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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: marginmike who wrote (86915)	11/10/2000 11:19:05 AM
From: waverider	Respond to of 152472

The Future of Wireless -------------------- (This is the piece I just wrote for a local corporation's newsletter in my efforts to explain the difference between CDMA and TDMA and to encourage them to switch to a CDMA carrier. Thanks to a few friends here who helped to edit.) Rick -------------------- ``The results will be the creation of a ubiquitous, high-speed mobile Internet lifestyle, allowing any type of information to be accessed anywhere at any time by any device.'' - Don Schrock, president of QUALCOMM CDMA Technologies Specifically, Schrock is talking about the wireless technologies that Qualcomm is currently developing based on a wireless technology called CDMA. Generally, he was providing a hint that the currently dominant wireless protocols (GSM promoted by Nokia and the European community and TDMA promoted by AT&T) will not be able handle the demand for the data rich services we will all come to expect in our wireless future. Corporations are going to be facing a critical choice over the next year in terms of their ability to connect with the wireless economy. Will they continue to use technologies that are quickly becoming obsolete or will they take the jump and adopt CDMA to help them compete in a rapidly changing world? This choice is easy for some because is does not require an alteration of previous plans or admitting mistakes in current capital expenditures. Wireless service providers such as Verizon and Sprint in the United States are at the forefront because they chose CDMA in the beginning (with Sprint being exclusively a digital provider as opposed to Verizon which still maintains an analog wireless service). With the next generation of wireless technology (termed 3G) dawning quickly (providing the transmission of data at 2.3 megabits/sec.), these companies will only be required to make simple software changes in the first phase of 3G rollout. Later, simple backbone modifications to their infrastructure and new channel cards at base stations will be required to provide 3G service. Sprint will be taking the first step in this direction with the rollout of 144 megabits/sec. service the second half of next year. Korea is rolling the service out now. However, companies currently using TDMA such as AT&T will have to rip out their entire infrastructure backbone and install new CDMA infrastructure to provide 3G services because TDMA is incompatible with any of the accepted 3G standards based on CDMA technology. In a desperate attempt to catch up, the company as well as several European and Asian corporations, have invested huge amounts of capital trying to develop short term upgrades (called GPRS and EDGE) they hope will provide data rates similar to what CDMA can provide between now and 3G. Unfortunately, the fixes do not work. These efforts have yet to produce a viable working model for consumer use. In the mean time, Qualcomm is rolling out chipsets now that can transmit 144Kb. TDMA/GSM technologies will be lucky to even get near this rate any time soon. Why will it be so difficult for non-CDMA service providers to move to 3G? The reason is simple; the worldwide 3G standard is based on Qualcomm’s CDMA technology. In an attempt to have some economic control over this standard, several companies including Nokia in Europe and NTT in Japan, have been trying to develop their own CDMA standard called W-CDMA. The problem here again is that they have yet to develop a working model. W-CDMA is more of a political animal than a technological goal. Regardless, Qualcomm’s CDMA patents remain at the core of their efforts. Despite the incredibly complex nature of wireless systems, there is an easy way to get one’s arms around it all. It would be helpful to use the cocktail party analogy Qualcomm’s CEO Irwin Jacobs conceived some time ago to explain it all. The Smith’s, being a friendly couple, invite over all their friends to celebrate the opening of a nature study preserve in their backyard (which will later be used as a retreat for exhausted executives). People arrive and start pairing off for conversations. As the conversations accumulate each person talks louder and louder in order to be heard. This does not do of course, so Betty disperses her guests into different rooms (channels) of the house. Each conversation pair now has complete silence to communicate. This is what is done in the old analog mobile systems in which a pair of narrow frequency channels is dedicated to one pair of users. However, due to the Smith’s popularity, more people arrive at the party. Betty is running out of rooms (channels) so she tries another plan. She decides to allow three pairs of party talkers into each room but this time each pair must take turns to talk (time slots). All three pairs can communicate, but they must take their turns. Every ten seconds or so one pair talks while the others are silent. Trying to be more efficient in less time each talker talks faster. While waiting the others try to come up with code words that have the same meaning as long sentences. This is TDMA, or time division multiple access. Things work out fine until more guests arrive. Betty is beside herself until Ken comes up with an elegant solution. "Bring everyone back into the living room again!" "What?" Betty exclaims. "Yes. Since all our friends are rather cosmopolitan they all know different languages, right?" "Well, if you say so Ken," Betty replies with a rather quizzical look. "We can allow each pair to talk quietly and simultaneously in the same room but this time each pair will use their own unique language. You and I can speak in English, Bob and Joan can speak Spanish, etc." "Brilliant!" Betty screams and hugs Ken while everyone in the room cheers. The party is saved! This is CDMA, or code division multiple access, developed by Qualcomm. Everyone can hear AND understand the signal meant for them. This way more pairs can talk at the party (frequency) than would be possible with the previous methods. You should now understand why future phones based on TDMA will have a tendency to over heat (more power is required to achieve gains in data rate…up to eight time slots are banded together). The high frequency of dropped calls on the current TDMA system is what happens when conversations overload the system. Coding messages into different languages as CDMA does creates "virtual silence" because listeners can easily filter out the languages they do not understand. This silence is used to increase the capacity of a CDMA wireless network seven to eight times over a TDMA system. This is why CDMA operators do not have to bid billions of dollars for more spectrum from the government because their system can handle the demand. Consequently, several large TDMA operators including Nextel and Bell South are considering tearing out their TDMA network now and replacing it with CDMA. That way they will not have to replace their infrastructure twice; once to adopt the proposed TDMA fixes and again to offer 3G. As wireless customers, it is important for businesses to find the proper wireless provider who is capable of offering the best in cutting edge technology and can offer efficient upgrades in the future. Qualcomm’s strategy for a seamless transistion to 3G (from the current 95B equipment to 1X then 3X) is to provide chips for customer cell phones that are both forward AND backward compatible as the different phases of 3G come into play. New CDMA handsets will be required to achieve the new capacity gains and new data rates, but earlier versions will still function on the network. Unfortunately, TDMA/GSM customers will have to obtain new handsets during each phase of the 3G rollout to communicate at all and continually suffer poor performance when compared to a pure CDMA service. With the world economy changing at break neck speeds it would be prudent for businesses to adopt a CDMA service provider sooner rather than later.