San Diego Business Journal

About 180 wireless professionals gathered at the US Grant Hotel on Nov. 19 and 20 to discuss the future of the mobile handset industry, which is expecting its first slowdown since the introduction of the cell phone in the mid-1980s.

"We are forecasting a retraction of the handset market for the first time ever in 2009," said Mark Lowenstein, managing director of Boston-based Mobile Ecosystems while speaking at the 3G CDMA North America Regional Conference. "Carriers will have to get creative to stimulate handset sales."

The conference was co-sponsored by Qualcomm, which introduced CDMA technology for cell phones in 1989.

CDMA, or Code Division Multiple Access, is a way of transmitting digital signals over wireless cellular telephone networks.

Lowenstein said handset sales, like all consumer electronics purchases, will slow down with the overall economy as the new year begins.

Nevertheless, the industry has some things to be pleased about, according to the CDMA Development Group, which hosted the two-day conference.

Worldwide Subscribers

Subscribers of 3G, or third generation, CDMA cell phones have grown to 590 million worldwide, according to the association. Carriers added 18 million new customers in the third quarter of 2008 alone, thanks to booming sales in Africa and the Middle East.

"The technology that forms the basis of CDMA is a great technology for voice and data. And once operators deploy modern IP networks, upgrading them is cheap," said James Person, chief operating officer of the Costa Mesa-based development group. "If there's a bad economic downturn, there's not a lot of capital expenditure needed to do that."

In Africa, 20 of the 21 wireless networks deployed last year were 3G CDMA networks, he said.

"It was a good showing," he said.

"I think we've just begun with data connectivity being important with developing countries in the world that did not have connectivity," said CDG Executive Director Perry LaForge. "The cost is now low enough."

Meanwhile, carriers Verizon Wireless and Sprint, both of whom use CDMA, have heavily invested in the next generation network technology called 4G that will run on the recently auctioned wireless spectrum that the two have purchased.

Two Networks

Verizon Wireless Vice President Anthony Lewis said that the 4G network, which is expected to launch in 2010, would exist parallel to Verizon's current 3G network, which now has 80 million subscribers in the United States.

Lewis said Verizon's new network, called Long Term Evolution, will be open to any third-party developer and any wireless device , much the way computers connect to the Internet today.

"It really is up to the partners how far they will take this," he said.