Mr. Aggarwal,
Not only was this article poorly researched, but your synopsis mistates several key points. My response to both the article and your summary:
1. The article in question is entirely about CDMA-One or IS-95 handsets. It does not address W-CDMA at all. The difference between these technologies has been discussed ad nauseam on this thread. For you to suggest that the Wireless Week author is suggesting that "Nokia WCDMA efforts are [sic] poor" is flat out wrong.
2. The article starts out purporting to analyze Siemens entry into the US market, then exclusively addresses the IS-95 carriers. CDMA is less than 40% of the US market.
3. You say "German firms Siemens and Bosch targeting Nokia". The article says nothing of the sort. The article, which does not explicitly mention Siemens acquisition of Bosch at all, focuses on the challenges Siemens may have in introducing CDMA phones and tries to compare the situation to Nokia's slow start in this particular market segment.
4. The article overstates Motorola's success in CDMA - it is neck and neck with Samsung and Audiovox. Furthermore, you infer that the author is saying "Nokia is having more problems than Motorola" - the author actually states that Nokia faces "similar challenges" in CDMA as Motorola. You infer that Nokia has a lack of semiconductor design experience, while the author makes no such claim as it would be patently false.
5. You and the author point to analysts that believe that "Nokia may have burned bridges by stubbornly refusing to turn to Qualcomm". The only bridges that they may have burned appear to be those that lead to Qualcomm itself. While BAM may be frustrated with Nokia's early CDMA offerings, Verizon is co-owned by Vodaphone - the world's largest distrubuter of Nokia handsets. I do not think a year's delay in solving the CDMA market is burning any bridges with this or any customer.
6. Nokia will not buy chips from Qualcomm. Nokia derives extraordinary economies from running all of its phones from the TI DSP. To add Qualcomm as a vendor would necessitate porting software and sourcing different periferal chips, negating the enormous advantage Nokia enjoys in sourcing costs and flexible manufacturing. The fact that US analysts like to ask if Nokia will by Qualcomm chipsets is more indicative of their hopes that Q can extend its chipset market share, rather than of concern that this is in anyway threatening to Nokia's performance. BTW this question was not asked on today's conference call.
7. I suspect that Nokia's new CDMA models due in the second half will lay all of this speculation to bed. In any case, I think Nokia investors feel pretty confident, given the fact that it increased handset sales 88% YoY. |
