Nokia Sees Opportunity In China's CDMA Field.(INTERNET & TECHNOLOGY)

Byline: MIKE ANGELL

Nokia Corp. on Monday said it plans to build CDMA cell phones in China, stepping up against stiff U.S. and local competition in what one day likely will be the world's biggest cell phone market. Nokia already has a large share of China's cell phone market. But there it just sells handsets that use CDMA's rival technology GSM, Nokia's strength. China, though, a few years ago started promoting CDMA as a way to help stimulate local cell phone manufacturers. CDMA has fewer barriers to entry than GSM. Finland's Nokia wants to compete in CDMA with Chinese firms as well as Chinese market leader Motorola Inc. of the U.S. A Big Opportunity "Nokia's been losing some market share," said Rohit Goel, an analyst with J.P. Morgan Securities. "The local firms have been gaining since China's government first licensed CDMA networks."

GSM, which stands for Global System for Mobile communications, dominates in Europe. CDMA, which stands for Code Division Multiple Access, dominates in South Korea and also has the U.S. edge.

In seeking growth, makers look to China. Only 16% of China's population have cell phones. That's far lower penetration than 80% in Europe and 65% in the U.S.

There are some 200 million GSM cell phone customers in China, Goel estimates, vs. just 10 million for CDMA phones. But the number of CDMA subscribers is growing faster than that of GSM subscribers.

San Diego-based Qualcomm Inc. developed CDMA and licenses the technology to cell phone makers. Those companies, in turn, crank out cell phones for use in CDMA wireless ...