Thanks, al, it's nice to get positive feedback to counter the sometimes colorful hatemail I keep getting via personal messages... though in some weird way I get a kick out of those, too. Dave, you're right, Europeans have a complex about US and God forbid any French-style knee-jerk reactions cloud any of our investment decisions. But I do think that American high tech hubris was instrumental in CDMA's success in USA - the clear attitude that an European standard couldn't possibly be as good as an American. I think that the decision to divide its attention between CDMA and GSM was the most important factor in destroying Motorola's standing as the leading mobile company and similarily, Lucent and Nortel are missing out on GSM markets. Had these companies realized GSM's current boom in Asia they would have provided much tougher competition to Nokia. Overall, the American decision to go its own way has cost it the global leadership in this field and brought its most important mobile company crashing down. I don't see this as any morality play involving Europe vs. USA but rather as a cautionary example of how global competition means that no country can bank on its former success in related fields to ensure future dominance.
Jim, I do think that the competition for China is effectively over. I don't see how a new standard could overtake the GSM's lead. The big deals made in the past twelve months will be implemented between 1998-2001; the investments simply guarantee a continuation of Chinese GSM boom in the near future. Just like CDMA's success in USA is guaranteed by the massive build-up there. I don't think there is all that much room for divergence in all those projections showing 50% for GSM and 20% for CDMA around 2003. Much of the investments have been locked in. So I don't quite understand the heat generated by a simple statement that CDMA is a niche market. It seems to be supported by available data.
I'm sure there are good reasons to invest in Qualcomm; they could well find a way to leech some profit out of W-CDMA and live a lucrative, though unexciting parasitic existence. But investing in the company in hopes of market share leadership won't fly. And it seems likely that the companies which manufacture the equipment will get most of the profits. There are companies which amass patents and then sit back and collect a toll or threaten to block other companies from making inventive new products. But none of those companies have been particularily good investments in the long run.
Technologically, I have no idea why making W-CDMA compatible with CDMA at this point compromises it, but all of the European articles I've read seem to agree that this is the case. I just have to trust these sources, since I'm not engineer and I'm not really inclined to take Qualcomm's word that it won't be so bad after all. NTT just made a nasty comment today about how problematic it finds Qualcomm's attitude and I really, really think it's a bad idea to piss off that outfit. Qualcomm has now been so hostile towards the members of the extensive W-CDMA conglomerate that I doubt they will just roll over.
Well, if nothing else, this is much more fun than investing in Coca-Cola and debating the fine points of the soda fountain distribution system.
Tero
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