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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Theophile who wrote (11009)	5/28/2001 6:59:52 PM
From: Eric L	Respond to of 197226

re: W-CDMA vs cdma2000 article from Mobile Commerce World Jeff Belk liberally quoted. I haven't seen this clipped here before. Sorry if a dup. >> W-CDMA vs cdma2000: The Technology War 05/21/2001 Mobile Commerce World Recent speculation over conflicting European and US choices of Third Generation technology has hampered hopes of a global 3G standard. But is this concern truly justified? Rachael McGahern gets the lowdown from two leading industry insiders in an attempt to discover the truth. Waging war with opponents across the pond can be a dangerous game, especially when your target has a bigger market share. This point was hammered home during Vodafone's recent ‘wrangle’ with its US counterpart, Verizon Wireless, in which it owns a 45% stake. The question on everyone's lips was would Verizon risk its relationship with the UK giant considering Vodafone has such a notoriously ruthless reputation when it perceives others to be disloyal (as ex-Mannesmann chief Klaus Esser would surely admit)? Jeffrey Belk, Senior Vice President of Marketing at Qualcomm, says that he thinks the speculation about Vodafone aggressively acquiring Verizon was just a "bit of a tempest in a teapot." Discussing press reports on the matter, he comments that there were no issues between the CEOs of both companies as they were very vigorous in denying that there was any type of rift between them. He also points out that both companies were very closely co-ordinated on the issues at hand. Staunch Support Although Qualcomm has been seen as a staunch supporter of the cdma2000 standard - declaring it to be cheaper and quicker to roll out than W-CDMA - Belk appears to be sitting on the fence as he asserts that the company is comfortable dealing with W-CDMA. "We don’t feel that the conventional wisdom of trying to pit them against one another is accurate any more," he says. However, he also states that Qualcomm has a vested interest in both of the standards as the company has signed commercial agreements with handset manufacturers who pay them royalties for multi chip GSM, cdma2000, and W-CDMA mobiles. Qualcomm has estimated that a cdma2000 network cost to an operator of a user consuming 200 megabytes of data a month would work out at $4 for that period - compared with $14 for W-CDMA and $83 for GPRS. "We believe that there are significant economies of scale with the cdma2000 network," he comments. "There are differences between the two: cdma2000 networks are already being deployed and low cost handsets are available. With W-CDMA we are still awaiting the deployment of the first network." Ex-BT researcher and well-recognised 3G pessimist Professor Peter Cochrane does not believe that there are any real, problematic differences between the two standards: "It is not an issue, just a competition - the technologies are the same and they only differ in aspects of the standard." He also thinks that recent concerns are more to do with market protectionism than competing technologies - quite understandable when you take into account the amount of research, time and money companies have invested in W-CDMA technology. Cochrane is willing, however, to state that if there is no compromise between the US and Europe then we will end up with two separate standards and "perhaps no global roaming." Belk points out that this would never happen as Qualcomm is in the process of developing a multi-mode chip - a project he feels will resolve "some of the issues of people trying to put the technologies in conflict." He states that multi-mode handsets will make the question of which technology should be used widely irrelevant. "These handsets will be more expensive though - there was a report done by Strategy Analytics where they analysed traffic in the UK and 95% of mobile use is within the city region. Less than 5% is roaming traffic, so if you think about it consumers don't really need the expensive multi-mode handsets - it is the business traveller. We know that the business person will pay more money for the right tools to get their job done." 3G technology is still very much in its infancy but for those pundits who doubt its demand Belk says that there are explosive opportunities: "If you look at technology since the wheel, the Internet and mobility have been two of the most revolutionary changes we have seen. Now the two are to be married - you just have to look at the dynamics of how quickly the Internet and mobile telephony has grown, and the two are going to marry at speeds much faster than the majority of the world enjoys even for their wired Internet connection." Market Share There are several cdma2000 systems already deployed in Korea, and Japan has announced it will be introducing the technology this Autumn. Additionally, both Sprint PCS and Verizon have announced they will start rolling out cdma2000 in the US from the second half of 2001. "There are also close to 20 operators who have announced their migration to cdma2000 beginning the second half of 2001," says Belk proudly. In Europe the first UMTS system will roll out this year, followed by broader commercial deployment in the second half of 2002. China, however, has announced that it will not decide which CDMA mobile telecom standard it will use until 2002, according to the country's ministry. In contrast to Sprint PCS this is a very coy approach, as Belk points out: "Sprint is getting extremely aggressive in saying it is going to cost less than a billion dollars for a national 3G system in the US. If you contrast that with AT&T Wireless, which has had to go out and buy a lot of spectrum, that is billions of dollars worth of infrastructure. Sprint feels very strongly that they will have their 3G network first. It will be less expensive and they will have a greater selection of handsets. Most importantly they will have a much broader range of services a year or so before its competitors." By adopting an aggressive position in the marketplace Sprint PCS may be forging ahead at a rapid pace, but according to Cochrane the ramifications of having a split in 3G technology would be "detrimental for the industry and the customer," and a situation where "no-one" ends up as the winner. In his eyes, a split 3G world will "probably slow the mobile Internet down or even hold it back five years." Unsurprisingly, Belk takes a much more optimistic outlook: "Competition is an excellent thing," he ponders. "I think the fun part about this transition is the types of devices we are seeing - not only from the likes of the Nokia’s and Ericsson’s but suddenly we are seeing tremendous competition from the Koreans and Japanese." So, despite the myriad of opinions of when 3G will actually roll out, there is one area on which both insiders can reach a common consensus - the debate is not so much about whether cdma2000 is better or W-CDMA is more effective but rather who has the biggest slice of the market to enable 3G to become a reality. - Eric -

To: Theophile who wrote (11009)	5/28/2001 7:28:58 PM
From: gdichaz	Read Replies (2) \| Respond to of 197226

Martin T: There is nothing to be done in the real world to stop Lucent caving in to Alcatel. Sad. The last slight hope for America for CDMA 2000 infrastructure which is independent. What a strange world we live in. Our politicians will defend the "rights" of Alcatel. (Not the Q) To attempt to destroy CDMA as a true competitor is what Alcatel will do as Ericsson has. (But perhaps Alcatel will fail as Ericsson has.) If Alcatel suceeds in this takover, this may well be a tragedy in the fullest meaning of that for the Q. Wish it were not so, but the Ericsson example is there for us all to see. Ericsson refused to even permit the Q infrastructure assets available to gain traction. Alcatel will do likewise with clamps on Lucent CDMA 2000. Therefore the US and the Q will have no repeat no US infrastructure supplier (except the laughingly incompetent MOT) available to advance its systems. (Except for the shoot itself in the foot company Motorala, what a pitiful knight to ride for the CDMA 2000 battle) Perhaps I am wrong, but based on the way Europe operates, I doubt it. Again, hope I am wrong. Comments? Chaz