Maurice,
Look at this release by QCOM. Jacobs actually states that the hand sets that they are making won't work in an analog site. I guess when you leave the CDMA cell site thats the end of your phoning capabilities. Will potential customers purchase a new phone this year and throw it away next year and buy a dual-mode.
Jim
NEW YORK (Jun 18, 1996 5:05 p.m. EDT) -- Qualcomm Inc. expects to triple the number of digital wireless phones it makes per month by the end of the year.Currently, Qualcomm makes almost 100,000 digital phones a month under its joint venture with Sony Electronics.
"We expect by the fourth quarter we will rapidly build up" the company's manufacturing capabilities, said Irwin Jacobs, chairman and chief executive of Qualcomm, at the Bear Stearns
Technology Conference in New York. "We intend to double and triple that per month" by the end of the year, he said.
The phones, which are based on code-division multiple-access technology, will be used in cellular and personal communications services networks. PCS will offer users voice, data and paging
services over small, hand-held phones.
As digital networks are built throughout the U.S., however, some question whether manufacturers of the phones will be able to keep up with demand. Qualcomm has said it expects to start making
digital PCS phones in the fourth quarter -- one of the earliest timetables among manufacturers.
Jacobs said the majority of the digital wireless phones the company makes now will be used in cellular networks. By the end of the year, the company plans to shift production with PCS phones
accounting for most of its output.
PCS operators, such as Sprint Spectrum, have aggressive plans to build their networks in most major cities by the beginning of 1997. Sprint Spectrum, owned by Sprint Corp. and three cable-TV companies, has said it offer PCS in 15 to 20 markets by December.
Qualcomm and Sprint Spectrum are still negotiating an agreement for Sprint Spectrum to buy PCS phones from Qualcomm, Jacobs said.
Qualcomm's initial digital phones are based just on CDMA technology and can't work on traditional analog cellular networks. Jacobs said within a year, however, Qualcomm will start making digital phones that are "dual-mode" and can work with two different technologies, such as
analog and CDMA.
Qualcomm, which is credited with developing CDMA technology, has said it expects to boost its spending by 50 percent in fiscal 1996 to about $120 million. About 80 percent of that money, or
about $100 million will be devoted to CDMA development, he said.
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