Nokia San Diego CDMA outfit taken over by Foxconn

In an apparent attempt to strengthen it's partnership with Nokia, Foxconn has taken over Nokia's CDMA team in San Diego, California. Foxconn produces Nokia handsets in Hungary at the industrial park in Komarom beside Nokia's central European factory. They also produce devices for Apple, Motorola, they are the OEM for the Xbox 360, Sony's PS2 and PS3 as well as many other products.  Competition seems fierce for Foxconn with reports that rivals such as Compal Communication and BYD are expected to begin shipping low-end CDMA handsets to Nokia in the first half of next year. TechFaith is expected to ship GSM/CDMA dual-mode devices to Nokia as well.  So it only makes sense that they would be fighting to strengthen the relationship with Nokia, and hopefully this new significant collaboration will make some ground in the CDMA market. Like North America, the Asian CDMA market has been showing Nokia trouble for some time now.

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A planned venture with Sanyo in 2006 that would have seen operations in at the San Diego facility as well as Osaka and Tottori has gone belly up. This move would have given the team a serious presence in the CDMA market, besting LG and tying rival Samsung with somewhere around 20% market share. The merger was abandoned after extensive analysis apparently concluded that it would be far more beneficial for the manufacturers to individually pursue other options with respect to the CDMA market. Now we are starting to see quite a few possibilities for an increase in CDMA market share for Nokia as Foxconn takes over the San Diego CDMA crew. I've been hearing for a couple months now that Nokia is going to start producing more devices for Verizon networks- something I've been waiting on for a long time personally. 

The CDMA market has shown Nokia great trouble for good reason. They understandably have resisted buying CDMA chips from arch-enemy Qualcomm, choosing to develop their own using patents licensed from Qualcomm and others that has been one big legal mess. Aside from the legal battles, this means that Nokia has just been scrambling to keep up with the latest CDMA technology, and those efforts have failed to produce devices that excite consumers. CDMA has also been a complete money loser for Nokia with massive R&D costs spread over a very small amount of production. It has the lowest gross margins of Nokia's product line and the struggle to grab market share in this area has been a complete drag on earnings. Let's not forget about marketing expenses- does Nokia really need to toss more money into the North American market as they try to make a solid go in the US? Absolutely. We're a very underdeveloped and immature market in North America- we simply need to be educated by Nokia as consumers. Now that Apple's massive marketing machine has gotten America excited about the fact that we can do other things with our mobiles than make telephone calls- this might be exactly what Nokia needs to push ahead over here... though it's certainly going to "take money to make money" in this market. Without proper marketing, I can't see this new development in the CDMA market by Nokia as doing any good. It would most likely be just another way to drag down the rest of the line and hold up progress.

The news today is certainly something to keep an eye on. It could be really good news for any Nokia enthusiasts that have somehow found themselves on Verizon's network, or those that would prefer a switch to (or back to) CDMA. I for one will be keeping a close watchful eye on this new development, as it certainly seems to show promise.

Comments (1)

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Holy Bat! Nokia 6205 comes to Verizon
written by Howi, June 15, 2008

Folks,

I think 6205 is one of the bearing fruits from the Nokia - Foxconn

http://news.vzw.com/news/2008/06/pr2008-06-13.html

http://www.nokia.com/A4136001?newsid=1227697

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