Question-and-Answer Session
Operator
(Operator Instructions)
Your first question comes from the line of Mike Walkley from Piper Jaffray. Please proceed. Mr. Walkley, your line is open.
Mike Walkley - Piper Jaffray
Thank you very much. I was wondering if you could give us a little more guidance on your gross margin and operating margin targets for 2007 guidance.
Rong Yu (Translation)
To respond to your question, since it is mostly on the gross margin of those two products for the year 2007, while we believe that the 3G products will not necessarily be lower than 2G products, we expect that for the wireless coverage products, they will be roughly about 35% to 40%, and for the RF products, around 30%.
The proportion of RF products would increase slightly in the year 2007, about 10% to 15% in the total proportion of sales. So in sum, they will be roughly about 35% to 40% of the gross margin.
If I could just add one more impact; the impact on the gross margin also comes from the centralized bidding of China Mobile as well. Thank you.
Mike Walkley - Piper Jaffray
Thank you. And on your operating margin, with your continued investment in the RF component side, would you give us a range where you think your operating margins will be for 2007?
Rong Yu (Translation)
If we take the cost, for example, for the -- because we invest 65% of the total R&D investments are RF, so the cost for the RF would be about 6% to 6.5% and for the marketing it would be 13% to 14% for the development of our customers. For the general administration, it would be about 6% of the cost of the R&D. Thank you.
Operator
Your next question comes from the line of Daniel Amir with W.R. Hambrecht. Please proceed. Mr. Amir, your line is open.
Daniel Amir - W.R. Hambrecht+CO
Good morning. A couple of questions here; first of all, on the 3G side, can you expand a bit -- now that we seem to see that TD-SCDMA are the first licenses that are going to come out and then the others, it is a question whether they are going to come out in ’07 or not, what is in your guidance here for 2007? Can you expand a bit what portion of this and when do you expect this to start hitting your top line?
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