The optimal transmission strategy in terms of outage probability for spatially correlated Multi-Input Multi-Output (MIMO) system is studied in this paper. With covariance feedback the receiver is assumed to have perfect Channel State Information (CSI) while the transmitter knows only the transmit correlation matrix and receive correlation matrix. The optimal transmit directions turn out to be orthogonal directions along the eigenvectors of the transmit correlation matrix and independent of the receive correlation matrix. While the optimal power allocation scheme is related to both transmit and receive correlation matrices. Numerical results show the advantage of optimal power allocation strategy over equal power allocation and beamforming schemes.
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