Qualcomm's Prospects Aren't So Shrunken
Perhaps I should be pleased with "Hanging up on Qualcomm" (News: Analysis & Commentary, July 24), since it is a mark of the success of CDMA that many now claim to be its parent.
W-CDMA, the so-called European standard, is in fact based on Qualcomm's inventions and is a revolutionary change from the TDMA technology used in GSM in Europe. Qualcomm Inc. has a large and growing pool of CDMA patents, applicable to voice and the increasingly important business of wireless Internet access.
Although others have expended considerable efforts to work around a small number of our patent claims, with a measurable negative impact on performance, our patent coverage of the standard is ubiquitous, and W-CDMA manufacturers will need a license from us. We are extending our licenses to W-CDMA with the same royalty rate that applies to CDMAOne and CDMA2000. Many leading manufacturers have already signed up, and more will be announced soon.
South Korea has been and remains a crucial market for Qualcomm. CDMA remains an important product to Korea since it is now a major export for Korean manufacturers. Korea will be the first nation in the world to field a commercial third-generation system. The reference to "dumping of Qualcomm technology" refers to the technology choice for new spectrum yet to be licensed. I doubt that there is any intent to use TDMA or another "XDMA" in Korea's third-generation systems. Thus, no dumping will occur, and users of the new spectrum will also benefit from Qualcomm technology.
Rather than concern about our "prospects around the globe looking increasingly shrunken," I am kept awake nights by concern that W-CDMA will be delayed or not work well, and thus the upgrading of the whole world to CDMA, whichever flavor, might be delayed where CDMA2000 is not selected.
Irwin M. Jacobs
Chairman and CEO
Don't get confused by the recent "noise" from Korea regarding CDMA2000 and W-CDMA. The carriers are talking about using W-CDMA for new spectrum that has yet to be auctioned off. The media are reporting this as "Korea switching from Qualcomm technology to the European standard." No one is switching.
Many involved in the negotiations agree Korea will probably end up with both CDMA2000 and W-CDMA networks. The fact that two Korean carriers will begin service on their CDMA2000 networks this fall is proof that Qualcomm's technology will exist in Korea for many years to come. In fact, the real question is why Korea would even need new spectrum. The country is 60% saturated, therefore 2X voice capacity would cover every human in Korea and a few pets as well.