QUALCOMM's biggest customer [not Korea, but China]. This is about Korea: <In a country where about 28 million people out of a total population of 46 million (or 61 percent) are subscribing to wireless phone services, extra room for faster voice-oriented growth is almost non-existent. The next "big thing" - many industry experts, mobile carrier executives and telecom analysts believe - will be high-powered wireless multimedia services.>
The very first commercial CDMA network [other than the dodgy Hong Kong one], was in Korea in April 1996. CDMA and Silicon Investor started life at the very same time! SI represented the Dot.com revolution. CDMA represented the Telecosmic revolution. The Infospace and QUALCOMM stock prices show the story of what happened in terms of cash flow and profit.
Anyway, not to be sidetracked by It, in the space of 5 years, Korea's CDMA market has gone from nobody to about 60% of the population. That was from a standing start, and they had to invent the technology as they went.
Now, what does that mean for Hu Jintao, QUALCOMM's biggest customer?
He's got a country of 1,200,000,000 people, give or take a few dozen Kiwiland equivalents. Interestingly, those people are not paddling in paddy fields, pulling bwana in a rickshaw, or going on long marches. They are 20 year old single children and their middle-aged parents with an education, civilized behaviour, a rapidly developing economy with a stable political system but not much of a telephone system.
While they aren't wealthy enough to buy expensive trips overseas, SUVs, swimming pools or home movie theatres, they are wealthy enough to buy CDMA phones and multifunctional cyberspace devices such as Anita [TM].
Since they are coming new to the technology, which has been dramatically improved since 1995, making it very attractive to everyone and since cyberspace [in Chinese language] has developed along with CDMA [see english.peopledaily.com.cn for example - you can go there and click on the Chinese version if you have browsers enabled for the language], and since they are of the right age group and love talking and love reading and thinking and learning, and since they can afford it [increasingly and very rapidly getting that way - growth at 7% or more, per year, for decades has helped] and since they can read long sentences, they will buy, within 5 years, a similar proportion of phones per person as Korea.
Now, China has got a huge GSM business going [thanks to Bill Clinton's inadvertent, or careless, or deliberate, but certainly disastrous, bombing of the Chinese embassy in Belgrade which meant CDMA was put on the back burner for a year or two]. That means the market for CDMA has been dramatically reduced.
But even so, there isn't enough spectrum for 1.2 billion Chinese to chatter away on GSM and certainly not enough for them to swoop around in cyberspace too [assuming GPRS, EDGE and W-CDMA actually do, sometime, work, more or less]. China Unicom knows that and has installed CDMA. They say they will focus on their CDMA network instead of their GSM network.
China can make a LOT of money from CDMA and can produce their own subscriber equipment, saving a lot of foreign reserves, thanks to the low 'for use in China' royalty rates and agreements for technology transfer and joint ventures with Korean, Japanese and USA companies [and maybe some of the hagfish slime-buckets too].
So, in 5 years, we should expect to see something like 40% of Chinese using CDMA phones and other gadgets. That's about 500 million. That's a LOT of phones.
It depends on the balance between GSM and CDMA and how popular the 1xRTT and cdma2000 improvements are. Judging from Korean sales, they are very, very popular. Surprisingly popular. Sales are making people realize that 3G is for real. And BREW is still only in development and so are the subscriber devices.
Since GSM simply cannot [in any economic fashion] provide effective 3G services, the writing is on the wall for GSM networks. They'll be legacy voice systems and when the pressure is on spectrum, which it will be given the number of people in such a small geographic space, GSM will be ditched in favour of the vastly more spectrally-efficient cdma2000, Made in China using QUALCOMM ASICs and royalty-paid technology. People upgrade phones faster than they buy new shoes, [imagine Imelda's CDMA phone supply...wow...], so they'll be ditching their old-fashioned GSM phones for CDMA very quickly in about 3 years when CDMA is well-known, the technology is robust and economic and their two year old GSM phone is getting worn and obsolete.
I expect there will be 150% CDMA use in China by 2010. That means 2 devices for most people [a phone and a phone/pdQ or phone/notebook computer or phone/Globalstar link etc etc etc ... the wireless CDMA world is going to be prolific]. That means about 2 billion CDMA devices in China by 2010.
Now, that's a LOT of ASICs and a LOT of royalties.
Then there are the other things:
Graviton, PayPal, Globalstar, Eudora, Cinema, Wingcast, WirelessKnowledge, BREW, PacketVideo, SnapTrack, inViso, AirFiber, handspring, and those other weird enabling technologies such as M7 networks. Apolgies to those I have left out, such as OmniTRACS, which will also make a lot of sales. Condor etc.
Welcome to the world Hu Jintao!
Mqurice |
