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Summary:

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 […]

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.

  1. Every monopoly looks invincible just before the empire starts crumbling. IBM, Microsoft, Qualcomm, Intel … eventually Google …

    Especially with Qualcomm – they are attempting to own strategic infrastructure of whole countries – that is likely to have limited success, eventually the abused start looking for alternatives …

    Even patents are only useful in this generation of technology … who will own the next generation … rarely the monopolist who gets busy protecting the monopoly and can’t promote innovations that threaten the monopoly …

    IBM – mainframes, Microsoft – windows/office, Qualcomm – CDMA and family, Google – AdWords …

    .. nuff said …

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  2. Jacob Varghese Friday, August 25, 2006

    I still not clear on this – will Sprint’s new Wimax network be used for both data and voice? Will they be using voip?

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  3. Jesse Kopelman Friday, August 25, 2006

    Jacob, the WiMax network is an IP network. You can think of it as mobile DSL. Any voice will be VoIP. It will support 3rd party VoIP applications tempered only by Sprint’s interest in trying to sell their own proprietary VoIP — to which they have made no comments one way or the other (although their decision to try and enforce some VoIP patents they hold may be a clue).

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  4. The OFDM patents QC owns is really intriguing. WiMAX forum has made lots of efforts to keep the esstential technology patent free. But QC has licensed out its technology to at least two providers. How this is going to affect the WiMAX providers is a big question. Will QC use the patents to sfile WiMAX?

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  5. Qualcomm are pretty much ‘the evil empire’ when it comes to wireless. This makes it sad when good technologies such as Flarion’s get taken over to the dark side.
    I think companies will try and avoid Qualcomms technology wherever possible, because of their bad attitude. If that is the beginning of the end for Qualcomm then so much the better, good riddance!
    I somehow feel that the story isn’t over, though. We haven’t had ‘Empire Strikes Back’ yet. Unless someone finds an antidote to Patents, then things will get pretty uncomfortable for WiMax.

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  6. The sad story is that the upcoming patent issues could have been avoided had Intel purchased Flarion. They chose to pass on that opportunity, thereby leaving all WiMAX companies subject to a heavy toll that will increase costs to everyone including customers.

    The patents in question, that will be used to hamstring WiMAX, relate to mobility and the need to handoff mobile state as a mobile passes from one cell site to another. Handing off state allows for quick resuse of security settings and eliminates the need to reauthorize a user as he/she enters the new cell site. Without this, if a user needs to reauthorize at each cell, moving a voice call to the new cell and not loosing voice packets becomes impossible.

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  7. Qualcomm does not owm the essential, fundamental wimax patents . A Canadian company calle Wi-Lan does. Wi-lan owns essential patents for CDMA-2000 , wi-fi , and Wimax. Qualcomm’s aquisition of Flarion was a huge waste of money.

    Anyone thinking Wimax will be a “royalty-free” technology are mistaken. It comes down to who will aquire Wi-lan, will the Wimax royalty stream belong to Wi-lan, or if they get aquired will it go to INTEL or Qualcomm?

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