Consortium To Attack Qualcomm Juggernaut
Qualcomm has a lock on the CDMA chip business, with 90% market share. In an environment of rapid mobile phone sales, many competing chip makers let QCOMM dominate that market without a fight, but the increasingly competitive global market for GSM chips has renewed interest among others to try to take a piece of QCOMM's pie. Now, Nokia, ST Microelectronics, and Texas Instruments are partnering to attack the CDMA chip market together. This makes a lot of sense for multiple reasons: i) QCOMM has been charging high royalty fees in this market, making it more attractive, ii) when 3G W-CDMA rolls out the last thing competitors want is for QCOMM to have ALL the CDMA experience; they need to develop CDMA competence, iii) CDMA sales can alleviate lower-than-expected 3G sales, iv) Nokia has already tried to make CDMA chips by themselves with limited success (carriers bought the terminals once, but stopped after the terminals performed poorly). Nokia appears committed to do it again, and do it right. They demonstrated how serious they are about the CDMA market with the surprise announcement that the Finns would build a BREW-enabled handset for Verizon Wireless. Nokia is a Java supporter and would normally be anti-BREW, but a smart company avoids standards-zealotry and goes where the customers are.
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