Abstract

California based Qualcomm holds a very distinctive position in the global wireless telecommunication market. It owns majority intellectual property rights to the CDMA (Code Division Multiple Access) wireless standard. Qualcomm licensed this technology to major network equipment and cell phone makers, and collected licensing fees and royalties whenever any CDMA based products were sold. Compare this to the other prevailing standard, GSM (Global System for Mobile Communications), whose intellectual property rights were not majority owned by any single company. Hence, the wireless market was interestingly poised: Qualcomm and CDMA on one end, and a consortium of major players like Nokia on the other. (Though Nokia designed phones for the CDMA standard, it was heavily committed to GSM. The same was the case for other major European players like Ericsson and Siemens.) Of about 1.3 billion cell phone subscribers in the world at the end of 2002, about 847 million were based on the GSM, while 159 million were CDMA based. GSM now dominates markets in Europe, Asia, Africa, Latin America, etc, while CDMA has a commanding market share in the North American market and parts of Asia. Since it was founded in 1985, Qualcomm has actively promoted the CDMA technology as a better alternative to the GSM and has been fast increasing its market share in larger markets like China and India where users are increasingly favouring the CDMA. From 2000 onwards, the battle between these two standards has extended into the market for third generation wireless services that promises multimedia and Internet on cell phones. In this case, we trace the evolution of these two wireless standards and how each is competitively positioned for the new generation of wireless services.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Qualcomm, Wireless technologies, CDMA (code division multiple access) technologies, GSM (global system for mobile communications) technologies, TDMA (time division/demand multiple access), 3G technology, Telecommunications industry, Globalisation, General Packet Radio Service, Licensing, CDMA2000, Cellular technology, Mobile telephony, Motorola, Nokia