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Coship to Transfer 3G Technology to Sowill

Dfdaily.com, 12/15/11

In a public filing yesterday, Chinese developer and manufacturer of satellite receivers and cable and terrestrial set-top boxes (STBs) Coship Electronics (002052.SZ) said that it planned to sign a technology transfer agreement with the Sowill Group under which it will transfer key technologies in its TD-SCDMA, WCDMA, and tablet technology solutions, as well as intelligent remote control solutions and Bluetooth module technology solutions, to Sowill for RMB 35 mln. Coship said it would cease its investments in 3G mobile handsets following the transfer.

Though Coship is a manufacturer of television set-top boxes (STBs), Coship chairman Yuan Ming had been interested in the mobile handset industry, and began preparing the company for an entry into the industry in 2009. In 2010, Coship began luring employees away from Shenzhen-based handset maker Yulong Computer Telecommunication, a subsidiary of China Wireless Technologies (2369.HK), with offers of high salaries. Yulong subsequently reported the departing employees to Shenzhen law enforcement authorities, accusing them of stealing company secrets, leading Coship to disband its mobile team before finally resolving the dispute with Yulong through government mediation. Although Coship reassembled a mobile team, it was ultimately unable to act on its plans.

Coship said that its total investment in 3G handset research and development since 2009 amounted to roughly RMB 35 mln.

The Coship filing described buyer Sowill as an investment group with interests in finance, investment management, real estate development, high technology, and the cultural market. Sowill Group subsidiary Shenzhen Sowill Digital Technology is dedicated to R&D, manufacturing, sales, and services for mobile terminals, and holds permits from China's National Development and Reform Commission (NDRC) for GSM/GPRS and CDMA mobile equipment.

Keywords: Sowill divest IPR infringement Yuan Ming Bluetooth computer Yulong handset wireless 3G GPRS GSM NDRC China Wireless Coship R&D TD-SCDMA technology transfer WCDMA 002052.SZ 2369.HK tablet HR

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