Michael:
When people start talking about first, second, third or tenth generation, and spouting techno babble about IS-136 or GSM or CMDA, it's easy to forget why CDMA exists. Capacity gains from IS-136 are barely exceeding 2x analog and offer miserable voice quality as a bonus. GSM is more robust and technically mature, and may actually reach 3x analog in certain deployments--but, let's face it, GSM's current air interface is inferior to its network architecture (hence the opportunity to do a CDMA overlay). Right out of the box, CDMA achieved 6x-10x analog, and the metrics are improving steadily. Bottom line: you might teach a pig to dance, but in the final analysis, you don't get a ballerina, you get a dancing pig....
Motorola's engineers understand the physics and the long-term economic differential between TDMA-based Iridium and CDMA-based Iridium. Conceptually, it's really that simple. MOT's CDMA implementation has struggled with software issues and certainly lagged Lucent's and Nortel's, so its not surprising that MOT's first iteration was based on tried and true internally developed technology. But, in a capital intensive business, cost-per-minute will ultimately drive economics and service marketability. I suspect that this reality is motivating the new thought process at Motorola.
People to think in bi-polar terms; either GSM wins or CDMA wins; coexistence is futile. But remember, only recently have certain operators really throttled back on analog investment. Technology cycles take longer to play out than most pundits predict--look how long people have been expecting the death of the mainframe computer. CDMA is more spectrally efficient than TDMA, the cost of CDMA equipment continues to decline, implementation alternatives are expanding, and the technology will gain marketshare steadily over time. The inevitabilities attached to this analysis are the basis of an excellent long-term investment in Qualcomm. In the short-term there will be ups, downs, surprises good and bad, and people panicking in and out of the stock. I know a lot about this psychology, having invested in Microsoft's IPO. In the early days, pundits were constantly predicting what IBM (or DEC or fill-in-the-blank) was going to do to eliminate the company's DOS franchise. During this period, some pretty sexy "story stocks" came and went, but MSFT remained the only hundred-bagger in the group.
Best Regards,
Gregg |
