Shake-Up in the U.S. Cell Phone Industry

There’s the potential for some real drama in the U.S. cell phone industry if the U.S. International Trade Commission gets its way. The ITC has ordered a ban on the import of all mobile phones using Qualcomm’s 3G technology. Apparently, the technology infringes on a Broadcom patent.

3G technology is the latest advancement in the cell phone arena that basically allows for faster download speeds via wireless broadband, and thus the ability to do things like download music and videos from the phone's Internet browser, then experience them right on the handset’s screen. According to reports, Qualcomm’s chip infringes on a patent that Broadcom holds for a technology that helps to conserve power in cell phones, thus permitting longer battery life. What’s strange is that the ban would only apply to mobile phones that haven’t yet been introduced to the U.S. market; while already existing 3G phones will not be affected.

The cell phone is increasingly moving toward becoming more of a convergence device that offers everything from music playback functionality, to fancy integrated digital cameras and even GPS capabilities. Given this, technologies like 3G are essential to further development, and feature benefits.

I’d be surprised if a resolution wasn’t made prior to a ban actually coming into effect. But it could go either way. Apparently Qualcomm is seeking a stay from the Federal Court of Appeals, and President Bush has 60 days to make a final decision. Either way, if a ban appears imminent, it will be interesting to see if cell phone manufacturers scramble to release their latest Qualcomm-based 3G innovation ahead of schedule for fear of the ban actually taking effect!

CTIA-The Wireless Association said it best: “Consumers should not have to pay the price for a legal debate that could be settled by other means.” Let’s keep our fingers crossed that it is settled before things get ugly.