Positive Q/CDMA article (courtesy of Janust and IH)-
Snips>>>
if current trends continue, nearly all of these 21st-century gadgets will contain technology from Qualcomm Inc.
Veteran wireless consultant Alan Reiter said we are just at the beginning of the trend.
"The camera phone is going to replace photos in the wallet," said Reiter, who has been studying wireless technology since the early 1980s. He maintains a Web log, or blog, on camera phones at www.cameraphonereport.com.
The transition to higher-speed services that support these advanced features ---- so-called "third-generation" technology, or 3G ---- could make Qualcomm's Code Division Multiple Access technology the dominant standard worldwide.
While cell phones put a telephone in your pocket, 3G-equipped devices put the Internet in your pocket.
Qualcomm's technology is used in nearly all the 3G services, such as Verizon's. Moreover, those technologies using CDMA give the fastest speeds.
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Qualcomm faces big test with high-speed wireless
nctimes.com
Last modified Saturday, January 31, 2004 7:33 PM PST
By: BRADLEY J. FIKES - Staff Writer
SAN DIEGO ---- Pity the poor denizens of Star Trek. Even in the 24th century, their communicator device is more primitive than the new cell phones now hitting the market.
Today's cell phones provide a whole set of features Star Trek creator Gene Roddenberry never envisioned, such as polyphonic ring tones, music, photos, videos and even television. By comparison, plain old voice seems almost boring.
And if current trends continue, nearly all of these 21st-century gadgets will contain technology from Qualcomm Inc., the San Diego-based wireless communications giant.
The shift from idle talk to cultural phenomenon has happened seemingly overnight. Cell phones with cameras are everywhere. They are so popular that, like any popular technology, they have been put to unsavory uses, such as taking pornographic pictures of people without their knowledge. Countries are considering laws to regulate their usage.
Veteran wireless consultant Alan Reiter said we are just at the beginning of the trend.
"The camera phone is going to replace photos in the wallet," said Reiter, who has been studying wireless technology since the early 1980s. He maintains a Web log, or blog, on camera phones at www.cameraphonereport.com.
"People are going to carry photos and videos in their camera phones. What is more interesting: showing a picture of your child's birthday party, or showing a 15-second video of him blowing out the candles?"
Spreading the technology
The transition to higher-speed services that support these advanced features ---- so-called "third-generation" technology, or 3G ---- could make Qualcomm's Code Division Multiple Access technology the dominant standard worldwide.
The first generation was classical, or "analog" cellular technology. The second generation was digital cellular and PCS, which gave better voice quality, more capacity and greater data transmission speeds.
Third-generation technology extends data speeds to the near-equivalent of cable modem speeds, ranging from a few hundred kilobits per second to more than a megabit, or a million bits, per second. While cell phones put a telephone in your pocket, 3G-equipped devices put the Internet in your pocket.
Qualcomm's technology is used in nearly all the 3G services, such as Verizon's. Moreover, those technologies using CDMA give the fastest speeds.
Caution: Unavoidably, these third-generation technologies have typical techie names, such as CDMA2000, W-CDMA, EDGE, etc.
Acronyms aside, the bottom line is that as 3G spreads around the world, so does Qualcomm's technology. That means more money to Qualcomm, since it collects royalties on its technology.
In the last few years, cell-phone service has become a commodity. And it's a basic principle of economics that commodities don't command the profit margins that specialized products do. So fast data service and the other features it enables represent a way for cellular carriers to differentiate themselves, and for cell-phone manufacturers to command higher prices.
Another boom
Wall Street has taken notice. Six months ago, Qualcomm stock sold for about $36 per share. On Friday, the stock closed at $58.61, up $1.07 cents for the day. That is a rise of 60 percent in that time. At that price, the total value of Qualcomm is more than $47 billion.
But we have been here before.
In 1999, Qualcomm stock opened the year at a split-adjusted price of $6.89 per share. It ended the year at $175.01, more than 25 times that price. Qualcomm stock then deflated, falling to the high $20s by mid-2002.
