Flogging the '3G' Dog
peter,
<< psylent-They should get down on their knees every night and thank Q for their success. However, they got it into their minds that they are big contributors to WCDMA. >>
If you have followed the wireless industry, you know that they are, in fact, major contributors to WCDMA -- to its requirements setting, to its standards development, to its commercialization.
<< If so why are they going horizontal by giving up their precious IPR (ggg). >>
Nokia is NOT giving away any IPR as a result of scaling back ASIC development while continuing to develop its own modem technology and software development platforms and commencing the licensing of its HEDGE and WEDGE protocol stacks for use in merchant ASSPs provided by its four primary semiconductor manufacturing partners.
<< If Nokia's IPR was worth anything would they have given it away and eliminated R&D. >>
While Nokia does not have a strict IPR business model, and makes money on the manufacture of whole product, Nokia does not give away its IPR. Nokia licenses its IPR or cross-licenses it, and it is by no means eliminating R&D.
In the restructured Nokia Group organization that commences operations January 1, 2008, R&D will be refocused even more on software and software based services development than it has been in the past but their 2008 R&D spend will still be in excess of $5 Billion USD. -- the highest in the communications equipment industry. Some 200 ASIC design engineers in Finland and the UK will likely be transferred to STMicro. That is about 1% (one percent) of the R&D personnel they employ excluding recent new adds from Siemens on the network side.
<< Nokia is still trailing the Q when it comes to 3g >>
Nokia certainly isn't trailing QUALCOMM when it comes to 3G UMTS (WCDMA/HSPA), and it NEVER has.
Nokia was the 3rd manufacturer to ship commercial multi-mode 3G UMTS devices, trailing NEC and Motorola (neither of whom used QUALCOMM silicon) by 3 months when they commenced initial commercial shipments of UMTS 'early UE' in July 2003. They have been the global share leader in 3G UMTS mobile devices since Q3 2005 and their global share has increased significantly since then. Nokia right-timed its market entry in UMTS (WCDMA) handsets and its market entry in UMTS (WEDGE and HEDGE) handsets.
Today, Nokia's unit and revenue share in 3G UMTS mobile devices is greater than the combined unit and revenue share of all handset manufacturers using QUALCOMM 3G UMTS baseband ICs combined. Although they haven't yet attacked the low end Nokia has the broadest range of 3G UMTS handsets and their high end 3G UMTS smartphones (with or without WiFi) pack more functionality than any competitive 3G UMTS smartphones, although Sony Ericsson, Samsung, and LG, are all now packing more functionality than in the past and both Samsung, and LG, are shipping high end smartphones utilizing (under royalty bearing license) Nokia's Series 60 software platform for the Symbian OS (as well as Windows Mobile).
Nokia Networks was the 2nd largest manufacturer of 3G UMTS infrastructure prior to their merger with Siemens networks, and post merger they remain number 2 to Ericsson with their combined expanded share.
<< Nokia is still trailing the Q when it comes to 3g (Jhorma, recall admitted this). >>
Still attempting to flog that dog, eh?
Let's repeat your favorite Jorma Ollila reference ...
6/26/2000] Nazareth, Israel (Dow Jones) -- The chairman and chief executive of Nokia Corp. (NOK) said Monday that one of his biggest concerns is that "we are not as quick as we were six years ago," when the company had half the 56,000 employees it has today. "You start to believe that what you created three years ago is so good, because it was good two years ago and 18 months ago, and you continue to make money," Jorma Ollila told an Israeli news conference. "And then there's someone in Israel and Silicon Valley just loving to kill you with a totally new technology," Ollila said. "And I think the problem in a big organization is that it starts to feed information internally that sort of supports its own internal truths and doesn't believe all the signals that you are getting. "I don't think we were quick enough to invest big enough in CDMA (Code Division Multiple Access)," Ollila continued. "We should have done that earlier, more. Now we have a catch-up game, which we will win. We have decided we will win and we will. But it's a little bad to miss 18 months. And part of it is that we were successful in other technologies. So I think that is a big problem. "With a big organization, you start creating your own truths," he concluded. "I'm not overly worried. But I am worried because human nature is like that." - Amy Teibel, Dow Jones Newswires; 972-2-537-6985; amy.teibel@dowjones.com
Message 23597140
Do you see a reference to '3G' in that passage?
