Daniel, well, you make some reasonable points. But they don't rescue Ericsson.
"Negotiating a better CDMAone license - this would only be true if they actually had a system. If Q is so convinced that it's vaporware (which would seem to be common knowledge in the Q camp), this "benefit" is non-existent and should be laughed at when used as a bargaining chip."
It really is guesswork on both Ericsson's and Qualcomm's parts as to the likelihood of Ericsson coming up with a commercial CDMA system. No doubt, given Ericsson's expertise in the industry, they could at some stage do the job, but the question is when. Suppose they didn't threaten Qualcomm with a competitive system, there would be little incentive for Qualcomm to give much ground at all on the price of a license. But if there is in 3 or 5 years going to be a competitive system, it would be worth Qualcomm's while to keep Ericsson in the cdmaOne world. It remains fair comment to call it vaporware. Early stage vaporware at that. My opinion is that Qualcomm and cdmaOne are so far ahead that Ericsson will lose massive market share before they can get something going. They won't have any competitive advantage to speak of [Qualcomm's royalty on cdmaOne being the only advantage I've thought of - other than the usual existing brand image etc which Ericsson enjoys. But no technical merit of Erisson's system over the cdmaOne approach].
"Delaying CDMAone progress - only if the alternative systems are CDMAone derived. From my understanding, WCDMA isn't intended to directly compete with IS-95 CDMAone or GSM, and therefore shouldn't impede their progress... from what Jim has posted, if the Samsung/IDC efforts aren't CDMAone related, then it would only impede the "vaporware" CDMAone 3G systems that QCOM must be involved in."
Sure, the widerband systems will compete with GSM and cdmaOne existing systems. But offer better functionality as well as compete with voice only. True enough that Qualcomm's wider cdmaOne is vaporware, but let's face it, they have proven expertise in the area which others such as Motorola have had trouble duplicating. All vaporwares are not equal. We'll see how much effort Samsung puts into this new effort now that they've run out of money.
"Talking themselves into doing it - if this is the case, then we're really saying Ericsson management doesn't yet have an implementation plan with regard to wideband systems... which I find hard to believe, given last year's emphasis in their annual report on the future planning they've done."
The first thing you need to do to create some reality is talk yourself into it. Like, "Let's put a man on the moon!" Sensible people say, "What? Are you crazy?" No implementation plan, just a dream. Often enough, such dreams can come to fruition. Ericsson is clearly talking themselves into doing it. Sometimes, all too often, dreams turn to dust. History is littered with failed dreams and the bodies of those who tried to make the dream work.
"Keeping others from developing systems - As Jim has pointed out, IDC/Siemens seems to be going full steam ahead. Also remember, Nokia is a full partner in the WCDMA idea, so they must be in cahoots on the "vaporware" nature of the equipment as well. QCOM isn't being deterred from 3G systems by Ericsson's efforts, are they? So how can the threat of a "known" vaporware 3G Ericsson/Nokia system hold back the mighty Q?"
Certainly, Qualcomm and pals won't be deterred by Ericsson's vaporware. They will be spurred on to create their own - to ensure Ericsson doesn't actually pull victory from the jaws of defeat. But others such as Samsung, Siemens, Interdigital who are putting in effort, might give up in the face of two competing efforts. Ericsson had to confront Qualcomm regardless so it would have been better to be silent and hope to quietly get ahead of Qualcomm, but there was also the need to defeat Samsung and co. Plus the other factors pushes for early announcement. Just as Qualcomm did all those years ago, to talk themselves into it, get support, delay competition, get people to wait , raise money etc. As you say, the time to fruition might be less than cdmaOne took since there is already a lot of general expertise in the CDMA area now extant.
"By feeling they are doing something - I think Ericsson's management has proven that tilting at windmills isn't high on their priority list, as shown by the continued financial success over the last few years."
Yes, but when the shareholders panic over the cdmaOne onslaught, management better have some red hot plan, and pretend they always had it. They know only too well that they can't rest on the laurels of their previous excellence. Being seen to do something is not for the management's self satisfaction, it is to justify their position in the judgement of their employers.
"If they have no wideband system in place in 5 years, they will have fallen drastically from their position as the world's leader. Current configurations of GSM won't be an option for 3G type applications, as they've already admitted, and that is the rationale for a 3G system in the first place. If we you stated came to pass, I'm guessing they would have fallen a bit too far in their customers eyes for "We're
sorry" to work very well ...
But what else can they do? Sorry is all that's left when you go back to customers and shareholders with failed dreams. Your paragraph describes what I believe will be the outcome. Of course it is guesswork. We all place our bets.
"As far as proving the systems really exist... I would imagine we'll get a pretty good indication when the hardware starts getting tested by DOCOMO. Everything else before then is guesswork, on both sides of the argument, unless your an Ericsson employee/spy. I have to prove nothing at the moment. Tom made the claim that Ericsson's system is vaporware. Where I come from, the accuser has the burden of proof, not the accused (Innocent until proven guilty, not guilty until proven innocent, the IRS and tax cases notwithstanding). I also find it hard to put much faith in the "guilt by perceived historical similarity" argument which seems to be the prime piece of evidence presented.
In 1991, Qualcomm was testing live systems in San Diego. It took another 5 years to start selling them. So DOCOM testing will be an indication only. Of course you have to prove nothing, but without proof of something real, the positive, it is fair enough to call it all hot air, wishful thinking, vaporware. Ericsson's former Marketing Director, Frezza used words like fraud, con, scam in regard to Qualcomm's efforts. They really really really didn't think it possible to make CDMA work. Guilt by perceived historical similarity is how we judge much in the world. And rightly so.
Then you get naughty, using slogans to think, like "innocent until proven guilty". The onus of proof is on Ericsson and their agents. Salesmen have the burden of proof. I don't know how many customers you have sat in front of, but I can tell you that if you say "prove it doesn't work!" you will be turfed out of the office in seconds.
"At least one advantage of an Ericsson wideband system is that being backward compatible with GSM, it has a larger installed suscriber base. Depending on the outcome of the Vodaphone trials, this might become only a complexity advantage, i.e. not requiring an extra layer of technology to interface to those same GSM systems. As far as a technical advantage, it's impossible to say until all the systems
are up and running."
Being backward compatible with GSM, the Ericsson system and Qualcomm systems will have the same extra layers. I don't see any advantage here other than that customers probably prefer Ericsson being the incumbent supplier. And that is a vital advantage. Incumbents are hard to displace. Unless somebody comes along with a better mousetrap.
Run Ericsson, run!!
Maurice |
