By incorporating Code Division Multiple Access (CDMA) technology into BlackBerry devices, RIM will expand the choices of network providers available to its customers and create the possibility for voice and data transmission.
Currently, BlackBerry owners must sign on for service from data-only providers such as BellSouth's Data Network, Banc of America Securities wireless analyst Rob Sanderson said. In the future, they will likely be able to choose from an array of voice and data providers including Sprint and Verizon Communications.
BlackBerry devices have come to compete with the Palm family of handhelds. RIM's fanciest devices, for instance, come with a Palm-like organizer and a fairly sizable screen for a handheld. They also let consumers exchange email or access the Web without wires. Unlike the pocket-sized Palm, the BlackBerry is small enough to be worn on a belt.
"Licensing Qualcomm's CDMA technologies will enable RIM to expand its customer base to include the growing number of wireless users on CDMA cellular and PCS networks," Marvin Blecker, Qualcomm's senior vice president of technology transfer, said in a statement.
By using CDMA technology, RIM positions itself for a future in which many companies will be expected to provide products that incorporate high-speed data and voice transmission. RIM may use this opportunity to secure partnerships with the large network carriers, thus ensuring itself a spot in this market.
The benefits of RIM's release of CDMA technology will not likely be seen for at least another year or more, however, when network providers, such as Sprint, Verizon and AT&T, have upgraded their networks to 2.5G or 3G, which refers to networks beyond today's second generation, or 2G.
Only when Sprint, Verizon and other carries have upgraded their networks will mobile devices such as the BlackBerry pager be able to handle voice and data simultaneously, similar to how digital subscriber line (DSL) service works. Currently, cell phones that access email and data operate on circuit-switch networks, which act as if a person is dialing into an Internet connection from home.
"Everyone's been expecting them to address the 2.5G systems," Sanderson said. "They're bringing on now a big opportunity, assuming they can sign supply deals with Verizon and Sprint."
RIM is not the only company to plan ahead. In expectation of network upgrades, most of the major carriers and mobile device manufacturers have been developing new products. Recently, Samsung unveiled a cellular phone that plays streaming video. While the company said its product was 2G compatible, most analysts do not expect consumers to use these types of products until the faster third-generation networks are complete.