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This paper addresses the performance of spatial division multiplexing (SDM) multiple-input multiple-output (MIMO) techniques together with frequency domain packet scheduling (FDPS) in both theory and practice. We start with a theoretical analysis under some ideal assumptions to derive the performance bounds of SDM-FDPS. To facilitate the analysis, a unified SINR concept is utilized to make a fair comparison of MIMO schemes with different number of spatial streams. The effect of packet scheduling is included in the post-scheduling SINR distribution using an analytical model. Based on that, the performance bounds are obtained with a more realistic SINR to throughput mapping metric. The system-level performance of SDM-FDPS has been evaluated under practical constraints using detailed simulations based on the UTRAN long term evolution (LTE) downlink cellular system framework. The purpose is to investigate the impact of realistic factors on performance. Results confirm that the combination of SDM and FDPS can increase the spectral efficiency significantly, particularly in a micro-cell scenario, and up to 30%-60% gain is observed over 1times2 with FDPS depending on the traffic models considered. Finally, the more practical simulation results are compared against the theoretical performance bounds. A performance loss is seen in the simulations due to realistic coding/modulation, impact of frequency selectivity, signalling constraints, imperfect channel quality indicator (CQI), etc.