Getch
One of the points that Gregg Powers made years ago was that the dual mode CDMA-WCDMA chip that will eventually be required throughout the world will actually be a great positive for Qualcomm as its complexity will be Qualcomm's greatest barrier to entry from competition.
QUALCOMM can own the CDMA/WCDMA Asic market.. I doubt few other vendors will be interested in the combination of the two technologies.. Most will concentrate on GSM/WCDMA... IMO.. Actually, if memory serves me correct.. GP noted that he thought that it would have been better for Qualcomm in the long run to have stuck to their.. "We will only license IPR for a worldwide standard based on our Methodologies and Technology". Which I happen to agree with!!
I do not deny Qualcomm's overwhelming superiority in the current IS-95 based CDMA Asic market!.
However, these other companies that Qualcomm provided resale Asic licenses to.. Namely DSP Comm, VLSI, and PrarieCom. were all small players.. None of which had the financial resources necessary to undertake a credible challenge to Qualcomm..IMO The larger companies like MOT, NOK, and ERICY were restricted to "self supply" limitations! So the "Economics of Scale" so to speak were never allowed!!
This is what I refer to as "Adminsitration of Technology Entitlement".. Others have used it in the past. "Like Intel"
Now the number of companies queuing up to provide resale WCDMA ASIC's is growing by the day.. Such as Agilent's purchase of Sirius Communications, Infineon, and where are those WCDMA chips coming from in the Matsushita WCDMA handsets in Japan? All of this will lead to additional competition and lower ASIC pricing, and hence cheaper UT's and lower associated royalties.to Qualcomm.
Even within the scope of limited ASIC competition with Qualcomm in it's current IS-95 based technology.. Almost every quarter.. We read the same message in the 10-Q's
"Revenues increased due to higher unit shipments of MSM integrated circuits to wireless device manufacturers, offset by the decrease in the average selling prices of integrated circuits."
Why is there continued downward pressure on ASIC pricing??
Over the last 2 years..ASIC shipment are up almost 50%.. Yet QCT Revenues do not reflect this stellar ASIC shipment growth:
FY 1999 - $1,133,422
FY 1999 - $1,238,702
1/2 FY2001 - $693,795
What happens when you have a dozen companies producing resale WCDMA Asics?
And though you may find in "near comical".. The fact is.. That someone is already producing WCDMA ASIC's and they are being used in the production of initial WCDMA UT's.
Intel bought its CDMA chip license, only to later announce that they would not be spending any additional time and money developing the chipset.
Why was this? Just too difficult for INTEL to handle??
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