Hello Gus,
If you don't mind, I would like to discuss this section of one of your previous posts:
<<In the process you deliberately ignored the fact that QCOM has a clear track record of over-promising and under-delivering on the technology. Take a look at this timeline from the CDG. What do you see? >>
1989 - 1st CDMA demo in San Diego
1990 to 1995 - 0 subscribers
1996 - less than 700,000 subscribers
1997 - 7.8 million subscribers
1998 - 23 million subscribers
1999 - 50 million subscribers
2000 - 70-90 million subscribers (est) >>
What I see (based on what you posted):
* Pretty good research on the numbers, but a glaring lack of evidence to support your conclusion of "over-promising and under-delivering on the technology". You might want to spend some time developing this case. I could make a few minor suggestions on the "over-promising" (pre 96), but few on the "under-delivering" therafter.
* I see that it took almost 6 years to go from a CDMA technology demo to commercial launch (Hutchison in Hong Kong in September 1995 followed shortly by Korea) of a revolutionary discontinuous innovation that today appears to me to be delivering on all of it's promises. By contrast it took Groupe Spécial Mobile 10 years to go from conception to successful commercial relaunch in 1992 (of the original 1991 attempt). I do not mean to demean the GSM effort. It was pioneering work in digital mobile wireless, and it is fine, although dated technology, that has a torturous migration path, going nowhere.
Comments: Despite the fact that the US launch of CDMA in US 800 MHZ spectrum was delayed about 12 months - till BAM launched in March of 96 - only one CDMA adopter (Comcast) canceled a CDMA contract before delivery and opted to upgrade analog with TDMA. In actuality, they would have launched quicker, and with fewer problems, had they stayed with CDMA. Worked out though, since SBC purchased them, and that probably precipitated the cancelation.
* I see that CDMA quickly became the fastest growing digital wireless mobile technology in the world, and that it remains today the fastest growing digital wireless mobile technology in the world.
* I see something VERY curious. You are estimating 70-90 million CDMA subscribers year ending 2000. GSMA reports 64.4 million CDMA subscribers month ending May 2000. 70 million will be exceeded July end. CDMA subscribers will exceed 85 million year end.
What I don't see (in the model you developed) but would like to point out are some examples of Qualcomm's exceptional capability to deliver on schedule, satisfy their customers, and satisfy their shareholders:
* 13 kbps vocoder for high quality voice in December of 1995.
* 1900 MHZ PCS-1900 delivery (US 10/96 PrimeCo and 11/96 Sprint, LA 12/96 Telefonica, Peru, Canada 4/97 TELUS & BCTEL Mobility).
* 14.4 kbps IS-95A data delivery in 1998 in Korea followed by 14.4 kbps IS-95A data in US in 1999. On schedule and flawless and fully 50% faster than ANY commercial implementation of GSM today. WAP enabled handsets, no problemo.
* 64 kbps IS-95B packet data in late 1998 in Korea followed by Japan in 1999. On schedule, flawless, and seamless, and 6+ times faster than ANY commercial implementation of GSM today.
* Sampling of 1xMC chips that will commercially deliver shortly at data rates of 144 kbps NOW (not maybe 28 kbps, with 5k kbps in a year maybe, and possibly but not certainly 112 kbps someday theoretically, if a few problems can be overcome).
* Base station cards for seamless upgrade available at same time as above, completely changing the paradigm of how a network upgrade to higher data rates is accomplished, because of the base technology IP network architecture and backward/forward compatability of handsets with an extremely well thought out (not kludged together) migration path. Handsets can and will deliver ahead of complete network upgrade and services development, guaranteeing user satisfaction and dramatically reducing churn. High speed packet data can be turned on overnight (as it was in Korea and then Japan) on a net wide basis.
What I would like to add that I have not mentioned yet, are these facts (?) that relate to over-promising and under-delivering technology in the technology arenas that compete with CDMA:
* TORTUROUS delivery and problems bringing D-AMPS & IS-136 TDMA to market in the US. TORTUROUS! Once working (sort of in 1996) still no data (never designed for in the mobile environment and it was difficult enough to make voice work). Still not your dream digital technology, IMO, but AT&T sponsored the standard and stuck their old divisional RBOC B Carriers, SBC and Bell South with it. Can you site ANY advantages of TDMA over CDMA?
* GSM's promise of DATA and Voice on the ISDN Model. As a practical matter, the data capabilities of GSM phase 1, delivered virtually no data benefits until DCN-1800 (sort of, really mostly GSM with CPHS) launched in 1994 at one2one followed by Orange, and were not really realized at all till phase 2 launched in 1995 with enhanced SMS, and then phase 2+ dragged out a year, and when it was released finally incorporated CPHS (sort of) and the full SIM ToolKit command set was not provided it was a year before the US got phase 2+ phones and so on and so forth and everybody remembers the 1991 GSM launch debacle and the WAP handset thing is a reminder of that and so on and so forth ....
So anyway, after dragging that out, perhaps, if you have time, you could start at the commercial launch date of CDMA in September 1995, and elucidate on your point of Qualcomm "over-promising" and "under-delivering", and back it with some factual references?
I just realized that we are on the Nokia thread, and for that reason this post should have some Nokia content.
Strategis forecasts that the US market for handsets will be 50% CDMA in 2004 (1999 was 32% CDMA, 31% TDMA, AMPS 30%, GSM 7%). This translates in their forecast (which is much more conservative than Cahners In-Stat) to 30 million CDMA handset units in 2004.
The US is a very important market to Nokia even though it may slip to #2 worldwide (behind China)in 2004. This is not only an important market to Nokia from a consumer point of view, but more importantly from an investors point of view.
Nokia finished 1999 with 34.5% US market share in handsets. Exceptional performance & very visible.
If CDMA is 50% handset deliveries in 2004 and Nokia wants to maintain US market share what do you think they should they do to correct the fact that they have virtually no CDMA market presence today (less than 12 months ago) and will not participate in over 36% of handset deliveries (CDMA) here this year? Add to this the fact that Ericsson and Mitsubishi are delivering data enabled (CDPD) ANPS/TDMA handsets to AT&T and Nokia has NO data enabled handsets for this market, and Nokia has no ESMR offering for iDEN and where does that leave Nokia in this market?
Respectfully & have a Great Nokia Day,
- Eric - |
