Nokia stops making CDMA phones

Big win for GSM. Wonder if Bell/Telus will finally admit CDMA was a
mistake and switch to GSM.


(from Reuters

It is almost impossible for a mobile phone maker to earn any money with
cheap CDMA handsets, which throws into question if there is a future for
CDMA in emerging markets where most of the growth is, Nokia and industry
observers said Thursday.

"In this fragmented market, making money with low-end CDMA (code
division multiple access handsets is very difficult," Kai Oistamo, head
of Nokia's Mobile Phones business unit, told Reuters in an interview.

Nokia said earlier on Thursday that it would pull out of the production
of CDMA phones altogether, blaming expensive licensing fees charged by
Qualcomm, the sole supplier of all the chips for CDMA phones.

Nokia will concentrate instead on phones for GSM (Global System for
Mobile Communications) and advanced WCDMA (wideband code division
multiple access) mobile networks, used by more than 70 percent of the
world's 2 billion cell phone subscribers, a number expected to double in
five years, mainly in emerging markets.

Qualcomm, which was not immediately available to comment, has said its
licensing terms are the same for everyone and are a low single-digit
percentage of the wholesale price of a phone.

In India, one of the world's fastest-growing mobile telephony markets,
CDMA operator Reliance Communications has started applying for GSM
frequencies.

Smaller Latin American countries have seen their sales of CDMA handsets
collapse in recent months. In China, the world's biggest mobile phone
market, CDMA phone sales have halved, according to market research group
Strategy Analytics.

"There are signals that CDMA is increasingly being marginalized," said
analyst Neil Mawston at Strategy Analytics.

That is also due to lower prices for the cheapest GSM handsets--which
cost less than $30 before local taxes, reflecting the GSM market's scale
and low GSM royalties for major players such as Nokia, Ericsson and
Motorola, which also developed the technology.