GSM's Dominance Growing
An interesting trend within the wireless industry that doesn't get much media attention is how GSM, which has more than two billion users in more than 200 countries, is increasingly becoming the global standard, while CDMA is beginning to lose its appeal. A good example of GSM's momentum is Cingular Wireless' controversial plan to charge its non-GSM subscribers, a $5 a month fee in an effort to encourage them to get new GSM phones. Meanwhile, Brazilian carriers Vivo said recently it will spend $492-million to overlay GSM on top of its existing CDMA network to stem market share losses. Before CDMA is counted out, it does have two large champions: Verizon and Sprint. As long as they are using the technology, handset makers have little choice but to develop cool new phones. This is good news for Canadian carriers Telus Mobility and Bell Mobility, which also use CDMA, while rival market leader Rogers Wireless uses GSM.
Update: In the name of fairness, Lucent CEO Patricia Russo talked about CDMA's prospects after the company's fiscal third-quarter results were posted last week. Here's an excerpt:
market, which has been the target of a lot of speculation in recent
weeks. CDMA continues to represent a large and sustainable market. In
fact, when we look at an average of both internal and external
estimates, the total addressable market for CDMA2000 equipment is about
$8 billion plus in 2006, and we believe, based on these estimates by
analysts, it will remain steady or increase slightly through 2010.
August 1st, 2006 at 12:57 pm
Two points to note here:
1. Cingular is asking 8% of their customerrs to upgrade to GSM from their older technology phones: TDMA and analog. Amazing that some people are still on analog, given the security problems it had. Expect Rogers to do the same in Canada at some time in the near future as much for network capacity reasons as for dropping old technologies.
2. There are simply more handets/devices coming out for GSM than for CDMA. In fact, Nokia has taken recent actions that effectively are an end of line strategy for CDMA-based devices (see below); their E series and N series devices only work on GSM and the associated GPRS/EDGE/UMTS data protocols. The very well received Blackberry 8700 series, of which you recently spoke so highly. is only equipped for GSM//GPRS/EDGE/UMTS.
From Nokia's recent Q2 quarterly report: Nokia announced that it will not be forming the proposed CDMA device company with Sanyo. Moving forward, Nokia intends to participate selectively in key CDMA markets, with a special focus on North America. Nokia plans to ramp down its own CDMA R&D and manufacturing by April 2007.