Something in Hand for a Growing Market
By Tammy Parker
The number of CDMA terminals available remained small in the early months of 1997 but, if launch intentions are anything to go by, this could still be the breakthrough year for the CDMA handset market.
In 1849, the state of California played host to the original '49ers, stalwart miners intent on making their fortunes during the heady days of the California gold rush. Nearly 150 years later, California's Qualcomm Inc. is prompting a rush on intellectual property as wireless handset manufacturers scurry to license the San Diego-based company's CDMA technology.
The list of those already manufacturing CDMA phones is still small, but includes such industry luminaries as Hyundai Electronics Industries Co., LG Information Communications Ltd., Maxon Electronics Co. Ltd., Motorola Inc., Qualcomm itself, the Qualcomm/Sony Electronics Inc. joint venture called Qualcomm Personal Electronics and Samsung Electronics Co. However, the list of handset hopefuls is growing steadily with nearly two dozen looking to hit the CDMA motherlode. New arrivals include Kyocera Corp. and Tokyo-based Kokusai Electric Co. Ltd., which recently signed licensing pacts with Qualcomm.
Those intent on building CDMA phones face a dizzying array of specs from which to choose. They can build phones for numerous frequency bands: 800 MHz and 1.9 GHz in the United States, 1.7 GHz in Korea and another set of 800 MHz frequencies in Japan, to name a few. Phone makers can also build phones with 8-kilobit-per-second (kbs), 13-kbps and enhanced variable rate 8-kbps vocoders. While manufacturers have selected certain areas of expertise, most say they are ready to build whatever the market demands, combining frequencies and vocoder demands as needed.
In addition, contrary to what some critics had predicted, CDMA phones are launching with a host of value-added features, including short messaging service. "Anything you can do with one technology, you can do with another," says Jim Caile, Vice President of Marketing for Motorola's Cellular Subscriber Sector. "There are very few features-in fact, none that I can think of-that are technology-exclusive."
Through the first part of 1997, the only CDMA phones available commercially in the United States were produced by Qualcomm Personal Electronics (QPE), the Qualcomm-Sony venture. QPE, which said it shipped its 1 millionth handset on Jan 27, is producing phones for North America, Hong Kong and Korea. Sony and Qualcomm, jointly and apart, plan to offer a total of five CDMA phone models in summer 1997, notes Stephen Burke, Vice President and General Manager of Sony/Qualcomm CDMA Sales.
Qualcomm is even offering a series of CDMA phone modules to encourage support from other manufacturers. Each of the QCM line of modules is about the size of a Type III PC Card and provides a platform for the development of CDMA digital products. Now, however, many major competitors are responding, bringing out CDMA handsets for North America as well as Asia and other developing areas. Motorola introduced its first CDMA phone, the SC-720, last fall for 8-kbps systems in Korea and other Asian markets, says Jim Caile. For the U.S. market, he notes, "we're in field testing now on a unit that does both 8-kilobit and 13-kilobit (vocoders), as well as NAMPS, because some of our customers need NAMPS." The tri-mode, dual-vocoder handset, dubbed the SC-725, should go commercial by mid-summer, Caile adds. Motorola's other U.S. offering, the 1.9 GHz SC-925, will carry a 13-kbps voice coder.
Both the SC-725 and SC-925 will use a Motorola-created chipset. Similarly, Nokia has developed its own chipset for a line of CDMA phones, which are being manufactured at the Finnish company's Fort Worth, Texas, facility. "The focus of the launch is the United States and Canada," says Larry Paulson, Vice President and General Manager of Business Development for Nokia Mobile Phones Inc. However, the handsets could be marketed in Asia at some point as well. Nokia's 800 MHz model is due out mid summer, while a 1.9 GHz version is slated for launch in the fourth quarter of 1997 or early first quarter of 1998, he says. Nokia's initial CDMA products will support 8 kbps and 13 kbps vocoders.
