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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Lurgio who wrote (4556)	5/3/2000 1:47:00 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 34857

siliconinvestor.com David Zgodzinski wrote this "Threadtalk" column, extracting various correspondents' comments. He made his own comments, getting some wrong: <The Europeans are pushing W-CDMA because it builds on the current GSM technology, which is used throughout the continent. This single GSM standard has fostered the rapid deployment of wireless telephony in Europe. > As Tero says, it is NOT the Europeans pushing W-CDMA. Check out that big, non-European company NTT DoCoMo from Japan. As well as various others. It is mostly European companies but the factor they have in common is their interest in legacy GSM systems or ring-fenced markets. It is not their nationality, culture nor their DNA. It is their simple avarice, which humans have in plenty all round the globe, even if it damages consumer interests [and sometimes even their own long-term interests]. Neither are they pushing VW40 [W-CDMA or DS-CDMA or DS or whatever they want to call it] because it builds on the current GSM technology. MC-CDMA [nee cdma2000] also builds on the current GSM technology, since in overlaying GSM networks it would use the GSM core [basic layers or whatever they are]. Vodafone has already done GSM overlay trials with CDMA and they worked fine [in Newbury, England]. The VW40 crowd claims to be basing their standard on GSM, but they are really just making their CDMA standard a little different from MC-CDMA to ensure incompatibility with the hope of getting some exclusive marketing advantage and profits from IPR and to whittle away QUALCOMM's royalties and competitive position. Neither was the single standard GSM responsible for the cellphone demand in Europe. It helps a lot to be able to use a phone widely, but calling party pays, expensive wired phone service, good quality low-cost handsets with innovative design [such as Nokia has been strong on producing], good battery life, good voice quality etc, etc were the predominant reasons. The USA was a laggard because of the absurd idea of having the person receiving a call from somebody having to pay for it [so people left their handsets turned off, claiming that it was to save battery life, which was also true because the useless analogue systems drained the battery fast]. In countries such as New Zealand, Australia and elsewhere where various options were available, the rate of growth of cellphone demand was very high. It's always tempting to think that a single variable can explain something, but it is usually not the case. Tero always argued that GSM did well despite the CDMA spectrum efficiency because of those variables and he was quite right! Nokia kept moving the goalposts and CDMA struggled to catch up. I was surprised how far and fast the goalposts moved, but they have reached a dead-end now. The day of reckoning for GSM has arrived with the UK spectrum auction. The day of reckoning for the choice between MC-CDMA and DS-CDMA is drawing close as the pressure goes on DDI and NTT in the Japanese 3G spectrum and WWeb battle. Jim, DDI is NOT useless and their management is showing the industry they do know what they are doing. They are taking QUALCOMM and suppliers to the deadline to maximize pressure; "If you don't give us a discount, we'll go with W-CDMA". Q! has called their bluff. "Well, what we've offered is the best for you in MC-CDMA so if you don't want to buy it, we'll go for spectrum and do it ourselves". We'll soon know who is 'chicken'. My bet is an 11th hour negotiated agreement and DDI will suddenly agree that MC-CDMA is just an eensy bit better and they'll go with it. The DS-CDMA people have tried to lever the royalties down from Q! but Q! quite rightly tells them, "No discount". Nokia is out on a limb. Tero is out on a limb [get off my limb Tero, I was there first]. There is going to be a LOT of fun soon. Watch Vodafone UK for the first big action [which presumably won't happen until after Germany and other European spectrum rights are settled]. Then DDI in Japan. You know, as Tero says, CDMA handset makers are not making money because of the serious competition with 40 something licensees. Perhaps QUALCOMM should tell Nokia that they will not sell Nokia a 3G licence for CDMA and neither will they supply them ASICs for 2G anymore, since Nokia is making a fortune in GSM and doesn't need Q! stuff anyway [not for W-CDMA or anything!!!]. Yeah, that would be fun. Nokia could make their own sandpit to play in and not deal at all with Q! since Q! is allegedly so greedy and bad. Mqurice