Art, think of the USA car industry in 1966. Now, think of it in 1976. There was quite a bit of scurrying going on as emissions limits, OPEC's price rise, and Japanese inroads put the ubiquitous Yank Tank industry under pressure. Then, move to 1986. Chrysler had headed for BK and was hauled back to survival by the skin of Iacocca's teeth [not to mention a helping hand from the Feds]. Then on to 1996. What a change in the industry there was.
That change was forced by large inroads into the USA market by Japanese car makers. The auto corporate boardrooms were in pandemonium.
The same sort of situation prevails in the telecosm as the stodgy old monopolists who enjoyed regulatory protection come under pressure around the world.
The lowest cost, best performing technology does win if the attraction is sufficient. The USA car industry denied that it was possible to meet CAFE [corporate average fuel economy] and emissions proposals. The Japanese said 'No probrem' and the race was on.
Check out California highways for Lexus and Camry. You'll find swarms of them. Not to mention a bunch of other Japanese cars.
Stodginess and high prices are not protected simply by corporate size.
There are other variables in customers' minds than just price and performance to explain Subaru's minor player status in the USA. People do like to buy local. Some people will die before they intentionally buy a Japanese product [I have an uncle who will never forgive any part of Japan for their actions in WWII]. There are many biases people have, unrelated to price and performance. Image and status are biases. If Bill Clinton buys a type of car, it's very unlikely that George Bush would buy the same. "Republicans don't drive that brand!" might catch on. No self-respecting hoon would be seen dead in a Volvo [Volvo claims nobody is seen dead in a Volvo].
QUALCOMM has the financial and political muscle, and their products are getting the image, status, price and performance, not to mention a bunch of functionality unavailable elsewhere.
There is and will increasingly be competitive pressure in the mobile market. The more the pressure, the better QUALCOMM will do because of the inherent advantages of CDMA and its broad support in the industry as well as an array of technological developments GSM and other technologies can't compete with other than on the fringes.
All the political and financial muscle in the world can't create spectrum out of thin air and China and Europe are not rich in spectrum per person, though each person needs to be rich, judging by the spectrum prices in Europe. QUALCOMM can create spectrum out of thin air. There is no way around that. With the price of spectrum, CDMA is needed to enable a lot of use in that highly-priced spectrum.
PCSTEL says the Europeans might as well put GSM in 3G spectrum, to at least get some use out of it. But that sends them up a dead end street with huge capital expenditure to get there. I don't see why they don't just roll out an all-new 1xRTT network, singing and dancing, complete with bells, whistles, SnapTrack, BREW, and all mod cons.
Seriously, why not do that? It works. It's available now. So are untold numbers of handsets and suppliers. It has a great upgrade path to a sure technology. It's more spectrally efficient. There are lower royalties so it'll be cheaper than VW40 [which won't be available until 2004 or maybe never in a good, working, competitive, state]. It's synchronous. It's got a lower chip rate [slightly]. It's backward compatible. Roaming is a doddle.
It would be nice for Nokia, Ericsson and the other European companies to use a [partly] home-grown technology, but they have to be realistic some time. Anyway, Ericsson is ready to rumble with 1xRTT, so they might be getting ready to do an end run past Nokia in a sudden switcheroo from VW40 to cdma2000, leaving Nokia high and dry with heaps of GPRS and VW40 contracts and no handsets [that work effectively].
Something has to give!
Mqurice |
