Eric J, Yes, you are right that Nokia bought into CDMA right at the beginning, which showed excellent judgement on their part. Unfortunately for them, they didn't follow through and have struggled in the CDMA business since. A few months ago they admitted they had blown it and are now going gung ho to get CDMA fixed and going quickly. It was an epiphany on the Road to CDMAscus. As $ill Gates did with the Internet in 1995, when they suddenly realized the Internet was going to be huge and swung Microsoft onto it, Nokia has realized that CDMA is going to be big and will be the Internet delivery agent. Microsoft's mantra is now "Paradigm Shift Happens". Nokia is trying to simultaneously keep GSM the main force, while going like mad to be huge in CDMA, which creates interesting tension for them to cope with. The innovator's dilemma.
A big question remaining is Nokia's 3G license. I am starting to think they think they can get away with using their low-rate [I guess since Motorola had one] early license for future versions of CDMA. The Koreans managed [so far] to get a judgement that PCS and cellular would both provide royalties from QUALCOMM, whereas QUALCOMM maintained the agreement applied only to cellular frequencies. Maybe Nokia fancies their luck on getting a free upgrade to include 3G at low royalty rates?
The denial by Ericy and Nokia about W-CDMA vapourwear [VW-40] needing licenses from QUALCOMM was long and loud [and caved in when Ericy signed up with QUALCOMM]. The GSM Guild maintained that they did NOT need any QUALCOMM technology [we still have that guy in NTT saying such tripe]. They were wrong. Now they are trying to reduce the 5% royalty which QUALCOMM will accept. I wasn't suggesting the Nokia 3G denials were about the early Nokia CDMA license for 2G - just that they denied they needed Q! stuff for 3G.
<DoCoMo set the timetable for the first launch, and they're doing it with NEC's handsets and equipment. Are you saying that DoCoMo and NEC don't want W-CDMA to be rolled out either? >
Far from it. DoCoMo and NEC would want W-CDMA to trample over everything on the planet and do it today if possible. That's why NTT is flat out buying into telecoms around the world and promoting conversion to W-CDMA in exchange for big wads of cash.
They were in the process of doing a joint effort with Telecom New Zealand to buy Optus, but that seems to have failed. Perhaps, among other reasons, because they couldn't get W-CDMA accepted?http://www.nzherald.co.nz/storydisplay.cfm?storyID=167988&thesection=technology&thesubsection=general
Not all of those involved in W-CDMA have the same interest. They ALL share the interest of having QUALCOMM royalties reduced. Some share the interest of creating a deliberately weird standard that is not backward compatible to legacy CDMA systems.
<Even if the higher chip rate was done for political rather than technological purposes (which I'm not sure of given the benefits of a higher chip rate), this has nothing to do with trying to delay W-CDMA. >
The effect of an excessively high chip rate was to cause delays, incompatibility, inefficiency [not as efficient in processing as QUALCOMM's], extra costs on consumers, less battery life due to increased power demand, architectural problems [space and design]. Subscribers will have higher-cost dual mode phones. On the good side, well, there isn't any good side, but it did cause delays and incompatibility, which must have been considered good for some reason. Got any ideas why delays would be good for Nokia? How about continuation of GSM revenues and huge market share if you can't think of anything?
Can you show us anywhere a demonstration of the advantage of a higher chip rate than that for cdma2000? QUALCOMM has shown less efficiency and for some strange reason, the GG [GSM Guild] has agreed to debase their chip rate to close enough to QUALCOMM's so that W-CDMA can run without too much problem in one device. The simplistic notion that high chip rate means more efficiency is wrong. It's a bit like saying thicker oil gives better protection in an engine. Yes, that's true, if only it could be pumped and didn't reduce the engine efficiency and cause other problems. People in Finland probably know that oil gets thick in really cold weather. Heck, diesel fuel can go solid! Wax in diesel is good [until the temperature drops]. A high chip rate is like thick lubricant or wax in diesel fuel = good in some ways but not necessarily optimum.
Anyway, there was a big delay while the chip rate was gradually lowered. Who benefited from the delay? I can tell you it wasn't QUALCOMM. Nokia has sold a world record number of GSM handsets and has achieved an amazing and creditable market share and stupendously huge profits. Nokia is doing brilliantly.
<News flash: Sony, NEC, Panasonic, and Kenwood all sell GSM phones in Europe. Furthermore, in spite of the royalties, they're known as low-cost manufacturers.>
So despite the extorquerationate royalties charged by the GSM Guild, others can successfully make and sell GSM phones. That doesn't surprise me. It is further evidence that QUALCOMM royalties are trivial in the grand scheme of things. Just think of the capacity benefits of CDMA and it is obvious [as shown by the huge spectrum bids in Europe] that QUALCOMM is grossly undercharging for their technology.
So we can conclude that the 5% that QUALCOMM requires won't be a problem. The whining has always sounded weak. While Korea whined, CDMA took off there, even in the midst of an economic disaster which saw the west appear to think Korea had fallen off the map. While Ericy and Noka whined, they were busy getting VW-40 lined up. The low [high in their minds] Q! royalties were obviously not enough to put them off and not enough to slow adoption in Korea, despite all the whining about high royalties stopping CDMA.
<Has it ever occurred to you that Nokia's low market share in CDMA is merely due to the fact that they've never put a lot of attention into this market? Their most advanced CDMA phone right now is from their 6100 line. That says enough. >
Tero used to argue that Nokia was deliberately making rotten CDMA phones; well, if not deliberately making bad ones, certainly leaving CDMA in the second string so that GSM would have top billing. I used to argue that Nokia might as well have top billing in CDMA as well as GSM. Now they have decided that I was right - I suppose I should expect a big management consultancy fee from Nokia for my excellent and obviously correct advice.
It's reasonable to focus on the successful product lines, but the book, 'The Innovator's Dilemma', explains disruptive technology and what happens to companies which fall afoul of the problem. [Thanks Uncle Frank!] Nokia has run afoul of the innovative technology of CDMA and is now in the throes of moving to CDMA, hopefully without crashing in the process. Given their market share in GSM, they are bound to crash. How far is the problem. They tried delay, but the game is up on that. Now they have to face the music and dance, which will keep them warm in the cold Finnish winter.
Sure, the W-CDMA contracts Nokia signs will make them a fortune, but they need BIG fortunes to keep the revenue flowing as it has from GSM. NEC is obviously a force in W-CDMA! There are plenty of hungry wolves wanting a bite of W-CDMA.
On GPRS, Vodafone NZ has it all installed, lined up and stalled, waiting for handsets, which are on the never-never plan it seems. WAP was a failure. Here comes GPRS. I will tell you how good it is as soon as they get it up and running. I am looking forwards to the investigation.
You are saying the bleeding EDGE has bled dry? DOA? Is that what I should gather from your comment?
On Nokia's failure to get a CDMA ASIC up and running [and commercialized successfully] you are surely aware that they ended up buying from QUALCOMM via a licensed supplier? Maybe they can do better with W-CDMA. We'll have to wait and see. The best guide is past efforts.
I didn't see anyone suggest that the W-CDMA ASIC was QUALCOMM's saviour [though it could well be Nokia's]. Of course I was pleased to see QUALCOMM succeed at producing a W-CDMA ASIC. But they have got a LOT going on without it and the royalties alone would be more than enough to keep me happy. So it isn't a 'saviour'.
Mqurice
PS: You can another last word. |
