Nokia, Rebuffed, Leaves in Huff
In a story that seems to repeat itself every couple of years, Nokia has decided it doesn’t need the CDMA market anyway, and it’s going to take its ball and go home. The problem is, it never owned the ball - so everyone else is just going to keep playing without them while they sit in the corner sulking.
Nokia Pulls Out Of CDMA Phone Market - Yahoo! News
Nokia, the world’s largest mobile phone maker, said it would stop making phones using the CDMA standard and had scrapped plans to produce them with Japan’s Sanyo Electric Co.
The Finnish company said on Thursday it would pull out of CDMA (Code Division Multiple Access) phone manufacturing, which it sees as a shrinking market in the longer term, though it will continue to offer to sell Nokia rebranded CDMA phones produced by contract manufacturers in the North American market, where the standard is popular.CDMA is the less popular wireless telephony technology, used by around 25 to 30 percent of all mobile phone subscribers, and competes with the GSM standard used by around 70 percent of the world’s 2 billion wireless subscribers.
Though Nokia holds the number one spot in global handset sales, built on its strength in GSM which it helped to invent, the Finnish company has trailed in CDMA. It has tried to avoid using chips by Qualcomm Inc., but could not avoid paying significant technology licencing fees to Qualcomm which holds most patents to the CDMA technology.
The two have a bitter history over technology licensing and patent infringement cases.
You can tell by the tone of the article that plenty of Nokia’s point of view came through. CDMA is the “less popular” technology and “is declining anyway.” However, another article on the topic paints a different picture.
CDMA has been successful in Japan, the U.S., Brazil, India and China, but Europe has been dominated by a different technology called GSM, or “global system for mobile communication.”
So the technology that is more popular in two of the largest economies and thefast-growing economies often-referred to as the BRICs is something they just won’t bother with? That won’t hurt Motorola’s or Samsung’s feelings, we’re sure.
By the way, if you wonder what technology is really gaining share, you need look no farther than the respective share prices for Nokia and Qualcomm.
Disclosure: Author is long IShares MSCI Japan Index (EWJ) at time of publication.
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