China insiders are not surprised when Xiaomi went vertical, designing its own smartphone SoC, as this move has already been foreshadowed two years ago with the arrival at Xiaomi of a team of engineers originally from Leadcore Technology.

The new wrinkle is that Xiaomi’s home-grown custom-designed SoC will drive its soon-to-be-unveiled Mi5C smartphone, according to Alice Sun, formerly an analyst at EE Times China (Shenzhen) and now a founder of EE Insight.

Xiaomi’s new SoC, based on eight ARM A53 cores, is capable of LTE Cat 6, Sun told EE Times.

Good for optics

But why is it important for Xiaomi to design its own SoC for its own smartphones?

The answer is that Xiaomi is under pressure to reclaim a top tier ranking in China’s cut-throat smartphone race. This development serves to improve the company’s optics, although it’s hardly a technological leap forward. EE Insights’ Sun believes it will create more market value for Xiaomi’s brand. “But it’s also important for the future,” she added, as Xiaomi goes vertical.

Apple, Huawei and Samsung all design and use their own SoCs in their smartphones. Other Chinese branded smartphones–including Oppo and Vivo–are sourcing SoCs from Qualcomm or MediaTek. In this context, it’s understandable that Xiaomi feels compelled to use its own design instead of the me-too, off-the-shelf SoCs in rival smartphones.

A few other factors led to Xiaomi’s decision to work with a group of engineers from Leadcore. One is Leadcore’s expertise in telecom technologies. Another is the software-defined radio architecture Leadcore-led team designed for its SoCs.

Leadcore has inherited Datang Telecom’s pedigree, which might prove advantageous to Xiaomi. Founded in 1998 by the China Academy of Telecommunication Technology (CATT), China’s multinational telecom equipment company is best known for its leading role in developing the Chinese TD-SCDMA 3G mobile telecommunications standard through a subsidiary, Datang Mobile.

“The modem technology that’s ready in silicon and patent portfolio created by CATT, including LTE and LTE-A, make us very attractive to Xiaomi,” explained Marshal Cheng, vice president of Leadcore, who spoke with EE Times two years ago during a one-on-one meeting at China’s industry gathering in Shenzhen.

The seed for the company’s big break was planted when Leadcore’s design team made a “bold decision” in 2012 to go for software-defined radio (SDR) based on CEVA’s DSP. The switch to the enhanced architecture was deemed necessary as Leadcore moved its product family to 4G.

Cheng believes that this paid off, getting Xiaomi’s attention and setting the stage for future collaborations.

Citing Leadcore’s software-defined radio platform during the EE Times interview two years ago, Cheng said, “We can keep the same platform to run new mainstream standards like LTE-A and others.” The platform can also be used for non-standard modems, he said. The implication is that the platform will work for LTE-M, including Cat 0, which has the potential to revolutionise wireless IoT.

This article first appeared on EE Times U.S.