Qualcomm Inc (QCOM)

[khemara_qc]

Nokia ramps up CDMA push
By Aloysius Choong, CNETAsia
Thursday, April 29 2004 5:40 PM



Mumbai, INDIA--Nokia is hoping to make up for its slow start by intensifying efforts in the CDMA handset market.

Despite taking a dominant position in mobile phones harnessing Global System for Mobile Communications (GSM), the most widely-used cellular standard today, the Finnish phone giant has lagged behind in the Code Division Multiple Access (CDMA) arena, where it trails hard-charging rivals Samsung and LG of Korea as well as US-based Motorola.


"In the initial phase, we misjudged the depth of the work. We just misjudged how different it was from GSM," admitted Larry Paulson, Nokia's vice president for its CDMA Business Unit.

In addition, he said Nokia's CDMA ambitions were hampered by the firm's decision to develop its proprietary CDMA technology as opposed to licensing from others.

"We would not source Qualcomm's chipsets. We would do our own. That probably piled on two years to the effort," Paulson told CNETAsia.

The San Diego-based executive believes such hiccups are behind Nokia now.

"We've got the portfolio in nice shape," he said.

His belief was bolstered yesterday by Nokia's launch of two new CDMA2000 1X models in India, where CDMA operators Tata Indicom and Reliance Infocomm are also gathering momentum. The entry-level 2112 comes with features such as polyphony and picture messaging, while the Nokia 3125 has a color display and supports multimedia messaging service (MMS).

Both phones will be available in selected Asia-Pacific countries in the third quarter.

At the event, the company also unveiled a new CDMA research facility here. With an initial headcount of 30, its primary focus will be on providing local software support and technical expertise in CDMA technology.

The center is expected to grow "exponentially", with staff numbers hitting the "low one hundreds" within the next three years, said Paulson.

Nokia's CDMA drive comes at a time when it is showing rare signs of weakness. The company recently posted lower than expected revenues in the first quarter, losing ground on its target of a 40 percent market share. It has also been criticized for the slide in the average selling prices of its handsets.

But according to Paulson, Nokia's CDMA division is faring better. The company estimates that it doubled its share in the CDMA handset market to 17 percent in 2003, up from 8 percent the year before. Nokia previously said it aims to garner a 25 market worldwide share in the CDMA handset market by 2005.

To meet that target however, Nokia will have to do without CDMA hotbeds South Korea and Japan. The firm has no CDMA presence in these two countries and plans to keep it that way, Paulson said.

"Korea was extremely dominated by the local Korean manufacturers," he said. "We watched some of our American and European competitors go in there and make some acquisitions. None of them met with success," he stressed.

"We just made the decision that we would be better served by CDMA markets where we had branding, distribution as well as sales and marketing organizations, rather than trying to start them in Korea," Paulson explained.

In Japan, where Nokia has released third-generation wideband-CDMA phones, Paulson went through the same evaluation process and came to a similar conclusion.

"I don't have any second thoughts about those decisions," he said.

CNETAsia’s Aloysius Choong reported from Mumbai


http://asia.cnet.com/newstech/communications/0,39001141,39177482,00.htm