Will OFDMA Replace CDMA?

7/28/2006

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10:00 AM -- Code Division Multiple Access (CDMA) is the dominant technology in cellular today, forming the basis of 1XRTT, EV-DO, and UMTS. I remember the “that will never work” arguments against it from the early 1990s -- and that was well before the current era of marketing counterclaims as the basis for analysis. Instead, the disparagement was coming from guys with “Dr” in front of their names. Let’s just say the above is a common first reaction for anyone who’s not looked in detail into how CDMA works. Regardless, big success.

But another technology, Orthogonal Frequency-Division Multiplexing (OFDM), has been making the rounds as the basis for .11a/g/n as well as WiMax. There’s a variant of OFDM that’s directly comparable to CDMA, and that’s Orthogonal Frequency Division Multiple Access, or OFDMA. While not yet a household name, OFDMA is actually poised to replace CDMA over the next 10 to 15 years.

While “that could never happen” might be a reasonable response here, the reasons for this likely evolution are simple. The company that makes the most money off CDMA, Qualcomm Inc. (Nasdaq: QCOM), isn’t going to be able to do that forever. Patents, and the intellectual-property (IP) revenue they generate when licensed, have a useful life of a few years. Once CDMA has been beaten to death, it’s time to move on to something else as the next cash cow.

And that just could be OFDMA. Qualcomm recently acquired Flarion, which continues to generate quite a bit of OFDM IP. And if WiMax catches on, look out -- OFDM and OFDMA could be the next big IP battlegrounds. And we may thus move on to another core wireless technology, if for no other reason than that’s where the money is.

— Craig Mathias is Principal Analyst at the Farpoint Group , an advisory firm specializing in wireless communications and mobile computing. Special to Unstrung