In an apparent counter-punch to a recent Nokia Corp.-backed initiative with Texas Instruments Inc. and STMicroelectronics, Qualcomm Inc. has seized the spotlight with a series of chip announcements, drawing attention to itself as a premier player in the space.
The announcements include a W-CDMA chipset that supports high-speed downlink packet access software, an end-to-end cdma2000 1xEV-DV revision D chipset, an entry-level cdma2000 1x chipset and a single chip solution that integrates application processors and modem processors.
The announcements, which feature CDMA and other technologies, are part of Qualcomm’s strategy to position itself not only as the big CDMA player, but as a respectable actor on the GSM/GPRS and W-CDMA scene, as industry moves toward merging the technologies.
“We’ve made a lot of impact in all protocols,” said Johan Lodenius, Qualcomm senior vice president of marketing and product management.
He also explained that although it may seem as such, the spurt of announcements was not propelled by the Nokia-backed initiative, adding “It makes us more focused and more passionate, but it has not changed our plans.”
Analysts believe that China and India will provide the battle turf between Qualcomm and the Nokia-backed initiative, as the region is poised for significant handset growth.
“Given the uncertainties surrounding the ramp at Unicom in China and Reliance in India, in conjunction with the impact of 8 million units of excess MSM chipset inventory, we believe there has to be some risk to
fiscal year second half 2003 estimates,” commented Jeffrey Schlesinger of UBS Warburg.
“We believe that until a material upturn in these two markets becomes more visible, investor sentiment will likely remain cautious on the name.”
Credit Suisse First Boston also shows concerns about China.
“We continue to believe that the best potential catalyst will come from a rebound in China net adds, which we expect late this year,” wrote the research firm.
“We believe the near-term will be constrained by inventories and the lack of subsidies. Longer-term, we are growing more cautious on the impact of new CDMA licensees, particularly given the ramp up of PAS and the introduction of dual-mode PAS/GSM handsets.”
Schlesinger noted that the status of both China and India as swing factors is reinforced by concerns by many OEM and ODM handset vendors about excess handset inventories.
Nokia had announced last December its plan to roll out HSDPA technology, which is an enhanced form of W-CDMA. Qualcomm said its products will be available next year ahead of the market in terms of performance quality and integration, according to Lodenius.
HSDPA will enhance speed and other features over existing W-CDMA offerings, like still pictures and video telephony as well as graphics. It will also enhance other multimedia services like games and audio features.
With its EV-DV product, Qualcomm indicated its offering is superior to the Nokia-backed initiative, which is Release C. Lodenius described the Qualcomm product as having higher receive and transmit quality than is currently available in the market. He said Release D offers “real improvements” of DV and supports all the modes, including 1x and DO with backward compatibility with cdmaOne. He said Release D offers speeds of 1.2 Megabits per second, while Release C gives 153 Kilobits per second.
Its MSM7000 line targets multimedia services by providing greater screen resolution, graphic performance and gaming experience for handsets, personal digital assistants, gaming and a variety of terminals.
“This new family of complete solutions ensures reduced design and development times, stimulating a greater number of affordable, high-end devices to spur mass-market adoption of wireless data services,” said Sanjay Jha, president of Qualcomm CDMA technologies.
Qualcomm claims that its competitors have up to 160 components while it has 80 and that OEMs and ODMs prefer integrated solutions.
Lodenius said that its products will also target mid- and low-tier markets. The Nokia-backed initiative seems to focus on the low-tier demand that seeks to force down prices, a criticism often leveled at Qualcomm.
“Nokia is trying to paint a picture of limitation that doesn’t exist,” remarked Lodenius. “We have low, mid and high-tier solutions.”
With an eye to the entry-level third-generation market, Qualcomm said its MSM6025 will afford immediate opportunity for increased revenues for both data and voice.
On Qualcomm’s foray into the GSM space, Lodenius said its GSM 1x solution, which interoperates GSM with the CDMA protocol, is generating positive response in the market and some contract announcements will be made later in the year.
The company also said that attaining interoperability between cdma2000 and wideband CDMA is not a challenge, explaining that the chip will be rolled out once the market demands it.
“Architecturally, there is little difference between cdma2000 and wideband CDMA,” he said. “It’s not a technical issue.”
