The "better mouse trap" is called W-CDMA, which European telcos have found through their own court system belongs to QCOM as well. As far as QCOM not being able to meet demand for current chipsets hence the need for another supplier, that's not true. QCOM is not supply constrained. They have in fact at times over the past year told their fabs they will not be using all available lines. QCOM uses multiple fab houses and if the demand was there, they could meet it. The bottom line is, no other chip co. has made a CDMA chipset that would be an easy "drop in" for QCOM's MSM. The system software changes, and the calibration and test is done differently. It's costly enough to develop, manufacture, and test CDMA phones without getting into this problem. And with most co's currently cutting back on costs, it's difficult to undertake this science project with chipsets still filled with bugs that may not make it into the market anytime soon. I agree that eventually, in order for QCOM and CDMA to thrive, other suppliers will be necessary but at the moment, the market is still in its early growth stages is not being limited due to QCOM as the "sole" supplier. One negative, QCOM will definitely have to lower their chipset costs once competition comes in, as they've been taking full advantage of their "monopoly" for years now. And they won't make as much on royalties for chip sales as they would if they sell them themselves. So the QCOM bulls have to bet that eventually, GSM systems are upgraded to W-CDMA, the rest of the world is CDMA2000, and QCOM, earning royalties on every CDMA chipset and CDMA phone sold, is truly the MSFT of the wireless world. I can see this happening, the question is how long it will take.
AI
