SAN DIEGO -- Apparently beating Texas Instruments Inc. and other IC rivals to the punch, Qualcomm Inc. here is claiming an early lead in the race to supply chips for new third-generation (3G) cellular phones. The San Diego company told SBN this week that its chip sets are now being shipped in the world's first 3G-enabled handsets.
Late in October, two Korean handset makers--Samsung Electronics Co. Ltd. and SK Teletech, the handset subsidiary of SK Telecom Co. Ltd.--began shipping 3G handsets, based on Qualcomm's MSM5000 chip set series, said Luis Pineda, vice president of product management for Qualcomm's CDMA Technologies Division.
The carrier, which happens to be SK Telecom, is operating the world's first 3G-enabled network for the Korean market. The system is built around acode-division multiple access (CDMA) air-interface standard, called cdma2000, Pineda said.
"SK Telecom is the world's first carrier to deploy 3G," he said
in an interview with SBN at this week's "Dataquest Semiconductors 2000" conference in San Diego.
The deal is a major coup for Qualcomm in the emerging and competitive 3G-enabled chip set market. While Qualcomm has taken a slight lead in the market, TI, Intel, Mitsubishi, Philips, STMicroelectronics and others that are developing 3G chip sets are not too far behind.
The stakes are huge. Global sales of 3G-enabled handsets are expected to grow from $1.5 billion in 2001 to $9.2 billion in 2005, according to Forward Concepts Co., a market research firm in Tempe, Ariz. The total investment in infrastructure equipment to support 3G cellular services is expected to grow from $1.3 billion in 2001 to $5.3 billion by 2003, Forward Concepts said.
At present, SK Telecom's 3G-enabled network is capable of supporting
wireless data at speeds of up to 153-Kbits per second, Pineda said. According to the International Telecommunications Union (ITU), 3G is defined as a network that is capable of handling wireless data at a minimum speed of 144-Kbits/sec., he said. In the future, carriers hope to boost the data rates in their 3G-enabled networks to 2-Mbits/sec. and beyond.
SK Telecom is deploying cdma2000 technology. Backed by Qualcomm, Sprint, and others, cdma2000 is one the two standards vying for dominance in the 3G standards wars. The other 3G standard is called Wideband-CDMA (W-CDMA), which is being endorsed by Motorola, Nokia, NTT, and others.
Even in South Korea, there is battle among carriers over 3G. LG Electronics Inc. has long maintained it wants to deploy the W-CDMA standard. Government-owned Korea Telecom originally supported the cdma2000 format, but is wavering now toward the European version. SK Telecom is reportedly looking at both cdma2000 and W-CDMA.
But proponents of the cdma2000 camp claim they are ahead of W-CDMA by at least eight months or more. NTT is operating the world's first W-CDMA network, but the Japanese telecommunications giant is struggling to deploy the system due to the complexities of the technology, sources said.
"Originally, NTT hoped to deploy their networks by late-2000 or early-2001," Pineda said. "Now, it looks like they have pushed out the deployment until mid-2001."
For now, SK, Samsung, and Qualcomm have taken the lead in the 3G race, confirmed analyst Stan Bruederle, who tracks the industry for Dataquest Inc. of San Jose. "I believe this to be true, but I wouldn't say that the 3G race is over," Bruederle said.
Indeed, TI, the world's leading supplier of baseband chip sets, recently announced its IC platform for 3G-enabled handsets and announced several design wins for the product, including Nokia, Ericsson, Sony, among others. But these OEMs have yet to ship their 3G-enable products, however.
Calls to TI were not returned. Meanwhile, other cell-phone chip set suppliers, including Intel, LSI Logic, Philips, and STMicroelectronics, are also developing products for 3G-enabled handsets.
So far, Korea has deployed the world's first 3G network. Next year, Japan, and even the United States, will deploy their 3G-enabled networks as well.
"Next year, we will see Sprint and Verizon move in the 3G market," Pineda said.