Union Tribune Text
JohnG
Mobile phone rivalry heats up
Qualcomm passes Ericsson, claims No. 2 spot in U.S.
By Mike Drummond
UNION-TRIBUNE STAFF WRITER
July 1, 1999
SAN DIEGO -- For the first time in its 14-year history, Qualcomm has surpassed
Swedish rival Ericsson as the No. 2 provider of mobile phones in America, a new
Dataquest study says.
With heavy demand for its wireless phone technology, called code division
multiple access, or CDMA, Qualcomm phones captured a 14.8 percent market
share in the first quarter of this year, eclipsing Ericsson's 12.7 percent.
Qualcomm phone sales, however, still ran a distant second to Finland-based
Nokia, which owns 32.4 percent of the domestic mobile phone market.
Nonetheless, CDMA-based phones made by various corporations are now the
best-selling handsets in the United States, surpassing older analog-based phones
and those using other digital technology such as time division multiple access, or
TDMA -- the system of choice for AT&T. That could quickly transform
Qualcomm into a global powerhouse.
More than 35 percent of wireless phones in the United States now use
Qualcomm's CDMA technology.
The CDMA juggernaut should continue, Dataquest said. That would be troubling
news for carriers beholden to, say, global system for mobile communications, or
GSM, the standard in Europe and the system used by some domestic carriers
such as Pacific Bell.
"CDMA's inauguration into the top spot of the U.S. handset market should be
viewed as a rather ominous development by handset manufacturers that have
aggressive market share ambitions but do not currently have a CDMA offering,"
the study said.
The study warned, however, that Qualcomm will face fierce competition from
Nokia and Motorola, which are "aggressively pursuing the CDMA market."
Led by Sprint PCS's vast deployment of CDMA networks, Qualcomm's
underlying wireless technology has conquered the United States.
"This success in the North American market will certainly facilitate its acceptance
and exportability abroad," Dataquest said.
Indeed, just this week China United Telecommunications, China's second-largest
phone carrier, joined the CDMA Development Group, a trade organization
representing 100 companies.
Qualcomm's stock price, once moribund in the $60 range, soared in the wake of a
patent settlement with Ericsson, in which Ericsson agreed to pay Qualcomm
royalties to use existing and future breeds of CDMA.
On Wall Street yesterday, Qualcomm stock closed up 4.74 percent to a 52-week
high of $143.50, adjusted for a recent stock split. |
