currently dominates the CDMA chipset market, Texas Instruments
are making a play in a bid for greater market share.
The new alliance announced Thursday is an offshoot of TI’s challenge that it alluded to last week when it said it would “expand its presence” into the CDMA market. All three companies have announced separate plans to develop their own CDMA-based chips but this will be the first time the three will be competing directly for customers against QUALCOMM, which some say controls close to 90 percent of CDMA
Nokia, STMicro and TI said they will be offering an entire CDMA 2000 1X
While CDMA is more expensive, and not as widely used as GSM
Currently, two-thirds of all wireless users around the world use some variant of GSM, according to industry stats, while CDMA is used by less than a fifth of all wireless subscribers.
The mobile chipset technology is already built into Nokia’s CDMA 2000 1X handsets, and the partners plan to market the technology for incorporation by other wireless handset manufacturers.
On a conference call with analysts and reporters, all three companies went to great lengths to say this is announcement for three companies to co-develop a new generation of CDMA chipsets and handsets. The partners said they expect some new sample chips to be available by next quarter.
Each of the three companies brings core competencies to the venture. Texas Instruments will create the digital baseband in the chips, while ST will provide its radio frequency module and power-saving chip technology, while bring its experience with designing wireless modems and building CDMA handsets.
The venture is also expected to develop a set of chips for more sophisticated mobile phones, which will contain the final 3G development of CDMA — 1xEV (data only)/DV (data and voice) — standard designed for mobile Internet use and faster data communications applications. The CDMA2000 standard can handle a peak data bandwidth of 156 kbits/second, which is faster than GSM’s data rates.
TI, ST and Nokia are also expected to challenge QUALCOMM with competitive prices, yet it remains to be seen, if QUALCOMM will counter with its own price war. While the new venture is presenting itself as a challenge to QUALCOMM, it’s also a vote of confidence for CDMA technology. QUALCOMM has invested major resources in CDMA technology over the past decade.
Analysts expect that TI will be able to lower the costs of making the CDMA chipsets, but exactly how much and when seems to be an open question.
“The chipsets will provide reduced bill-of-materials cost compared to similar offerings, low-power consumption for both standby and talk times,” the companies said in a joint statement.
TI did say it has a cross-licensing agreement with QUALCOMM, and that as a result it doesn’t face the patent-licensing fees that others who have entered the market face.
Analyst group Forward Concepts estimates that 86 million CDMA baseband DSP
The companies said “in addition to the CDMA chipset solutions, ST and TI will make available their own complementary wireless technologies including applications processors, which support the OMAPI standard, wireless LAN, Bluetooth, and GPS location technology.”