Nokia Loses Interest in CDMA; Helps Windows Mobile?

[Janak Parekh]

<div class='os_post_top_link'><a href='http://www.nokia.com/A4136001?newsid=1059329' target='_blank'>http://www.nokia.com/A4136001?newsid=1059329</a><br /><br /></div><i>"Nokia announced today that it will not be forming the new CDMA device company with SANYO it preliminarily announced on February 14, 2006. Nokia decided not to pursue its earlier plan as it concluded the terms and conditions of the proposed partnership were not satisfactory and in the best interests of Nokia's long term success. In addition to an already financially prohibitive CDMA ecosystem in general, recent developments may indicate that the CDMA emerging markets business case is looking more challenging."</i><br /><br />I've been meaning to post on this news for the last week, for an angle that I don't think others have thought about: the continued lack of Symbian devices on CDMA. I was looking forward to seeing more competition in the PDA phone/Smartphone market in the US, but it looks like Windows Mobile or PalmOS will remain the choice for about 50% of the population thanks to Nokia's about-face on the technology. CDMA adoption rates aside, there's a large userbase out there that uses the devices (myself included), and Windows Mobile's support of all the network protocols out there may be a factor in long-term adoption rates. And we're unlikely to ditch the service; Verizon has the lowest churn rate amongst carriers in the United States.

[bnycastro]

Is 3G [or 3G with HSDPA] CDMA technology? Here in Asia most Nokia releases [N Series] are 3G capable.

[Janak Parekh]

Is 3G [or 3G with HSDPA] CDMA technology?
It is a "CDMA" technology, but there are two predominant CDMA standards out there -- the one Qualcomm pushes (which is going down the EVDO route), and the one the GSM consortium is pushing (which is going UMTS, HSDPA, etc.).

Both are likely to continue existing in the US for some time, and as far as I know Nokia has written off the former, despite its roughly 50% marketshare.

--janak

[bnycastro]

ah that makes it a lot clearer thanks janak :) I guess there are a lot more GSM users in the world [I think Europe and Asia are predominantly GSM] maybe that is why Nokia is focusing more on those markets.

[Yata]

Apparently the change in strategy is because a lot of the CDMA carriers in the developing world (Brazil, India, etc.) are migrating to GSM. Therefore it no longer makes economic sense for Nokia to develop and manufacture CDMA devices.

Yes, Qualcomm CDMA has 50% market share in the US, but it is a relatively small market and licensing fees/manufacturing costs are higher for CDMA. These factors can make margins very tight for CDMA cell phone manufacturers.

Whilst I agree that it would be fantastic to see more competition in the CDMA market, I can see the business reasons behind Nokia's decision. It does mean that we're unlikely to see a Symbian CDMA phone since Symbian's main supporters are either heavily GSM-focused (Nokia, Sony Ericsson) or only interested in smartphones for the Japanese market (Sharp, Fujitsu, Mitsubishi). :(

I guess there are a lot more GSM users in the world

2 billion vs. 200 million. The GSM market is roughly ten times bigger globally.

I know it's wishful thinking but wouldn't it be great if there was just a single cellular standard? :)

[Janak Parekh]

Apparently the change in strategy is because a lot of the CDMA carriers in the developing world (Brazil, India, etc.) are migrating to GSM. Therefore it no longer makes economic sense for Nokia to develop and manufacture CDMA devices.
I understand the argument, and that GSM has much larger marketshare, but CDMA's dominance in North America and east Asia would imply that Nokia is writing off several potentially lucrative markets, whereas Windows Mobile is doing both. Maybe I'm just pointing out Symbian's lax attitude towards CDMA, moreso than Nokia handsets itself.

I know it's wishful thinking but wouldn't it be great if there was just a single cellular standard? :)
Of course, you're saying this while writing from Tokyo, where none of our phones really work. :P I do think the lack of a standard helped propel CDMA forward. Years ago, when Qualcomm first built CDMA, people thought it would never take off. The fact it has may (or may not... who knows) have been a factor in the GSM consortium's switch.

--janak

[aheald]

Not just South America - Telstra in Australia has dumped CDMA in favour of a one network standard - HSDPA/GSM based. Telstra is a rare beast in that it ran both GSM &amp; CDMA networks in Australia (both the biggest geographically). Customer number are relatively low compared to the rest of the world (around 12 million last time I looked) but make for an interesting analysis. GSM has all the best devices - the CDMA phones are like "70's brown". Rarely have we encountered a decent CDMA handset - the only standout of course was a windows mobile based device - the i-mate PDA2K EVDO. The recent models like the Samsung and the Palm 700w did not appear here. And SIM cards make it so much easier to switch phones when you need to. But CDMA is renowned for brilliant coverage which is very important in rural Australia and super fast data speeds on EVDO. So now that the GSM camp can roll out HSPDA (W-CDMA based) on the 850 band, similar to what Cingular are doing, CDMA's relevance in Australia has disappeared overnight.
CDMA is a great air-interface, but the CDMA-2000 standard (IS-95B et al) is based on AMPS technology, which is just getting a bit tired. I think it will be inevitable from a technological stand point which technology will succeed, I just question whether blind allegiance to the US flag will inhibit support for a European technology...

[Janak Parekh]

I think it will be inevitable from a technological stand point which technology will succeed, I just question whether blind allegiance to the US flag will inhibit support for a European technology...
Huh? We do have HSDPA here already, you know. In fact, our deployment is not bad amongst countries on a global scale.

--janak