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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 159.42-1.2%Jan 16 9:30 AM EST

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To: kech who wrote (23318)6/2/2002 2:17:25 PM
From: Art Bechhoefer  Read Replies (3) of 197252
 
Two or three years ago, not everyone thought WCDMA would be up and running. This hype was produced largely by GSM manufacturers and service providers who previously agreed to a standard that would exclude CDMAOne from ever being adopted in Europe and many other countries outside the U.S.

Recall that the reason for adopting the WCDMA standard was the notion, since proved false, that somehow WCDMA would be able to circumvent QUALCOMM patents, especially those which had been cross licensed to Interdigital Technologies (who hears that name any more?). In fact, for two years at least, we've been hearing from QUALCOMM officers that WCDMA has a lot of problems and is unlikely to be adopted for awhile. They were right on the button, and of course, by stating that opinion, it is also true that QCOM was hoping it might influence some of the GSM-GPRS-WCDMA proponents to consider a cheaper, more reliable alternative.

Technology has a wonderful way of solving old problems. Today, the solution for WCDMA is more refined chips that actually work, even though the cost of WCDMA is still higher than for CDMA2000; plus compatibility across systems, which now turns into a selling point instead of a block to further CDMA inroads. It is now clear that the Europeans were more interested in blocking CDMA than in acknowledging that the technical leadership in wireless had swung over to QCOM. Now they have no choice. They have to compete with a better performing lower cost 3G system, and they need compatibility with CDMA just to preserve their own GSM business from losing out to CDMA.

What was not clear two or three years ago was that the Europeans would prefer lower growth, lower profits, and worse wireless performance in return for retaining GSM leadership. This is not rational from an economic point of view, but I guess it makes sense to those with other non-economic agendas.

Art
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