Happy New Year, everyone!
Go ahead and kick me, George... when the Chinese government standard decisions and European Patent Office opinions on certain CDMA patents become widely covered in US press, you're going to need all the stress relief methods you can muster.
As most of you know, my opinion on CDMA patents has all along been that the picture is murky and anything can happen. Gregg and co. are on the record saying that there is no way Ericsson can win. It's probably a relief to everyone involved that we may be near a situation where this dispute is resolved. The most likely outcome seems to be a draw - either CDMA patents are so bitterly contested that TDMA will be the heart of the new 3G standard or Qualcomm will be forced to accept low licensing fees / a chiprate they do not accept. This company has a lot of promise on some fronts and it will probably become a good buying opportunity if they lose the 3G fight. They have invested so much of their credibility on having all the negotiating power in their hands that any lost patent disputes will probably have immediate repercussions.
As usual, too much energy was wasted on 3G and too little on things that really matter. Such as quality of products already on the market
and future prospects of manufacturing. I think that the past record of Qualcomm management is indisputable - weak marketing, quality problems, disastrous pricing (remeber that 500$ Q-phone?), painfully slow technological development. I think that the rate of improvements in Qualcomm handsets has lagged the industry by a considerable margin. Dataquest says that Qualcomm's marketshare is in freefall. In 6-9 months we'll see who is right and who is wrong. Maybe it's better to stop this debate until next summer.
There was a consensus on this thread that 1998 would be a make or break time for Qualcomm as a handset manufacturer. I still believe that was true - most other people seem to have moved the goalposts and are now saying that 1999 is the crucial year, after all. Perhaps they are right. If CDMA is finally starting to implement data into phones as someone wrote on this thread, if the technical specs come closer to GSM quality, the competition can still tighten. It seems likely to me that if Qualcomm was not able to make use of the considerable advantage it had over other handset companies in 1997-1998 it is unlikely that they can compete now that the first serious CDMA phone compeition is arriving.
So I'll once more make firm predictions that can be reviewed next summer/autumn. Motorola's CDMA Startac will grab most of the upmarket CDMA phone buyers. Q-phone will face relatively slow sales as it is crushed between expensive Startacs and moderately priced Nokia 61xx CDMA models next spring. The older Qualcomm models will have the least competitive performance/weight ratios around. As a result, Qualcomm's market share in USA will slide below 5% by next autumn. Sony and Samsung can't build the kind of brands that would allow them to break thorugh the 10% share barrier.
The growth of GSM and TDMA subscribers will remain far stronger than was anticipated. The new Motorola V series in the spring and Nokia
88xx series in the summer are the year's hottest luxury phones. They are launched initially in GSM and TDMA formats, driving upscale consumers into these standards. CDMA can't offer the handset quality and variety that creates the same kind of buzz and interest. pdQ will reach a certain following, but being underpowered, expensive and a bit clunky, will not get beyond a niche hit status. Ericsson's new models arrive during summer. They are badly late, but pretty sensational. Together with V series and 88xx they will be the most talked-about models of the summer. In the autumn, the first Bluetooth and Symbian models will start revolutionizing the handset market. Debuting in GSM and TDMA. After 3Q results, Nokia will have performed better than Qualcomm in the 9-month period.
Critics and other assorted kickers - put your money where your mouth is and challenge these assumptions. Commit yourself. Tell me how CDMA will succeed in China during 1999, George. Come on... I want to hear your vision.
Then we'll discuss the concept of "credibility" next autumn.
Tero
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