CDMA cutbacks lead Nokia to lay off U.S. workers

It expects to eliminate about 600 jobs in the process, cutting a work force of about 1,150 to roughly 550

Nokia will cut a few hundred jobs as it shuts down its CDMA handset development.

The company has been developing CDMA (Code-Division Multiple Access) products at a facility in San Diego but is now turning to ODMs (original device manufacturers) for all its CDMA phones. It expects to eliminate about 600 jobs in the process, cutting a work force of about 1,150 to roughly 550, said spokesman Keith Nowak. In the future, the San Diego unit will work with the ODMs and also help to develop Nokia GSM (Global System for Mobile Communications) and UMTS (Universal Mobile Telecommunications System) products.

San Diego is the hometown of Qualcomm Inc., which pioneered CDMA, a technology used mostly in the Americas and South Korea. Nokia, based in Espoo, Finland, has built its mobile phone business primarily around GSM, the dominant technology in Europe and other regions.

In June, Nokia cancelled a plan it hatched with Sanyo in February to jointly form a separate company for CDMA products. The companies abandoned the plan because of changes in the market, Nowak said. Now Nokia plans to end its own CDMA research and development and instead work with third-party hardware vendors to create phones with the Nokia brand and a Nokia-like user interface. The ODM phones won't use Nokia's operating system.

Nokia and Qualcomm recently have been embroiled in legal disputes over patents as a longstanding cross-licensing agreement between them nears expiration. The reorganization in San Diego is unrelated to those squabbles, according to Nowak.

Copyright © 2006 IDG Communications, Inc.

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