LONDON — Chinese mobile phone manufacturer TCL has announced a major restructuring of its venture with Alcatel and, separately, a licensing agreement with Picsel to incorporate the latter’s image editing software into its latest handsets.

TCL plans to transfer R&D from France to China in an attempt to save costs. The group, which acquired a majority stake in Alcatel’s troubled handset business earlier this year, will also merge the joint venture into its so far separate handsets business, TCL Mobile Communications Co Ltd.

The original aim was to keep the two operations separate for up to three years, but the Chinese group said it needed to act quicker in an attempt to reduce expenses and keep up with its competitors as regards new technologies.

According to a report in the Financial Times the chairman of TCL, Li Dongsheng, said at the IFA consumer electronics fair taking place this week the shift was necessary to stem losses at the joint venture with Alcatel.

“The mobile business is my biggest headache right now. The TCL-Alcatel operation did not meet our targets,” the paper quoted Mr Li saying. “Global price competition is very intense and our cost structure is not low enough to meet it. Also our new product introduction and development is not as fast as we expected. That is why we made a big loss,” said Li.

The deal with Glasgow, Scotland-based Picsel Technologies will allow TCL Mobile Communications to incorporate the Picsel File Viewer application in a range of smartphones being developed by China’s second largest mobile phone maker. The application enables documents to be viewed on the small screen. Delivering full and seamless support for Microsoft Office (Word, Excel and Power Point), Adobe PDF, HTML, mHTML and images, the functionality is delivered through a novel intuitive user interface that actively encourages the user to download and interact with more content on smaller screens.

Kailong Wang, the CTO of TCL Mobile Communication said: "Smartphones are increasingly being relied upon to handle tasks previously only possible through PCs, laptops and high end PDAs. Picsel is the obvious partner for us, thanks to its File Viewer application, which will enable a truly mobile PC experience on our handsets."

Picsel’s software is already licensed to leading handset makers, including Motorola, Samsung, Sharp, NTT DoCoMo, Panasonic, Sony, and BenQ.