Qualcomm-challenging cell phones to debut in 2004

Signaling a new challenge for chipmaker Qualcomm, handset manufacturers are planning an October or November debut of cell phones using chipsets created in tandem by Texas Instruments and STMicroelectronics, a TI executive said Friday.

The phones, based on the Code Division Multiple Access (CDMA) standard, will likely be sold in CDMA strongholds North America, Latin America and Korea, according to sources. About 20 percent of the world's 1.1 billion handsets currently use CDMA.

The cell phone chips from TI and STMicroelectronics represent a new market-wrinkle for San Diego-based Qualcomm, which for years has provided handset makers with the only CDMA silicon choice. In addition to the TI announcement, Samsung started producing its own CDMA chips this year. The Samsung chips, however, are only for Samsung phones.

"Twenty percent of the market is interesting enough to attack," said Tom Pollard, Texas Instruments' director of marketing for wireless chipsets. "Right now, our market share is zero. We will be grabbing market share."

For now, the tandem will produce chips with a version of CDMA called CDMA2000 1xrtt. The standard is used by U.S. carriers Verizon Wireless, Sprint PCS, plus others in Canada, Latin America and Korea. But Pollard said TI and STMicroelectronics are also at work producing chips using a standard called EV-DV, a high-speed standard included in many CDMA carriers' plans for the future.

A Qualcomm representative said the company had no comment on the chip competition, adding that the company recently raised forecasts for sales of CDMA phones worldwide this year to 110 million to 112 million, from an earlier prediction of 106 million to 108 million.