<If you think that shafting handset manufacturers is a good move for any digital standard - have another thinking session. It's the fat margins that drive R&D effort>
Quite right Tero. But the shafting of handset manufacturers is done by the other more effective handset manufacturers, not QUALCOMM. This is serious and death-dealing competitive activity. QUALCOMM licensed 40+ handset makers and ensured this intense competition which is great for handset buyers.
Apple and other dog-in-manger type companies which charge like wounded bulls and keep their intellectual property to themselves end up subsidizing uncompetitive manufacturing divisions and gaining little busines. Apple could have been MSFT/Intel/IBM combined but for dog-in-mangerism. I remember Apple's silly, 'Welcome' advertisements to the new IBM PC.
Motorola has diverted capital to CDMA production, which is great for subscribers and great for QUALCOMM. The fact that they were unable to compete effectively in the overall handset business is bad for their shareholders but not bad for subscribers. It is a great shame to see vast waste such as Iridium and badly designed and produced handsets. But that's the price of competition. The USSR and communist concept was to avoid these failures by 'good' central planning. Which doesn't work. Competition does work. The failures are soon weeded out. Because of Motorola's failures, they will have much less capital to put into CDMA. Tough for them!
QUALCOMM had the wit to avoid a long-running disaster by recognizing early that their own handset division would not be able to compete, so sold it to Kyocera, which could. You had the foresight [or luck - we don't really know whether we are prescient or lucky, even if the facts largely support our reasoning] to recognize that QUALCOMM wouldn't make it in handsets. But QUALCOMM had to get into the handset and infrastructure business to ensure an integrated CDMA package was available. They had the wit to plan an exit strategy and didn't get bound up in a cross-subsidy from the IPR division to support the handset division [which many in the Q! threads thought was a good idea - crazy though that seemed to me - even Gregg Powers gave the handset division the advantage of no royalty payments, which baffled me].
Nokia has planned a CDMA entry since 1990 and apart from their stupid joining of the "Let's destroy the concept of intellectual property by stealing Q! IPR" cargo-cultists, has done an overall excellent job of producing and selling wireless handsets.
But the glitch of CDMA entry is still festering with Nokia which has a small CDMA market share [compared with their GSM share]. The CDMA pressure is building daily and Nokia will one day have to be successful in that world or find itself marginalized with a declining GSM world and a swarm of CDMA piranhas gobbling their market share.
This fairy tale is wonderful for Q!, though Grimm for failing handset makers! QUALCOMM shareholders are delighted. If Nokia manages to undergo the conversion, Nokian shareholders will be delighted too. But it will not be Easy Street. The W-CDMA game is desperate and might well be fatal. I expect to see Nokia join Ericy soon enough in pursuing both W-CDMA and the dreaded 'other one'.
Imagine if W-CDMA never really makes it and Nokia is stuck up a blind alley! Ericy has got their escape plan in place having made the big deal with QUALCOMM.
Nokia has got fat margins and is moving those to develop CDMA flat out. Motorola doesn't have the margins to do it, so has become a bit stuck. If Nokia can successfully leverage their brilliant GSM success and margins into CDMA development, they'll do extremely well.
But time's passing by.
Maurice |