Nokia's CDMA handsets will mimic terminals in the company's popular 2100 series for GSM and TDMA systems and will be positioned similarly, Paulson says. "There are the same mechanics in all versions of that line," he notes. Oki Telecom Inc. also will use its own chipset in two phones being developed for the U.S. market: a dual-mode, AMPS/CDMA 800 MHz handset, model 3500, and a tri-mode, dual-band unit, the 1900, that adds CDMA operation at 1.9 GHz. And Lucent Technologies Inc. is working on a dual-mode, dual-band terminal to be made available in North America by the end of the year.
One major manufacturer resisting the urge to cash in on CDMA's growing popularity is Sweden's Ericsson. The company and Qualcomm have filed a series of lawsuits against each other alleging CDMA patent infringement. Qualcomm has charged that Ericsson has publicly stated plans to manufacture CDMA handsets, which Qualcomm says would violate its patents. However, Ericsson Director of Media Relations Kathy Egan says that is not so. "We have no plans to sell these handsets." An Ericsson company has licensed Qualcomm technology to manufacture handsets for the Globalstar satellite communications system, but Ericsson has not licensed any Qualcomm patents for terrestrial applications.
Manufacturers making - or considering making - CDMA subscriber units
Sources CDMA Development Group, Qualcomm, Mobile Communications Internnational research
The smaller, the better?
Small form factors have become de rigueur in the wireless industry, and CDMA handset manufacturers are struggling to meet that need. "The amount of silicon in a CDMA phone is still a little larger, so it's a little more complex than a PDC phone in Japan or a TDMA phone or GSM phone," says Motorola's Caile. Therefore, CDMA phones will continue to come in slightly larger and heavier than their digital counterparts for the time being. But Caile doesn't expect the size differential to impede sales of CDMA terminals: "That difference would be relatively minor to the end user."
However, Jane Zweig, Senior Vice President for consultancy Herschel Shosteck Associates Ltd., disagrees, saying that reducing CDMA handset size is a critical issue. "GSM is out there with little, cute phones. TDMA has cute phones. But the QPE phone that has been available in the United States is nine ounces (255 grams). That's heavy," she observes.
However, Zweig adds, "By the Christmas season, we'll see a lot of new CDMA phone vendors" with more pocket-size offerings. Indeed, QPE's three newest phones, all slated for summer 1997 availability, weigh in at less than 7.5 ounces (212.6 grams) each. That includes a 1.9 GHz PCS version, a dual-mode 800 MHz CDMA/AMPS model and a dual-band, dual-mode 1.9 GHz CDMA/800 MHz AMPS phone.
Samsung, already a veteran participant in South Korea's CDMA revolution, is also among those bringing smaller CDMA handsets to the U.S. market. Samsung Telecommunications America Inc. is heralding its CDMA PCS handset, the SCH-1011, and a dual-mode, dual-band PCS-cellular model, the SCH-110. The SCH-1011 was slated for delivery in the second quarter of 1997, while the SCH-110 should hit the market in late summer. Samsung's SCH-1011 is considerably smaller than first-generation CDMA phones, weighing in at only seven ounces (198.5 grams) and measuring less than 2.5 cm thick. "Because it is pocket-sized and weighs so little, the user will not think twice about carrying the handset. This, of course, means that the handset is more useful, which, in turn, increases call volume to the service provider," observed Ken Cho, Wireless Terminals Product Manager, when the phone was announced.
One of the smallest CDMA handsets is Qualcomm's Q phone, which was not developed in conjunction with QPE. The device measures 10.2 cm x 5.6 cm x 2.5 cm when closed and weighs less than 5.2 ounces (147 grams). However, the handset's launch has been stymied by a Motorola-filed lawsuit alleging patent infringement of Motorola's StarTac phone design.
