.

TechFaith's joint venture with Qualcomm followed its appointment as Qualcomm's first independent handset design house partner in China, in April 2004, after Qualcomm took equity in the company.