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To: polarisnh who wrote (70966)	1/5/2009 6:02:38 PM
From: Maurice Winn	1 Recommendation Respond to of 74559

Hi Steve. There isn't a security issue using CDMA2000 because it's just the intellectual property that China needs to buy. They still have to buy the intellectual property at the same price for TD-SCDMA, though of course that would be decided in their legal system which means they would just declare it to not be using Qualcomm intellectual property in sufficient proportion to require any royalty payments to Qualcomm. If push came to shove and there was a big conflict or something, CDMA2000 in China wouldn't be a problem for them. Using the power control, rake receiver, soft handoff and other patents is just gaining access to knowledge. I don't see how there would be a security issue. They could produce their own ASICs if they like, just as they can with TD-SCDMA [but without a large market elsewhere to reduce unit costs]. With CDMA2000 they could produce their own ASICs for national security [like Japan grows their own rice] and leverage their huge home market into exports markets as well. The reason for "inventing" TD-SCDMA is the same reason that the Europeans and GSM Guild "invented" W-CDMA, which was to ring-fence their state serfs, get a piece of the royalty action, and keep out competition and leverage their GSM market onto the rest of the world if they could, charging exorbitant royalties [12% for W-CDMA instead of 4% for CDMA2000]. Qualcomm charged China only about 2% for local CDMA usage and more for exports [because of course there is no control over the thieving in China of foreign intellectual property but exports are easier to control via World Trade Organisation agreements, foreign courts, tariffs and customs controls. With only 2% royalty, it's not as though TD-SCDMA was going to save China anything in local applications and they won't be selling any of that muck overseas. China passed up a vast opportunity, probably because Bill Clinton's military bombed the Chinese embassy in Belgrade. Huawei is doing well and might still have huge success worldwide, but it would have been so much easier for them if they had CDMA2000 across China in 450MHz and 800MHz with OFDM coming on stream too as multimode. They could have been leading the world as Korea has done even with their relatively tiny market. Gung Ho, Mqurice