Reports are starting to pick up on the fact that Qualcomm, the San Diego-based wireless company that has thus far dominated the key cellular standards, is staring an uncertain future in the eye. It seemed like the company would make an easy sweep of the wireless world. As cellular networks transition to high speed 3G, Qualcomm will get a sizable cut of every 3G cell phone sold. But the company is starting to face a major backlash from an industry that seems to be trying to avoid the makings of a Microsoft-style monopoly in its midst.
A major crack in Qualcomm’s plans is Sprint’s recent announcement to spend up to $3 billion on wireless technology WiMAX, with additional support from Intel, Motorola and Samsung. WSJ points out how Intel is finally beginning to take on Qualcomm, and is finding some success.
Qualcomm points out (in the WSJ article) that it owns some WiMAX IP, most of it thanks to Flarion, a wireless broadband technology start-up it bought last year. Then there’s the numerous complaints against the company for monopolistic and aggressive business practices, as well as talks of carriers in developing markets slowing the transition to 3G or building competing GSM networks in part to avoid the Qualcomm royalty ecosystem.
Qualcomm’s response? Our competitors are ganging up on us. They are likely right, but that’s not necessarily a good place to be. While Qualcomm will no doubt make a lot of money from wireless for many years, with wireless companies like Intel, Nokia, and the like on the other side, they could very well lose out on that big Microsoft-style money the company has been aiming for. As the WSJ points out, their stock is down 30% since early May.