Apr 05, 2002 San Diego, CA
In the latest setback for the deployment of third-generation (3G) wireless networks, Qualcomm Inc. said Thursday (April 4) that it has detected a problem with a small portion of its 3G-enabled chip sets, based on a code-division multiple access (CDMA) technology called cdma2000. The problem impacts Qualcomm's chip set customers, distributors, and CDMA carriers, reportedly including Audiovox, LG, Verizon, Sprint, Samsung, Toshiba and others.
Qualcomm detected an undisclosed error with its CDMA2000 1X MSM5100 and MSM5105 chip sets and software, which are geared for cellular phones in 2.5G and 3G networks.
The San Diego-based company claims the error was immediately detected and corrected. It is now shipping large production volumes of the MSM5100 and MSM5105 chip sets to customers worldwide, the company claimed.
But still, the chip set problem has impacted several customers, reportedly including handset distributor Audiovox Corp. Today, the Hauppauge, N.Y.-based company announced disappointing sales and earnings, due in part to chip set delays from an undisclosed company in the CDMA world. Sources believe the company blamed Qualcomm for the problems.
Audiovox's net sales for the first quarter were $191.0 million, compared to $331.1 million reported in the first quarter of 2001. Net loss was $3.9 million, or minus $0.18 per share, compared to net income of $2.6 million, or $0.12 per share, in the like period a year ago.
"First quarter wireless sales were adversely effected by a delay in carrier approvals of our new 1X phones, which required software modifications to correct a chip set issue," said John Shalam, chairman, president and CEO of Audiovox.
"These phones are now in the final stages of carrier testing and we expect approvals shortly," he said. "The company will issue guidance after we receive carrier approval on these phones and have had the opportunity to evaluate sales projections for the balance of the year," he said.
Philip Christopher, president and CEO of Audiovox Communications, stated, "We expect the first half of fiscal 2002 to continue to be effected by the delay of our 1X product introduction as well asan overall reduction in demand and intense price competition."
The chip set problems also reportedly impact Audiovox' customers as well. The company distributes CDMA cell-phone from Japan's Toshiba Corp. and add-in cards from Sierra Wireless. Its CDMA carriers are Verizon and Sprint.
The move represents the latest setback for 3G. For example, Japan's NTT Docomo has experienced several delays in deploying its 3G network, based on a competing technology called wideband-CDMA (W-CDMA).
In Korea, the deployment of 3G has been pushed out for various reasons. The nation is also banking on Qualcomm's cdma2000 3G technology.
Both Europe and the United States are lagging in 3G, although Verizon and Sprint have demonstrated the technology in the form of field trails in the U.S. market.
