Following a trend by wireless players to chip away at Qualcomm Inc.’s stranglehold on the CDMA market, Nokia Corp., Texas Instruments and STMicroelectronics announced a joint development program to offer chipsets for cdma2000 1x and 1xEV-DV.
This announcement comes in the wake of Samsung Electronics’ hint that it plans to make its own chipsets, as well aggressive efforts by Chinese vendors to pursue TD-SCDMA. The joint decision also underlines new markets opening for the technology in Eastern Europe and Asia on the 450 MHz band. A smaller company, Magnolia Broadband, also rolled out a dual antenna chip known as DiversityPlus, which allows receive and transmit, whereas Qualcomm’s product offers only receive.
“A combination of all these will create a competitive atmosphere for Qualcomm, and it will be interesting to see how it responds,” noted Tim Shelton, senior analyst with Allied Business Intelligence.
He said efforts like this may compel Qualcomm to reduce its royalty fees, adding, “They may have to go back to the table.”
Major vendors like Nokia and L.M. Ericsson have taken exception in the past to what they describe as Qualcomm’s high royalty fees and each of them has often claimed to have more CDMA patents, an issue that has not been proven definitively.
TI foreshadowed these joint efforts recently when it said it would launch into the CDMA space.
GSM technology remains the dominant worldwide standard, with most handsets and mobile users dedicated to the protocol.
“CDMA handset manufacturers now have unprecedented choices to design innovative and competitive cdma2000 wireless products based on these open, standard CDMA chipset solutions from ST and TI,” said Gilles Delfassy, senior vice president of TI’s wireless business unit. “This will stimulate healthy competition in the CDMA market and fuel the growth and evolution of handset designs, features and roadmaps.”
The companies stress that their product will operate in an open environment, a charge that industry competitors have leveled at Qualcomm, although Qualcomm has made strides toward making its product interoperable, especially with its GSM 1x product.
Nokia has been ramping up its CDMA offerings, not only in terms of it network offerings but also handsets. Analysts think it plans to win major handset contracts with CDMA carriers in North America.
The Finnish company sells more handsets than any other company in the world, and with the current economic slide, this joint venture may make forays into a space in which Qualcomm dominates with about 90-percent market share.
Magnolia Chief Executive Officer Haim Harel said many more companies will try to cut Qualcomm’s market share, but the San Diego-based company will still be comfortable although not as dominant.
The Nokia-backed chipset solution will include an analog/power management chip, a digital baseband chip, associated protocol software, radio-frequency chips and reference designs.
“In order to help create new alternatives and greater opportunity in the CDMA marketplace, Nokia is working with TI and ST, who in turn are developing a viable, proven alternative to what already exists in the market,” said Soren Petersen, senior vice president and general manager of Nokia Mobile Phones CDMA business.
