While some commentators are scratching their heads over Tsinghua University’s unsolicited $1.3bn buyout offer of smartphone chipset manufacturer Spreadtrum Communications, it really shouldn’t come as a surprise that the institution wants in on the smartphone market. The technology behind the smartphone would even have Captain Jean Luc Picard ditching his tricorder, but what’s more astonishing is the ravenous rate at which the smartphone has spread. In the US, the smartphone has gone from consumer availability to a 50% market penetration within 10 years, the fastest uptake of any technology in the history of the States. Perhaps more relevant to Tsinghua, China has over a billion mobile customers and over 300 million of those are 3G subscribers, outstretching the US’ 208 million, thusly presenting itself as the primary target for smartphone manufacturers and the largest mobile subscriber market in the world. Chinese smartphone manufacturers themselves are on the up, now representing 29% of the global smartphone market compared to 13.2% from last year, gobbling up a bigger chunk of the rapidly growing sector. By 2017, it is estimated that 95% of mobile shipments in China will be smartphones and account for a worldwide share of 73% of all mobile shipments, equating to 1.5bn smartphones, according to market analyst Canalys. Furthermore, Spreadtrum has shifted from manufacturing chipsets for the global standard GSM handsets, and is now focusing on the Chinese 3G standard, TD-SCDMA, which has been developed to reduce dependency (and patent costs) on Western technology. The Shanghai-based firm’s customers accounted for 50% of TD-SCDMA handsets sold in early trials of the Chinese-tech smartphones, indicating a solid market share as the chipsets spread in the East, and its shipments could grow by 300% this year as the firm looks to dominate the low-end of the Chinese market. As a kicker, Spreadtrum will be releasing W-CDMA chips later this year, which an estimated 1bn devices will be using by 2015. So while $1.3bn might seem like a big amount a university to be putting on the table, should the deal go through, Tsinghua will be paying a little over a dollar for each potential Chinese customer with all roads pointing towards a big return on the investment for the institution. While this might be seen as a bargain for Tsinghua, the Chinese state-backed institution could also open the door to Spreadtrum to take advantage of benefits and subsidies in its primary market target of China, giving it a competitive edge. Sweetening the deal…

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