[Next] [Direct Article Link] [New Search] [Search the Web]
March 24, 1997, TechWire
Cell Phone Rage In Hong Kong
By By Tom McHale
Stand on any street corner in Hong Kong's central business district or in
the human gridlock of Causeway Bay's trendy shopping area and you
quickly realize cellular phones are as much a necessity for busy Hong
Kongers as a steaming bowl of noodles.An obsession with staying in
touch is not unique to Hong Kong. The phenomenon has swept Asia, and
cellular-handset suppliers are keenly aware of the potential. One
European handset vendor said it estimates the Asian market for digital
cellular handsets alone was worth $2.7 billion in 1996, a figure that
includes Australia, but not Japan. Sales this year in that market are
expected to be in excess of $4 billion.
But despite booming sales, life isn't getting easier for digital-handset
vendors. A year ago, vendors of European-standard Global System for
Mobile Communications (GSM) handsets thought they had Asia in their
pocket. But Code Division Multiple Access (CDMA) technology from
San Diego upstart Qualcomm Inc. has turned Asia's digital-cell-phone
business, and by extension the soon-to-arrive Personal Communications
Services (PCS) market, on its head.
CDMA came out of nowhere in 1996 to take a painful bite out of GSM
growth. CDMA jumped from no subscribers in Asia in January 1996 to
1.2 million today, according to James Person, who heads Qualcomm's
Southeast Asia operation. Some industry watchers said they believe Asian
CDMA subscribers will more than double this year. By contrast, GSM
has 9 million Asian subscribers, but has been building that base since the
early 1990s.
CDMA networks now operate in Hong Kong and South Korea, and are
expected to be operating later this year or in 1998 in China, Japan, India,
Indonesia, the Philippines, Singapore and Thailand.
Qualcomm faces stiff competition in Asia from five CDMA handset
licensees, and another 17 are waiting in the wings.
The company operates a single handset plant in San Diego, producing
300,000 units per month. But production will have to grow substantially
or business could be lost to South Korean and Japanese vendors as Asian
networks roll out. The solution for Qualcomm is to launch production in
Asia, and Person said the company is considering various plant sites.
A stroke of luck for Qualcomm is that neither South Korean nor Japanese
vendors have a home-court advantage in Asia. In fact, upscale users
willing to pay a premium for digital cellular or PCS may well see a certain
cachet in using phones from CDMA's developer. |
