Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 26
There are three primary wireless 'air interface' technologies: AMPS (traditional
analog), TDMA (GSM & IS-136) and CDMA. AMPS is an anachronism; it
consumes too much spectrum, uses too much power, and has inferior voice
quality...it's a legacy technology not germane to the discussion.

TDMA (time division multiple access) was the first widely deployed digital
standard. GSM, is a pan European standard, and combines network protocols
(MAP) with a TDMA air interface (the A/I is how information is transmitted
between the handset and the basestation controller). IS-136 is based on the U.S.
network protocols (IS-41) and a similar TDMA air interface. TDMA has been
around a long time; its technology is well understood; manufacturers are well
down the technological learning curve, so equipment is relatively inexpensive to
make; it provides decent leverage over AMPS (2x-4x more capacity depending
on network configuration and a myriad of other factors)...BUT, it is also
MATURE, i.e. most of the capacity gains have been realized, and it is
architecturally a poor schema for wireless data.

CDMA (code division multiple access) was conceptualized as a secure military
communications technology. Dr. Jacobs, Dr. Viterbi, Klein Gilhousen (and a
boat-load of other very very large brains) managed to commercialize the
technology...something little, inconsequential companies like Ericsson and Nokia
said couldn't be done. Using a similar rate vocoder (the device that converts voice
to digital), CDMA provides a 3x-4x capacity advantage over TDMA-based
technologies. This capacity advantage is expanding as the technology continues to
improve and evolve, i.e. 1XRTT should take this diferential to 6x-8x). This
differential, in and of itself, affords CDMA-based wireless carriers with an
enormous competitive advantage over those that deploy TDMA-based
technologies, i.e. look at the explosion of capital spending at ATT due to capacity
constraints). However, the kiss-of-death for TDMA is that it is poorly suited
architecturally for to work with high-speed data. This is why Ericsson and Nokia
ultimately began pursuing a version of CDMA called W-CDMA (wideband
CDMA). At this point commenced a global pissing match between QCOM and
Ericsson/Nokia. Long story short, in March Ericsson caved, admitted that
Qualcomm owned the enabling technologies (intellectual property rights) for
CDMA, and agreed to pay Qualcomm royalties.

As a result, investors in Qualcomm can expect the company to collect royalties
from EVERY company selling mobile CDMA equipment worldwide. At the same
time, it has become apparent that CDMA will be THE worldwide standard for
third generation wireless. That's a pretty damn big twinkie, in-and-of-itself. And is
similar to the royalty Microsoft extracts from the PC industry every time a
computer is sold. Qualcomm also manufacturers semiconductors (ASICs) that
enable and facilitate the production of CDMA equipment. These ASICs are the
'brains' of the CDMA device, not dissimilar to the relationship of the Intel Pentium
to the PC. Wall Street finally figured all of this out circa March of this year...which
is why the stock went asymptotic (ha! spelled it right this time).
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.