<font color=RED>THE BLEEDING EDGE
<Tim Donahue, Nextel’s CEO, said Nextel has abandoned the EDGE solution completely. The company is considering a 1XRTT solution or another broadband solution. >
EDGE is a total failure. GPRS is struggling and will be nothing more than a half-baked non-entity which will help GSM networks for a while. Bluetooth is a killer-app. CDMA is KING-KONG. GSM will be buried in W-CDMA by Q! if operators select that mode. 1x-EV and 1xRTT are leading the charge. If operators choose cdma2000 instead of W-CDMA, it seems they'll save about 10% in royalties [5% for cdma2000 instead of 15% or so for W-CDMA]. I can't see why they'd choose W-CDMA. There have still been no reasons given why it is technically better - none that make sense anyway.
That 15% could be fatal because when Q! collects the 5% royalty on a $1000 WWeb device with all bells and whistles, that will be a serious amount of money. At 15%, it would be a show-stopper and the competitive advantage will go to cdma2000 operators.
As the WWeb devices become a lot more expensive, thanks to all the added features and computing power, QUALCOMM royalties are going to go through the roof.
There is no reason for QUALCOMM to reduce royalties and the 3G auction showed just how underpriced the intellectual property which enabled the 3G systems was. There was no way to increase royalties after the event because existing royalty agreements would simply mean that no new entrants could come in [beyond a limited royalty increase to 10% or so].
But with high-value WWeb devices and the same low 5% royalties [estimated], QUALCOMM will get very high unit payments because the royalty will be paid on the total wholesale price of the devices. I think they put an upper limit on it. A $1000 device would return $50 in royalties, plus ASIC sales, software sales, Eudora, SnapTrack, WirelessKnowledge, etc.
1 billion people x $80 per device to Q! = $80 billion over the next 5 years. Then, they'll upgrade every two years [to 5G, 6G and up to 10G in 2010] and new subscribers will still be coming so that will be a gross income of $40 billion a year for upgrades, plus a few $$billion per year new subscribers, plus infrastructure ASICs and royalties, Globalstar, Eudora for PCs, OmniTRACS, Cinecomm and the other things = a lot of money.
Mqurice |