FIRST SMART PHONE
Size and design issues aside, the Q phone still represents a CDMA first: the device was conceived as the first CDMA "smart phone." The Q phone supports Internet-based services such as stock quotes, airline schedules and weather reports through the integration of UP.LINK browser software from Unwired Planet of Redwood Shores, Calif. The device can access servers incorporating Unwired Planet's Handheld Device Markup Language, or HDML. Qualcomm has adopted the motto "Every Qualcomm Phone A Smart Phone," and says each CDMA phone manufactured by the company can directly connect to Internet-based information via the technology offered by Unwired Planet.
The Q phone has been exhibited in only a 1.9 GHz version, although Qualcomm Chief Executive Officer Irwin Jacobs has said the company is working on 800 MHz and dual-band versions.
Siemens Business Communications Systems Inc. is committed to offering CDMA handsets for North America at 800 MHz and 1.9 GHz; the firm will also offer dual-band and dual-mode (AMPS and CDMA) units. The first phone, a 1.9 GHz unit, will be out in 1998's first quarter.
The company's Wireless Terminals Division, based in Richardson, Texas, is also unveiling Siemens' first North American GSM handset, the g1050, in June 1997. While that device offers advanced GSM Phase II+ features such as over-the-air menu updates and personalization as well as mobile-originated messaging, Siemens isn't looking to integrate similar features in its early CDMA models, in part because CDMA networks are not yet equipped to handle them. "We don't think one technology is better than the other. But GSM today is frankly more mature, and more features are available for it. In the long run, that won't be the case," says Robert Hunsberger, Senior Vice President and General Manager for Siemens Wireless Terminals. He adds that Siemens is likely to extend its recently announced plans for color displays on GSM phones to the company's CDMA models.
Hunsberger also expects that Siemens' GSM and CDMA phones will add some form of Internet connection. But he adds: "In my wildest dreams I don't see the phone as being a general purpose Internet access device, though I know there are some manufacturers who aren't on that page." Long term, some are envisioning ways of expanding CDMA's footprint into areas such as Europe where GSM is the entrenched digital standard. Qualcomm's Jacobs has stated that the CDMA air interface could feed into a GSM network with no changes to the GSM switch. This merging of technologies might suit a GSM network operator that needs to open up more capacity, Jacobs says. Of course, such a development would entail development of dual-mode CDMA/GSM phones and provide yet another market for CDMA handset manufacturers to mine.
Looking at the loop
CDMA phones are available as more than just portable handsets for cellular-type systems. The technology also is being deployed in wireless local loop applications with fixed wireless terminals (FWTs).
Motorola's Cellular Infrastructure Group is developing FWTs separately from the company's Cellular Subscriber Sector because customers buy FWTs as part of a system purchase. "They buy so many lines and the terminals are part of that," says Motorola CSS Vice President of Marketing, Jim Caile. Further, the fixed terminals look and act more like standard landline phone units, offering dial tones that mobile versions don't.
The company's FWTs are available for use at 800 MHz and 1.9 GHz. Motorola's Cellular Infrastructure Group has commercial CDMA WLL contracts in the Dominican Republic, Nigeria and Yemen, and has trials in China, Poland and Singapore. Qualcomm also is pushing CDMA for 800 MHz and 1.9 GHz WLL deployment. The company is providing JSC Personal Communications of Moscow with a network that can serve up to 300,000 subscribers. Qualcomm also has a $24 million WLL contract with JSC Sviazinform in the Chelyabinsk region of the Russian Federation, and the manufacturer's WLL platform is undergoing government certification tests in India.
Qualcomm's FWTs are being made by its Subscriber Products Division, which also oversees production of portable handsets. "The primary reason (that one group is developing all of the handsets) is that our infrastructure platform can do mobile, fixed or hybrid systems," notes Michelle French, Senior Marketing Communications Coordinator for the Wireless Infrastructure Products Division. Qualcomm recently unveiled its second-generation FWT, a 1.9 GHz version called the QCT-6200 that supports both 8-kbps and 13-kbps vocoders.
Meanwhile, other manufacturers are moving more cautiously toward wireless local loop. "We have someone working in that area, but we don't have anything to announce," says Sheryl Savage, Spokeswoman for Oki Telecom.