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To: Gregg Powers who wrote (15788)	9/30/1998 12:14:00 PM
From: tero kuittinen	Read Replies (3) \| Respond to of 152472

I'm going to make an exception and refrain from ad hominem attacks just this once - it makes me feel morally superior. Can I point out that Nokia has been doing research on W-CDMA handsets for nearly ten years now? I would expect that they know how to build these things. Current CDMA phone manufacturers do not have the basic digital handset expertise and know-how Nokia has - just compare the Motorola and Sony GSM phones to Nokia's. Like I've said, the quality of phones reflects the money spent in R&D. There is now massive investment in W-CDMA gadgets both in Europe and Japan. And W-CDMA phone manufacturers Nokia and Ericsson have a proven track record of being so good at digital phones that they are currently world's number one and number two companies in this field. The fact that W-CDMA is the optimal third generation solution tells us nothing about what is the optimal second generation solution (GSM versus IS-95). In any case, even if IS-95 had been the optimal second generation standard, they would have to have launched it in 1993 to provide a real alternative to GSM. It's too late to catch up all those years and all those billions spent in GSM R&D. All my best, Tero

To: Gregg Powers who wrote (15788)	9/30/1998 12:35:00 PM
From: dougjn	Respond to of 152472

Gregg, that was a brilliantly reasoned and written piece. First rate. What it really addresses though is the likelihood that CDMA will continue to prosper, and in fact much more so. You have elsewhere made compelling arguments as to the strength of Qcom's patent thicket. And have also been convincing that Ericy and its allies massive PR offensive against Qcom actually further demonstrates the strength of Qcom's patent position. I buy all of that. (Although I'm still uneasy that Qcom has so few allies in the third generation Wide CDMA battle. I understand why -- everyone wants to pay lower royalties to Qcom. But I still worry a bit.) But having said that, I buy your argument that Qcom is in a very strong royalties position. What does worry me though is Tero's arguments about Noka and Ercy (I would say esp. Noka, as he does) handset manufacturing advantages. That is the argument you don't really address, other than to convincingly argue that these issues won't lead to CDMA not growing strongly. What I'm trying to say is that there does seem to be a danger that Qcom cannot really catch up in handsets. And that while CDMA prospers, and Qcom collects royalties, Noka makes most of the handset profits selling better CDMA phones? (This of course would be a much more limited victory for Noka than Tero posits.) Qcom has not arranged its cost structures to be a research and royalties lab only. Nor only that plus asic designer. That's what I'd really like to hear you address head on. Doug