Om Malik on QUALCOMM and Flarion ...
>> Qualcomm’s Flarion, a WiMAX End Game?
Om Malik
Om Malik's Broadband Blog
August 11, 2005
gigaom.com
Few years from now, we will all agree, on the road to wireless domination, Qualcomm spending $600 million to buy Flarion was money well spent. With CDMA coming to what Charlie describes as “end of life” and world transitioning to 3G and eventually 4G, Sultans of San Diego needed to make a big play to be part of the carrier’s networks. With Flash-OFDM, they now have the technology, which can be sold to carriers as a likely 4G solution. A little while ago I penned a feature for Business 2.0 on Qualcomm, (sub-required but see below for 1st section) and argued that these guys were scary smart and know how to position themselves in every part of the wireless ecosystem.
But that’s not all. The Qualcomm grip on OFDM patents gets tighter with this acqusition. (Having tracked Qualcomm for a while, one thing I know, no-patents, no deal.) A Qualcomm spokesperson was pretty clear in saying that the real reason they have done the deal is - intellectual property and engineering talent. “That’s the real driver of the deal,” he says, and insisted that they are not buying into a market. “Operators are starting to talk about hybrid CDMA-OFDM networks,” he says.
ABI Research’s Philip Solis, senior analyst of wireless connectivity, says, "We believe that QUALCOMM’s move is a longer-term step to equip itself with the right technologies to offer operators a wider range of choices when 4G services finally arrive."
In addition, FLO technology, one of the leading contenders for mobile TV multicasting, is based on OFDM.” Max Weise, analyst with consulting firm of Adventis points out that, “That this keeps Qualcomm relevant going forward as carriers’ evolve their wireless plans. It also broadens their portfolio of services. Nextel, for example had been quite happy with the Flarion technology. As part of the new Sprint (which has been an old Qualcomm partner-in-arms) we could expect some renewed interest in the company.
"A lot of carriers are thinking about WiMAX, and this slows down that, and gives Qualcomm a play," says Weise of Adventis. Qualcomm insiders tell me that with this deal, and Qualcomm’s previous efforts, the company has a lot of intellectual property in the WiMAX space as well. There is industry consensus that OFDM with MIMO could be the technology of the future even for cellular, writes ABI Research. Alan Varghese, ABI Research’s principal analyst of semiconductor research, says, "Even if productization of Flarion’s technology slows down with the advent of WiMAX, QUALCOMM can still realize revenue from royalties and licensing of Flarion’s considerable IP in OFDM and all-IP traffic."
The technology is also going to help Qualcomm wrest a bigger share of the fast growing, though mostly under the radar 450 MHz-based networks. In Europe, Asia and Latin America, 450 MHz is being used for wireless local loop access. Flarion, can easily bring high speed data, and Voice-over-IP to the table. But most of all, this deal is in line with Qualcomm’s stand (or lack there of) on WiMAX. Qualcomm can now simply tell the carriers - Flash-OFDM works, its easy, and well, it has mobility and best of all you can buy gear from Nortel, Motorola, Lucent or Siemens. Whichever way you look at it, I think this is an interesting move, whose ramifications are going to come to light in years to come. <<
>> The Next Monopoly
As the 3G revolution picks up steam, wireless pioneer Qualcomm may be poised for market dominance that even Bill Gates would envy.
Om Malik
Business 2.0
February 16, 2005
business2.com
The professor couldn't sleep. Again. For six months he had been traveling tirelessly from his home in San Diego to Kansas, pitching a radical new cell-phone technology to telecom giant Sprint. Sprint executives at first told the professor he was nuts. But they humored him, and he kept visiting, each time a little more desperate. On the eve of yet another flight to Kansas, the professor awoke, shaking. He slipped on a bathrobe and began to pace the living room floor in the dark.
He has slept better since -- and now may be about to pull off a business coup that few could dream of. The professor was Irwin Jacobs, co-founder and chief executive of Qualcomm (QCOM). The immediate result of that 1993 trip was that Sprint decided to gamble on Jacobs's technology, a move that, over the next several years, converted Qualcomm from an unknown upstart into a major telecom player. But only now is the more dramatic impact coming into focus. Sprint recently announced a $36 billion merger with Nextel (NXTL). And, largely as a result of Jacobs's decade-plus association with Sprint, the biggest winner in that deal may well be Qualcomm. ... <snip>. <<
About the Author, Blogger, Talking Head: Until recently, Om was a senior writer for Red Herring focusing on the telecommunications sector. Prior to joining Red Herring in July 2000, Om was part of the founding team of Forbes.com where he was a senior editor. His writings have appeared in his book, Broadbandits, and in several newspapers and magazines such as The Wall Street Journal, Business 2.0, Brandweek, and Crains' New York Business. He has received multiple awards for his insightful writing and analysis, and appears regularly in print and on television (BBC, CNBC, and others). In 1999, Om left Forbes.com to join Hambrecht & Quist Asia Pacific as an investment manager, thus crossing over into the venture capital business.
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