Fortune Magazine's take on Nokia's CDMA Failures
One is that Nokia could bet on the wrong technology. In the 1990s the company rode the GSM wave to global success. It was in on the development of the standard, produced the first phone for it, and was able to focus its energy on perfecting its phones and network equipment for GSM. It also got in on the ground floor for the technologically similar TDMA standard used by AT&T Wireless in the U.S. But then something unexpected happened. A competing digital standard championed by San Diego's Qualcomm, called CDMA, was adopted by most other big U.S. cellular operators. While Nokia didn't fight CDMA, as Ericsson did, it was unwilling to license Qualcomm's technology, preferring to develop the phones on its own. So far this strategy has been a bust. Nokia's CDMA phones have scored poorly in cellular operators' tests, and its 9% share of the market trails upstarts Kyocera (which bought Qualcomm's phone-manufacturing business), Audiovox, and Samsung, as well as Motorola. Nokia now has hundreds of R&D people in San Diego working to come up with a CDMA phone that will sell. It has also worked hard to make sure that it plays a role in setting the standards used in the next generation of cellular systems (which will mostly use a more advanced version of CDMA). But that doesn't mean it can't be blind-sided again.
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