BREW of course, like like all software, is very scalable, and future costs only require paying for things such as R&D for future versions/upgrades, sales, developer support, etc. The long-tern, sustained revenue from BREW, however, is anyone's guess at this point. My feeling has been that any revenue from BREW is just a bonus for qualcomm's fortunes, because it's main purpose IMO is to enable and foster the developer community to support the deployment wireless applications, without which consumers would never accept wireless data. 3G is only as useful as BREW (or java or palm OS or M$) allows it to be. In that sense, I think of BREW costs as being similar to those currently being listed in QSI (ie, money invested to increase the marketplace for CDMA).
Of course this avoids your original question of what possible upside does BREW represent for QCOM. Something is better than nothing, i guess, but i recently had a paradoxical thought. Rampant consumer adoption of BREW would increase the replacement cycle of handsets (canabolizing to some degree royalty and chipset sales). Consider how many more PC's would be sold if internet explorer and MS Office were hardwired into a PC. BREW enables consumers to upgrade all software features of a phone without buying a new handset, which of course, has not been the case to date. Interesting dilemma, of course, but not something that concern me at this point as a QCOM investor. |
