UTStarcom signed what looks like a standard license (including TD-SCDMA)with Qualcomm last March. That coincided with a purchase of "CDMA secrets" from Hyundai Syscom, out from under the cooperative noses of Samsung and LG. Essentially, larceny by a Chinese company from Korea, while respecting Q IPR! This article says the Koreans are shocked to have discovered the "illegal sale", but it had been reported in March in the Wall Street Journal the same day as the licensing press release. dev.siliconinvestor.com
-------------------------------------
Cell Phone Technology Leakage Threatens Korea's Standing
times.hankooki.com
By Kim Tae-gyu
Staff Reporter
Korea¡¯s global leadership in the code division multiple access (CDMA) sector is under serious threat following the illegal leakage of cell phone technologies.
Hyundai Syscomm said Sunday it sold its CDMA expertise to UT Starcom, a U.S.-based telecom equipment maker, in March for more than $10 million.
``Our former biggest shareholder disposed of CDMA source codes to UT Starcom earlier this year. Our new management found out the fact through a recent inspection,¡¯¡¯ Hyundai Syscomm said. [ed: lie]
The news especially vexes Korea in its position as CDMA powerhouse because UT Starcomm has deep relations with China, which has been narrowing its technology gap with Korea in the field of mobile handsets, posing a real threat to the nation¡¯s global CDMA power.
To date, the revenues of UT Starcomm have come mainly from services provided in China.
Due to fears that the contract may reduce the competitive gap between the two nations, Korea¡¯s public and private sectors have vowed to make all efforts to nullify the deal, possibly via court action.
Primarily, they take issue with the nature of CDMA technologies, as they are not exclusively owned by Hyundai Syscomm, according to the Electronics and Telecommunications Research Institute (ETRI).
``Hyundai Syscomm doesn¡¯t have any right to sell CDMA secrets without an explicit agreement with co-developers. Thus the deal was not valid from the beginning,¡¯¡¯ an ETRI official said.
With the state-backed ETRI leading the way, Samsung Electronics, LG Electronics and Hyundai Syscomm combined efforts to develop CDMA technologies starting in 1993.
As a result, the four jointly hold the rights to the expertise, meaning none are able to sell their own partial rights without the written consent of the other three.
But Hyundai Syscomm¡¯s former management did not seek this agreement.
In addition, government regulations state that any outbound sale of CDMA technologies is required to gain state approval in advance.
The nation has kept a watchful eye on CDMA know-how after designating certain CDMA equipment and knowledge as strategic export items.
Whatever the result of efforts to nullify the contract, experts say that Korea has failed to recognize unlawful deals for the past eight months, and the current issue should ring alarm bells prompting the nation to develop a better system for protecting industrial secrets.
CDMA Dominance at Stake
As far as CDMA is concerned, Korea has been second to none in launching commercial services at every level as well as making significant profits through cell phone exports.
Originally, CDMA was developed by the U.S.-based Qualcomm. However, after opting CDMA as the national standard in 1995 instead of alternative global systems for mobile communications, Korea deployed the world¡¯s first commercial CDMA services a year later.
With this success under its belt, the nation¡¯s wireless operators claimed other world firsts by launching CDMA 2000 1x services in 2000 and CDMA 1x EV-DO (evolution data optimized) offerings in 2002.
The EV-DO, the latest offspring of Qualcomm, brought genuine third-generation features, like the exchange of multi-media material through mobile mail and TV services on cell phones.
Korean manufacturers have also prevailed in the worldwide CDMA phone market with the formidable duo of Samsung Electronics and LG Electronics accounting for almost half of the global market.
According to Strategy Analytics, a Boston-based researcher, LG shipped 21.3 million CDMA phones last year for a market share of 23.1 percent, while Samsung sold 20.4 million for 20.7 percent.
Despite this success, however, outside the nation¡¯s big three of Samsung, LG and Pantech Group, other mid-tier CDMA cell phone makers started to collapse from last year due mainly to challenges from Chinese players.
The disturbing meltdown of middle-of-the-pack companies has given a wake-up call to the government, which has done little to address competition in the CDMA market.
On a more negative note, the outflow of CDMA technology via Hyundai Syscomm might further dent the nation¡¯s competitive edge in the rivalry with China.
Imminent Court Action
Some experts have played down the urgency of the situation since the leaked CDMA secrets are mostly second-generation (2G) technologies years behind up-to-date third-generation skills.
``If the ETRI wins the case and nullifies the CDMA source code sales deal, UT Starcom will not be allowed to manufacture products based on the 2G CDMA technologies,¡¯¡¯ a Seoul analyst said.
He added some Chinese cell phone vendors today have cutting-edge 3G CDMA technologies like EV-DO or EV-DV (evolution data voice).
However, some critics say recent concerns are not misplaced as 2G technologies are a minimal must en route to establishing 3G know-how and production lines.
``Even though the information relates to 2G technologies, they might help Chinese firms find a shortcut in narrowing the Sino-Korean gap,¡¯¡¯ the ETRI official cautioned.
Until recently, the Korean government was sure that the nation was years ahead of China in the field of cell phones, but new data shows the mainland is rapidly narrowing the gap.
Fearing China¡¯s pursuit, the ETRI is currently looking to draw up possible measures to straighten things up, including court action.
``We are considering bringing the case to court, and the old management of Hyundai Syscomm may face prosecution due to their unlawful technology transactions,¡¯¡¯ the ETRI official said.
voc200@koreatimes.co.kr
10-10-2004 18:01
|