Now the boom appears to be back. But whether it stays depends on whether businesses and consumers take to the new services ---- and whether cellular carriers know how to provide and market them effectively.
The thought of people sharing family videos on their cell phones may seem odd at first to many people, consultant Reiter conceded. It's not necessary, and photos are good enough. But that is what was said of many technologies at first, he pointed out, including cell phones.
"Take a look at what we've done on the Internet," Reiter said. "People have DSL modems, and they want to switch to cable modems because it's faster."
"This will benefit Qualcomm," Reiter said. "More powerful chips that can handle those speeds are more expensive."
Qualcomm makes nearly all the CDMA chips used in cell phones, although other competitors such as Texas Instruments are now making their own. But even they must pay royalty fees to Qualcomm.
Underdog's chance
Currently, Qualcomm's technology is used mainly in North America and South Korea. The rest of the world is dominated by a competing technology called Global System for Mobile Communications. About 180 million people use CDMA worldwide, out of more than 1 billion cellular subscribers.
The number of 3G subscribers has grown to more than 70 million worldwide, nearly all of them using some form of Qualcomm's technology, although that is a small fraction of total cellular customers.
Ira Brodsky, president of market research firm Datacomm Research Co. of Chesterfield, Mo., points to Japan as a good example of what could happen.
In Japan, for example, the upstart cellular carrier KDDI has outpaced the larger incumbent, DoCoMo, in signing up 3G subscribers, 10 million to 2 million.
KDDI uses CDMA2000 from Qualcomm. DoCoMo uses a version called W-CDMA that despite its name was mainly developed by Qualcomm rivals. (However, it also uses some Qualcomm technology, and users of it must pay Qualcomm royalties).
On Friday, KDDI raised its earnings forecast for the year after it reported a 22 percent rise in quarterly earnings. The company attributed this increase to the success of its 3G deployment.
South Korea leading the way
South Korea, where Qualcomm's technology is the mandated standard nationwide, is perhaps the world's leader in adopting third-generation services. Since July, more than half the cell phones sold there have built-in cameras, according to a report from The Shosteck Group, a wireless research firm in Wheaton, Md.
South Korea carriers launched the most advanced version yet of Qualcomm's CDMA2000 technology, called 1XEV-DO, in November 2002. Carrier SK Telecom reported signing up 1 million subscribers to EV-DO within 8 months.
This technology is supposed to give download speeds of 300 to 500 kilobits per second, with bursts of more than a megabit per second. It is offered in a different part of the spectrum than voice, so it's often used with laptop computer cards.
Verizon Wireless began implementing this technology in San Diego and Washington, D.C., last year. In January, the company said it would spend $1 billion to roll out the service nationwide. The cost is $80 a month for unlimited use. (Meanwhile, Sprint PCS is sticking to the previous generation, called 1XRTT, but has said that it will offer its own ultra-fast service at some point in the future).
Verizon's announcement "raises the bar," said Jane Zweig, Shosteck's chief executive. Previously, the national speed champ was AT&T Wireless, which used yet another technology, Enhanced Data rates for GSM Evolution, or EDGE. That technology offers download speeds of up to 100 kilobits per second.
"It's pretty darned fast," Zweig said of EV-DO, who said she tested it and found the experience much like being on an office network.
Speed not sole factor
Zweig cautioned that speed alone is not the only factor a cellular carrier must take into account. The breadth of coverage, availability and price of cell phones and equipment, and customer service are also critical factors.
Zweig said one reason DoCoMo had such a problem signing up subscribers to its high-speed network is that its phones were far most costly than those from KDDI.
Datacomm's Brodsky and wireless consultant Reiter also praised EV-DO's performance.
"EV-DO is the first-full-blown implementation of 3G," Brodsky said.
Reiter said that in his experience, Verizon's high-speed network is not as fast as advertised, but twice as fast as AT&T Wireless's, and four times as fast as 1XRTT.
"That could be an important distinction from a competitive standpoint," Reiter said.
Now all that is left is to see if cellular subscribers agree.
Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com. |
