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Qualcomm hits back at Nokia knocking of CDMA technology

Back in February, Nokia did Qualcomm a bit of a favour by announcing a partnership with Sanyo to take on the (primarily North American) CDMA based mobile phone market. So it seems to have hurt feelings at the CDMA patent owner more than usual, when Nokia pulled out this week. No surprise then that Qualcomm has hit back, rather hard!

The original Sanyo partnership focused on Japanese sales, and the February announcement talked about the potential for increased sales in more expensive phones. Most of the CDMA phones Nokia makes are low-end, low-profit (comparatively!) and Sanyo technology was expected to move the brand up market.The financial markets took a simplistic view, and decided that this justified increased optimism about Qualcomm's profits; five months on, when the news changed, Qualcomm had to take evasive action; it did this by belittling Nokia.

In the sort of statement that would have been much more convincing if it had been made in February, Qualcomm derided Nokia as a bit part player. Because now, Nokia has changed its mind. It said that there wasn't enough profit in CDMA to justify the venture, and it was pulling out of the deal.

So here's what Qualcomm's PR team said:

"Despite its efforts over the past several years to increase its share of CDMA2000 handset sales, Nokia has had very little success in competition against many of QUALCOMM's other licensees and chipset customers."

The statement went on to observe: "In addition, Nokia has not contributed to the development of CDMA2000 around the world, preferring to focus instead on GSM where Nokia controls a dominant share of the handset market in many countries enabling Nokia to maintain high prices and margins."

What is rather hard to understand is why Qualcomm thinks this is good publicity for Qualcomm. It explains: "The CDMA2000 handset business is highly competitive with participation from many capable manufacturers of all sizes around the world due in large measure to QUALCOMM's widespread licensing and multi-tiered supply of enabling chipsets and software."

That's no doubt quite true; but how is that going to encourage people to get into this market? "Join in, you won't be able to stand the heat - not even Nokia could" isn't really a rallying call.
Tags: CDMA, Nokia, Qualcomm