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Technology Stocks : Nokia (NOK)
NOK 6.620+0.5%Dec 26 9:30 AM EST

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To: tero kuittinen who wrote (8210)11/16/2000 4:05:33 PM
From: Maurice Winn  Read Replies (1) of 34857
 
Tero, I've been evaluating VW40 since 1996. For a long time, Ericy and Nokia denied that their 'new' invention depended on QUALCOMM technology. Perversely, Bill Frezza was simultaneously denying CDMA would work, that it was a fraud etc, while in the employ of L M Ericsson if only on a consultancy basis.

The 'new' CDMA was clearly intended to be vaporware, the definition of which is a product announcement when it is but a gleam in the eye, with the hope of preventing competitors doing the same and with the hope of influencing customers to stay the course [GSM in this case] with the promise of gold in them thar hills.

I have never been able to detect a technical merit for W-CDMA, especially when the chip rate and other properties so diverged from the true realm of CDMA upgrades as promulgated by the High Priest of CDMA [Mighty Q!].

I am still unaware of any technical merit for W-CDMA. I'm aware of the unsubstantiated claim that data rates will be higher per spectrum chunk in W-CDMA due to the higher chip rate, but people who know, such as Klein Gilhousen and other masters of CDMA, say that simplistic 'more is better' chip rate arguments are simply wrong.

There seems to be an architectural and operating inefficiency introduced by the need to have multimode ASICs in the one handset as a result of the differences between the two CDMA systems, so there is a technical drawback to the arbitrary W-CDMA differences. Irwin Jacobs has said that the inefficiency and architectural space requirements are not too bad, meaning they can cope with making such a device without it being too big, inefficient or expensive for subscribers to accept.

The driving force for W-CDMA seems to be to do with competitive advantage for those in the know about how to make it and the experience in the development phase. Also, there is political protectionism.

Unfortunately for Nokia, their inability to come up with ASICs means they are unlikely to get much advantage from their early work in W-CDMA. They'll buy Q! W-CDMA ASICs just like everyone else [well, 90% of others]. Unfortunately for the politicos, there are trade agreements which need to be recognized.

Now to the cost of W-CDMA. Rumour has it that Koreans and others whined like fleets of 747s because QUALCOMM was charging something like 5.5% royalties on their CDMA technology. They claimed the price was so high it was killing CDMA. But now, the 3G Guild [3GG] thinks they can charge something like 15% or 18% royalties for this cobbled together standard which doesn't fit any other CDMA system other than through the ingenuity of QUALCOMM.

Don't you think 15% evaluates as being a show-stopper? So, who's going to forfeit their fees to get the royalty down to the cdma2000 total royalty rate, which is where W-CDMA will need to be to be competitive with the better technology? If they forfeit their fees, what's the point in having the W-CDMA standard anyway?

Meanwhile, King Ericy has been shown as wearing no clothes and Nokia is now naked in their claim that they had proprietary rights to CDMA in W-CDMA. Their VW40 was shown to be pure bunk. It was totally predicated on QUALCOMM know-how despite years of denials.

So, we can evaluate W-CDMA in the clear light of day. It looks very expensive at 18% royalty compared with 5% or so for cdma2000. Especially since the extra 13% royalties don't seem to come with any technical merit, or backward compatibility, or other cost savings, or any advantage at all.

Perhaps you could schedule what must be a lot of advantages to subscribers to buy W-CDMA systems and for service providers to install such networks.

Mqurice

PS: Q! a whisker away from $90 a few minutes ago [+$4]. Somebody thinks their prospects are pretty good in a down day market [-4%]
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