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

To: Neeka who wrote (29162)	11/20/2002 12:27:43 PM
From: Neeka	Respond to of 197297

China Throws Wrench Into Telecom Battle By Dow Jones News Service Dow Jones News Service, Nov 20 2002 A ticket to compete in China's vast wireless-phone market just got a lot more expensive for global telecom equipment makers such as Motorola Inc. China already is the world's largest cell phone market, with 180 million subscribers and growing. As it prepares to lay down new cutting-edge phone networks using third-generation, or 3G, technology, the stakes for equipment vendors have become enormous. Companies such as Lucent Technologies Inc., Motorola, Ericsson and Nortel Networks Corp. have invested billions in developing technology for the world's two prevailing 3G standards. But in recent days, Beijing has thrown new weight behind a third, homegrown standard for 3G, called TD-SCDMA. That could send the plans of the foreign equipment makers into disarray, forcing them to sink billions more into a new, unproven technology with an uncertain market. For an industry already contending with huge drops in revenue, depressed stock prices and massive losses, the news couldn't come at a worse time. "We don't have that product developed right now," said Lucent's director of China market management, Rose Miller. Instead, the Murray Hill, N.J., company, like many of its competitors, has been pouring its research and development budget into the standard developed primarily by Qualcomm Inc. of the U.S., CDMA2000, and a European version known as WCDMA. A Qualcomm spokeswoman said the San Diego company "holds the essential intellectual property for CDMA technology including TD- SCDMA," adding that the company draws license fees for TD-SCDMA and has already signed more than 40 license agreements with major manufacturers including Nokia Corp., Motorola and Siemens AG that cover the new Chinese standard. With 3G still in its infancy, few equipment makers have seen significant returns on the billions they have invested in these standards so far. But if China decides to adopt the third standard on a wide scale, Lucent and others might be in a tight spot. Motorola, the world's second-biggest supplier of cell phones, said it has been researching TD-SCDMA, and if China decides to go that route, "then we will go in and support our customer," said Ralph Pini, chief technologist for the company's handset division. The one non-Chinese company that could come out ahead is Siemens. The German firm has been the lone foreign company heavily involved in TD-SCDMA, and has already invested $200 million in the technology. It recently pledged to invest about $49 million more over the next year. Motorola and Lucent "clearly have a competitive advantage in CDMA2000 and Nokia and Ericsson have an advantage in WCDMA," said Tim Luke, a wireless equipment analyst at Lehman Brothers. "Since TD- SCDMA is totally new and developed primarily by Siemens, it's more challenging" for everyone else. This is precisely the situation that companies like Finland's Nokia had sought to avoid. Nokia spokesman Thomas Jonsson said the company has no plans to develop products for the third standard, describing the Chinese technology as immature and unsuitable for large-scale networks. Should China decide to adopt TD-SCDMA, it would be some time before it is ready to roll the system out. Siemens estimates that complete TD-SCDMA systems will be market-ready by the middle of next year; others put the date even later. thefeature.com