spreadtrum.gifFinland's Hantro, which makes video technology for handsets, has struck a deal
with Nasdaq-listed Vimicro, one of China's fabless chip companies, to
develop chips for mobile phones based on China's home-grown audio video
coding (AVS) standard.

The news follows the recent announcement China's Ministry of Information Industry that it would provide funding for Spreadtrum Communications, another Chinese fabless chipmaker, to develop its own AVS chip.

China has emerged as one of the favourite markets for offering TV
and video content on mobile handsets, and various trials are underway.

The country's first trade conference
on this topic was recently held in Shanghai and it attracted numerous
operators, broadcasters and content owners, who all see juicy
opportunities to raise new streams of income using mobile TV.

But as well as obvious question about whether Chinese consumers will
pay for such services, there are formidable technical challenges in
running mobile TV services on a commercial basis.

This has led to the development of new standards aimed at adapting
conventional broadcast-quality video and audio signals to the much
smaller screens and limited bandwidth of mobile devices. In Europe,
there is the DVB-H standard which Nokia has been trialing for some
years and is now attracting interest from operators.

For example, mobile operator 3 Ireland plans to start trial broadcast TV services in Ireland for mobile handsets using DVB-H technology.

I've seen DVB-H demonstrated and its pretty good, although I remain
to be convinced that many Europeans will pay to watch TV on their
mobile phone.

Despite its advantages, Frost & Sullivan says competition
for DVB-H could rise from South Korea's Digital Media Broadcasting
system, which uses satellite and/or terrestrial antennas to transmit
the content. By March 2006 over 500,000 mobile phones in South Korea
were capable of receiving the DMB service.

There's also the DAB standard, which BT is using in the UK and for which China's ZTE has supplied the handset — more in this Register article. Meanwhile, Qualcomm of the US has developed its rival MediaFLO system.

Given the number of alternatives already out there, most experts see
no good technical reason why China should develop a new standard. . But
standards in China have an over-reaching political dimension which
firms ignore at their peril.

The state body that oversees China's broadcasters is recommending
they use a new proprietary standard for mobile TV, called China Mobile
Multimedia Broadcasting. However, several other standards are also
being trialed in China — see this story for more.

The AVS standard is a more fundamental “codec” technology that
controls how audio and video signals are converted into digital format.

As with TD-SCDMA, China's rival 3G standard, AVS was conceived
principally to enable Chinese manufacturers to avoid paying royalties
to foreign companies, who have patented some of the technologies in the
existing codecs like MPEG2 and H.264.

But each new codec creates more complication for hardware
manufacturers, as new standards rarely supersede older ones and often
have to co-exist.That's no problem if its media player for a browser,
but its quite a different matter for a mobile phone because of its
limited size, power and processing capabilities.


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