Do you have a reference to another Jorma Ollila statement that Nokia trailed or trails QUALCOMM in '3G?'
When Jorma Ollila (then or now) says CDMA, he is NOT referring to 3G WCDMA, and back then in March 2000, CDMA was cdmaOne (IS-95) with cdma2000 1xRTT Release 0 (IS-2000) in development.
When Jorma Ollila (then or now) says '3G' -- which he did not say -- he is not referring to IS-95 or IS-2000, he is referring to WCDMA (with or without the HSPA extensions) or 1xEV-DO. At one time he would have included (cdma2000 R'C/R'D) 1xEV-DV. In the future he'll also be referring to OFDMA based LTE when he references '3G.'
<< Europe providers are coming Q's way for 3g and Nokia can't stand being left out in the cold. >>
It is a highly competitive market, and in 3G UMTS handsets in EMEA (including Western and Eastern Europe), and APAC, while Samsung, LG, Huwaeii, and HTC (all using QUALCPMM silicon) are doing reasonably well, Nokia's principle competitor currently for 3G UMTS share is Sony Ericsson who like Nokia today, designs its own protocol stacks and chipsets which are fabricated by TI and (now) STMicro. Unlike Nokia (today or tomorrow), EMP is a merchant chip supplier.
<< Eventually they are going to have to pay Q for that 35% market share. >>
Nokia has enjoyed ~35% global UMTS handset share for over a year, and through CQ1 2007 has paid QUALCOMM the agreed royalty on those handsets. In CQ2 they accrued an estimated royalty payment to QUALCOMM.
Message 23757776
Eventually QUALCOMM will in fact be paid at whatever rate it negotiated with Nokia or a rate that is dictated by a legal authority. Depending on how long it takes for that eventuality to occur, it could be quite a positive windfall.
<< The analysts realize Q's FUNDAMENTALS remain strong even if the market doesn't. >>
QUALCOMM's fundamentals ARE strong. Their 3G merchant ASIC range on both the CDMA and WCDMA side are both quite impressive, IMO. Their royalty flow might be challenged but it certainly isn't going away. Hopefully you took advantage of a nice buying opportunity when QCOM dipped below $35.50 on several occasions this last week. Within 10% of a 3 year low. Unless we have a complete market collapse of some duration that and anything lower appears to be quite attractive as an addition point.
<< I'd say the only chance for Nokia is if they get blind pig lucky. >>
When your friend Jhorma [sp) Ollila took the Nokia helm in 1992, Nokia was an unfocused conglomerate and mobile wireless communications equipment represented a fraction of their $3 Billion annual turnover.
At the end of 2000 they were still only the worlds 6th largest communications equipment manufacturer as measured by annual turnover.
Today, in addition to successfully transitioning to 3G and establishing 3G market leadership, they are a mobile wireless pure play and the worlds largest communications equipment manufacturer as measured by net sales, revenue share, profitability, and market cap (unless you include Cisco Systems's market cap in comms equipment). That did not occur by being blind pig lucky.
A blind pigs luck will not determine their future success. Execution will.
<< They should get down on their knees every night and thank Q for their success. >>
IMJ and PJ should probably get down on THEIR knees every night and thank Nokia and Ericsson for deciding in 1996 to back Japan's decision to develop and standardize W-CDMA as their candidate radio access technology submission to the ITU for IMT-2000 3G, and to lead (along with Matsushita, NEC, and TI) the development and commercialization of the technology. Come to think of it, they probably do. <g>
Cheers,
- Eric - |
