Qualcomm Inc says tier-one wireless operators in Europe are trialing its Brew development environment, as the company that dominates the CDMA market looks to score a big software breakthrough in the GMS market on the back of soaring sales of wireless chipsets.
The San Diego, California company plans to double sales of its Mobile Station Modem (MSM) GSM chipsets this year, thereby reaching 86 million, a rate of expansion that has brought a complaint to the European Union by Nokia, Broadcom, Ericsson, NEC, Panasonic and Texas Instruments.
They allege it is bundling its patents with its chipsets to enable far Eastern manufacturers such as Samsung and LG Electronics to build market share in European countries.
But the soaring chipset sales could be the key to software success because they come bundled with Brew APIs, and their soaring sales particularly in the 3G UMTS market, is designed to encourage carriers to switch to Brew, knowing it could be quickly implemented for a substantial portion of their users.
Though Qualcomm owns most of the crucial IP in mobile communications, while GSM provides almost half its royalties, it has failed to build software revenue in European markets, dominated by Nokia Corp. which makes 35% of cellular handsets.
It now hopes to rectify the position on the back of two UK acquisitions. It paid $36m in October 2004 for Cambridge-based Trigenix, a developer of user interface and software development tools, and followed that with the $57m purchase of Poole-based Elata Ltd, which develops a platform with modules that enable mobile operators to manage subscriber data, devices, content, and services.
Herbert Vanhove, Qualcomm’s recently appointed VP for marketing and business development, said the company was now quite prepared to offer software that delivered non-Brew content to phones. But it is clear that the Trigenix, whose software is now incorporated into its uiOne offering, is the hook to draw operators into the whole Brew package.
With the change of mobile devices from basic telephony to delivery of a whole range of data services, the user interface becomes crucial in offering an easy to use environment and crucially one that can be rolled out quickly to adapt to rapidly changing cnsumer tastes.
From there, Qualcomm hopes that operators will be drawn into offering its deliveryOne platform that offers support and delivery of non-Brew data content and services.
The final plank in its offering is marketOne, a hosted, scalable content delivery service that includes media titles, flexible management and monetization, content provider settlement and business intelligence.
Though Vanhove says that most of the operators are looking at UIOne, Qualcomm will have little credibility until it can boast big contract wins. Its one success with UIOne has been for a single handset for O2 but, although it was announced a year ago it has yet to appear one the market.
Working against Qualcomm is the fact that most wireless carriers, led by Vodafone, are looking to support for smaller number of device platforms, and if operators favor Brew as one of the few survivors, they are keeping its extremely quiet.
Nor can it be ignored that Brew is now operating in Nokia’s backyard and the Finnish giant, which has developed its own Symbian-based S60 platform, will do all it can to shut Qualcomm out of the market. The two companies have never been the best of friends and are currently engaged in bruising negotiations over patent disagreements.
With companies of the size of Vodafone, Deutsche Telekom, France Telecom and O2’s owner Telefonica, an enormous amount is at stake for Qualcomm in Europe and the next year will tell if they can make a successful incursion into the market.