IMHO, the only real problem for NOK is the fact that it is losing the catbird seat to an american company, no matter how good they do in the tech area. I doubt they have a clue how to keep up with Qualcomm in the WCDMA tech space. It is true they will lose much of the royalty stream, which by the way, has become precious to them since the profits from W-CDMA will be much smaller for them than GSM profits were for them. It is no longer about huge volume, with each phone being identical, tech-wise, as the GSM phones were.
The market now is a very segmented thing since we are not just talking about voice as the only application anymore. In a few short years, voice will be only one function of a personal communicator that can do hundreds of important things. How do you ramp all that up?? Not so easy. As awesome as Nokia is at capitalizing on wireless trends, it's hayday has ended. A tough pill to swallow for a company that was the knight-in- shining-armor in wireless for so long.....They put wireless on the map.
If you think about it, NOK never had to be much of a technology powerhouse before. What put them on the map was it's ability to ramp up production, lower the cost of ubiquitous handsets dramatically to grab huge market share in a technology that was simple by comparison with what is happening now. Technology has never been their strong suit.....volume volume volume, along with cool style, was their oyster.
And so, NOK has to go all out to do whatever it can to derail what it thinks is going to be the new "king of the hill" in wireless. And they cannot do that all by themselves...they gotta get other powerful companies on board with them to have any success at accomplishing that.
If ever Qualcomm was in danger, it is now....huge companies with one voice have as much or more power than the politics of most countries they operate in.
It is also my feeling that any company, including Qualcomm, would play just as dirty as the GSM Cobal has if it had enjoyed the king of the hill like NOK had. That is, if it came right down to the nitty.
Qualcomm appears to be ready for this challenge, but they are forced to take the high road....to make sure they maintain their composure as the brightest, fastest-to-market executers of new technology, and that they do it by sticking entirely to the rules of business. The minute they resort to something underhanded, as NOK and company have, they will lose. They must not falter as they are put thru this gauntlet that this company has never had to go thru before. Irwin Jacobs was excellent at selling and protecting a new and awesome technology that, back then, was not such a huge threat as now. The stakes are much much higher now, with many billions instead of millions at stake. They have come so far, but they have not won, not yet.
I believe Q can hang on and do this, but it will not be cheap. Keeping their business above board and entirely "legit" can be extremely expensive. Just look at the cost of R&D and Legal Defense these days. And these costs will probly go higher. And so it is not "game over", as many had thought after the first Holy Wars, where Q had won. Holy Wars II (which is more like WWII) is in progress. Go Q!!
e.k. |
