Hi Maurice,
I don't think that W-CDMA's success will profit Qualcomm much. It means that the standard designed by Nokia and Ericsson will unify the European and Asian markets and it will be excedingly hard for companies that haven't done extensive work on W-CDMA to jump aboard now. It appears that Qualcomm has decided to attempt to block W-CDMA entirely or force it to be corrupted by lowering the chip rate. This aggressive, hostile attitude fits pretty well the established pattern previously shown by forcing Nokia and Motorola to design their own chips by making excessive licensing demands. That earlier demand backfired in a big way, slowing down the technological progress of new CDMA handsets. I think there's a real chance that Qualcomm is once again alienating most of the international telecom community by playing hardball. It's not Qualcomm vs. Ericsson. It's Qualcomm vs. Ericsson, Nokia, Alcatel, Siemens, NTT-Docomo and the big Japanese telecom companies. Nobody but Qualcomm has backed the lower chip rate.
I've now read three recent projections stating that around 2003 50% of global subscribers use GSM and 20% use CDMA. I simply don't understand why people in this thread make totally unrealistic predictions of CDMA's growth. That 20% share by CDMA is an optimistic scenario that does not take to account the Korean and Japanese recessions and GSM's surprising strength in China. There is every reason to expect that the real figure might be 15% or lower, if Asian countries don't show the expected CDMA growth. Some people may claim that it doesn't matter that Korea was supposed to be growing at 7% annual clip and it is now contracting by 4% annual pace and Japan is sinking deeper by day. We'll see about that.
European GSM subscriber base is growing steadily at 45% annual pace, Chinese 18 million current GSM subscriber base is exploding at well over 100% rate. China has made multi-billion GSM expansion deals in recent months. If China's slowing growth forces it to scale back on telecom expenditure, guess what gets the ax? The already signed GSM deals or the up-in-the-air CDMA plans? There is every indication that GSM will be overwhelming nr. 1 in 2003.
Add to those GSM operators upgrading to W-CDMA the Japanese and Korean W-CDMA users that will come online despite the fact that there is no GSM in those countries and it becomes obvious, why nobody outside US really wants to debase the W-CDMA standard by making it compatible with IS-95. The W-CDMA market simply doesn't need US that bad.
The announcements backing W-CDMA made by Korean companies have been interpreted in this thread as meaning that the W-CDMA *has* to be compatible with IS-95. Huh? Is there any evidence of this? Koreans are simply forced to embrace W-CDMA, because it already has massive Asian support. They can't afford to be left out, even if their current standard won't be compatible with W-CDMA. I said here six months ago that Korea will support W-CDMA compatible with only GSM and that is precisely what they are doing. If this isn't a slap in the face for Qualcomm, I don't know what is.
Compaq, Apple and Microsoft are excellent examples of companies who were succesful because they entered they fields early. Microsoft's competitors show what happens to companies who miss the boat and attempt to catch up later. Apple is a great example of what happens to a good company that cannot get over 10% pf global market share in a cutthroat high tech market. It get's splattered all over pavement like so much roadkill. Qualcomm will compete for a fraction of the 20% CDMA has of global handset sales in 2003, it will end up with perhaps 4% of global handset sales if it gets real lucky. It's suicidal for this company to pour so much money into handset manufacturing, when it doesn't have even a prayer of reaching meaningful production scales.
And how is Qualcomm's voice recognition program doing, BTW? When will it get the voice dialing into market? How well is it handling the challenge of making handsets delivering moving video? How about wireless connections to printers and PC's? Nokia and Ericsson are miles ahead and with their cash flow they will stay there. The tactic of being a handset manufacturer, network equipment manufacturer, operator and designer of new standards is insane for a company of Qualcomm's size. If they had found any focus at all they would be trading at 100 dollars by now. Instead, they have maximed their exposure to problems in all fronts. Now their fortunes are riding on taking on a dozen of the wealthiest and most powerful European and Asian telecom companies. Once again, it's all or nothing, Qualcomm vs. the universe. Well, good luck. This Irwin guy that gets such lavish praise on this thread may indeed be the reincarnation of Edison, Gandhi and Elvis all rolled into one. But judged from the way he runs his company he's also a compulsive gambler.
Tero
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