The LG-Samsung store

Once upon a time, Verizon Wireless was America’s largest cellphone carrier. Today it remains a close second to AT&T — 26.2% vs. 27.5% of America’s 265 million subscribers.

Wandering by the mall Saturday, it struck me that Verizon has become the country’s largest sales agent for two Korean cellphone makers — Samsung and LG.

A decade ago, CDMA phones (then with Sprint PCS or AirTouch), were mostly made by Qualcomm. Soon Motorola started making CDMA phones, and were joined by a number of Japanese makers like Sharp and Kyocera (after it bought out Qualcomm’s handset business in 1999) who adapted the designs they made for the two Japanese CDMA carriers, KDD and IDO (who later merged to form KDDI).

At two Verizon booths on Saturday, there were a handful of smartphones from Palm, Motorola and some Windows Mobile clients. But almost everything else was either from Samsung (#2 in the world) or LG (#5).

Of course, the reason that these two Korean makers are dominating CDMA phone sales is the 1991 decision of Korean industry to adopt CDMA, later ratified by the Korean government. Korean carriers went live with CDMA in 1996, at almost exactly the same time as Hong Kong and the U.S. were also rolling out their first 2G CDMA systems.

Of the top 5 handset makers, Nokia once gave up on CDMA and has recently made a token effort to renter the market. #3 Motorola has all sorts of problems with its mobile phone operations, and its weakness in CDMA phones is just a reflection of its larger problems. #4 Sony Ericsson — with only a minimal presence in the US — gave up on the North American CDMA market five years ago, but still sells CDMA phones in its home market of Japan.

Statistics say that Motorola retains its lead at 35% of the US market — the combined share of #2 and #3 Samsung (18%) and LG (17%). The Q1 2008 stats showed Nokia in 4th at 8%, RIM (North America’s leading smartphone maker) at 5th, just ahead of Sanyo (Sprint’s major handset supplier).

However, I’m curious who’s buying all those Motorola phones, because I don’t see many on sale at the mall. Around here, I do see the Motorola Razr with teens and adults alike, but with adults I more often see smartphones like the iPhone, Treo or Blackberry.

Teenagers and college students seem to favor texting phones with the slide-out keyboard like the T-Mobile Sidekick; here the LG VX9800 and Samsung Glyde help Verizon stay competitive for these customers. That Verizon uses BREW for its downloadable apps means that these LG and Samsung phones have Qualcomm inside.

Andy gets his medal

Last week, Andrew Viterbi got his National Medal of Science. The USC Viterbi School marks the event with a press release and a video.

UCLA issued a press release for another Linkabit founder, Len Kleinrock, who also get his medal the same day. It doesn’t mention Viterbi, who was a UCLA professor before leaving to run Linkabit.

At least MIT — where both men got their master’s degree in EE — mentions both men equally, as does the White House press release.

Paul loves his gPhone

Qualcomm was one of the major cosponsors of Google’s Open Handset Alliance when it was announced last November. Qualcomm had not previously joined other mobile phone Linux efforts, such as LiMo (driven by Vodafone) and LiPS (once driven by France’s Orange).

This week, CEO Paul Jacobs was all smiles with the announcement of the T-Mobile G1, with Google’s Android OS and a Qualcomm MSM7201A processor. Of course, Taiwanese maker HTC has been a longtime and loyal buyer of Qualcomm chips. HTC exactly fits Qualcomm’s business model, which allows new (and presumably less capable) entrants to compete with large vertically integrated incumbents.

Google leverages the same market entry process. HTC doesn’t have the ability to design its own smartphone architecture to compete with the iPhone or Blackberry or various Nokia smartphones. Instead, it has produced probably the widest range of Windows Mobile devices. With the long-rumored G1, HTC is demonstrating its commitment to an open innovation sourcing of technology rather than to Microsoft per se.

Both firms thus have an interest in empowering new entrants, thus increasing handset competition and reducing the power of incumbents. Otherwise, their business objectives are quite divergent.

Google wants its software component to be a commodity so it can make money on another part of the ecosystem, i.e. ad-supported web applications. Qualcomm (like Microsoft) has spent billions on component R&D so it can make money selling those components.

And, in fact, Google has made sure that Qualcomm will not have an exclusive role in supplying Android hardware components. Google wants to commoditize the entire mobile Internet stack, except of course for its near-monopoly on key web applications. So Android adoption is a clear win for Google but has risks for Qualcomm.

One interesting opportunity, not yet tapped, is when will there be a CDMA phone enabled by Android. RIM is selling its Blackberry to all carriers, but otherwise the most exciting smartphones are GSM only: iPhone with AT&T, the G1 (so far) with T-Mobile, and Nokia (perhaps someday) selling to both.

The OHA was launched last November with the two weakest US carriers — T-mobile and Sprint, with the two major US carriers holding out. A month later Verizon also joined in, so three of the four Big Four (and both of the CDMA carriers) are in OHA.

Whatever the Android platform’s pizzaz relative to the iPhone, in the CDMA world it would be a dramatic step forward except for the most hardened Crackberry addict. A quick Google search suggest that all has been quiet since last December on what Verizon plans, although there’s been considerable speculation about Sprint’s needs and hopes to ship an Android phone.

As a loyal Sprint customer going back to more than a decade (and Sprint's cooperation with Cox to deploy CDMA in San Diego), there’s a huge pent-up demand for a good smartphone on their network Will it make it in time for Christmas? I guess we’ll find out soon.