March 13, 2003 1:43 PM PST

Study: Qualcomm still tops in '07, but...

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Qualcomm's cell phone technology will continue to rule the U.S. market in 2007, but not by the wide margin it now enjoys, according to a study released Thursday.

At the end of 2002, about 43 percent of all cell phones in the United States used Qualcomm's Code Division Multiple Access (CDMA) technology, according to the study by wireless-market analysts EMC. It was by far the No. 1 choice for U.S. dialers. Rival technology Global System for Mobile Communications (GSM) powered about 11 percent of U.S. cell phones.

By 2007, CDMA's share of the U.S. market will increase only slightly, growing to about 44 percent, EMC expects. Meanwhile, GSM's presence inside phones will triple, from the current 11 percent to about 33 percent, according to EMC.

GSM's growth is expected to come from carriers like AT&T Wireless, which are replacing outdated cell phone networks with ones powered by GSM instead of CDMA, according to Mike Woolfrey, EMC research manager.

"CDMA is the leading technology choice in the U.S. market," Woolfrey said. "However this position could be challenged by the emergence of new GSM services."

The United States is a very important battleground for Qualcomm, which earns much of its revenue licensing the technology to handset makers and wireless carriers. While Qualcomm's CDMA technology dominates in the United States, as well as in Korea and China, the overwhelming choice of the rest of the world's carriers is GSM. By most estimates, about 80 percent of the world's billion cell phones use GSM.

A Qualcomm representative had no immediate comment on the study. Patents to GSM technology are owned by a consortium of most of the world's major wireless makers, including Motorola, Ericsson and Nokia.

 

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