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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: kech who wrote (25305)	3/27/1999 9:11:00 AM
From: Ron M	Respond to of 152472

Story from the SD Union Tribune 'Wireless Valley' breathes a sigh of relief Qualcomm-Ericsson pact stems battle over technology standard By Bruce V. Bigelow UNION-TRIBUNE STAFF WRITER March 26, 1999 SAN DIEGO -- The Qualcomm-Ericsson pact announced yesterday represents a turning point for the wireless technology that Qualcomm pioneered, and assures a bright future for San Diego's "Wireless Valley," experts say. Companies closely tied to Qualcomm's proprietary CDMA technology will be able to breathe a little easier now, said Vicki Marion, president of the San Diego Telecommunications Council. That includes such San Diego-based suppliers of wireless components as Japan's Denso Corp. and Korea's LG Group, along with wireless service providers such as GTE Wireless and Sprint. "The gut-level fear that everyone had was that Qualcomm, as one of San Diego's largest companies, would get trapped" in a protracted and costly patent dispute over its technology, Marion said. Before the deal, Ericsson was supporting a wireless standard that primarily benefited operators in Europe. Qualcomm's code division multiple access, or CDMA, technology, while available in the United States, was excluded from Europe and other global markets. In recent years, efforts to reach a global accord on the so-called 3G standard have been threatened by what some analysts describe as the wireless industry's "holy war" over rival, incompatible technologies. So for many observers, yesterday's agreement may be most significant for the potentially devastating problems that Qualcomm avoided by striking a truce instead of going to war. "There has been a fierce, fierce battle going on over what the standard was going to be, and had Qualcomm lost, it would have meant giant markets would have been lost for them," said Mayor Susan Golding. Added attorney Mike Krenn, the telecom council's executive director: "I think people in San Diego see Qualcomm as this giant behemoth, but I don't think San Diego understands how small Qualcomm is in comparison to Ericsson and Nokia. The litigation could have gone on for years." Another clear beneficiary among local companies is Leap Wireless International, the Qualcomm spin-off linked closely with Qualcomm and its CDMA technology. Leap is installing wireless networks in several areas of the world, but its growth has been hemmed in by the dominance of rival standards known as GSM and TDMA, which are dominant in other regions. That could change, however, if Ericsson adopts CDMA in next-generation wireless devices. "It expands the range of places where CDMA will go quickly," said Harvey White, Leap's chief executive. Perhaps the most significant aspect of the deal is that it clears the way to establish a new worldwide standard for the technology that will be used in the next generation of wireless phones, computers and other devices. "Once the standards are resolved, the market opportunities increase," said Julie Meier Wright, president of the San Diego Economic Development Corp. She expects to see Qualcomm's opportunities for new business expand dramatically around the world. "A consolidation of standards will move our business forward much more quickly," said Martha Dennis, chief executive of San Diego's WaveWare Communications. WaveWare, founded in 1997, has been developing an electronic gadget that uses wireless technology to transfer data from computers. Like many companies, WaveWare is anticipating the next generation of wireless technology will offer a much bigger "pipe" capable of carrying a flood of data for video, Internet access and multimedia, among other things. CDMA has long been recognized as the better-suited technology for providing a larger bandwidth, said Anthony Acampora, director of the Center for Wireless Communications at UCSD. Now it's clearly become the foundation for the third-generation standard being worked out for wireless communications. "CDMA has basically hoed a tough row since its early days," Acampora said. "Most of the claims concerning CDMA have been validated. The dire consequences that were predicted by naysayers never materialized. It's a major technology for the wireless industry today and for the wireless industry of the future."