Breakthrough Ideas (continued)
QChat
In January 2002, Qualcomm announced the QChat software application that is designed to allow users to connect virtually instantaneously with other QChat 3G CDMA users anywhere in the world with the push of a button. It is a half-duplex (simplex, like a walkie-talkie) system that provides private calls, either one-to-one or one-to-many.
QChat uses standard VoIP technologies to send digital voice information over IP-based networks in discrete packets. By pressing a push-to-talk (PTT) button on the handset that contacts a QChat Application Server deployed on the carriers IP WAN, the user launches the call path. Serving as the hub, the server then transmits the message to available target(s). When the target user is available, the originator begins talking. The call is sent, using VoIP, through the server hub to a target user or group of users.
Qualcomm entered the winning design based on Nextel’s request for proposals. But, Qualcomm initially developed its solution for the government. Nextel’s CEO indicated that he believed only Qualcomm and Motorola had the learning base required to introduce this technology. He believed that Qualcomm had about a two-year lead over a number of start-ups.
QChat can widen the market beyond the business community to include any groups, from friends, family, and colleagues to ad hoc groups forming around interests in sports, hobbies, or current events. However, Nextel retained exclusive rights for QChat over CDMA networks in North America and anywhere else that it is currently operating. Motorola may hold necessary IP, embodied in iDEN system that Nextel currently uses. Nextel may have had an exclusive use contract with Motorola.
The details of this three-sided cross licensing and the division of markets are not publicly available. This complicated arrangement suggests that Nextel and/or Motorola had patented essential aspects of the PTT architecture. Qualcomm contributes the CDMA2000 and BREW interfaces and, perhaps, other technical solutions to QChat.
Recently, Tony Thornley said, “the arrangement with Nextel is that we will co-market QChat on CDMA around the world.” Qualcomm has done a lot of business development already and expects QChat services to launch in ’03. According to Thornley, “We think that it is a very important element in the growth of voice services, particularly in the enterprise market, around the world.”
This feature will prove to be a powerful competitive advantage when entering new markets, compared to any competitor without the feature. China Unicom was identified as interested by Nextel’s CEO. Nextel International owns Direct Connect (DC) spectrum throughout China, but has yet to deploy it.
Nextel’s Direct Connect(DC)feature lets subscribers connect to other subscribers in a predefined calling group rapidly, between .5 and .75 seconds. This DC feature has generated ARPUs for Nextel that are 20 to 35% higher than the rest of the industry. Plus, DC reduces churn.
Presumably, one technical challenge is lowering the latency of both push-to-talk responses and the set-up time for the connection, which may take up to 10-seconds. This is still inadequate according to Yankee Group, who does not expect roll out until 2004.
Moreover, reliably managing the execution of literally billions of mobile push-to-talk conversations daily that are eventually expected becomes complex, far easier said than done. Because it is IP-based, QChat will connect to any packet-based system provided latency is low, including 802.11, and all devices containing an MSM.
QChat offers these major advantages: (a) BREW support for over-the-air upgrades of the client software; (b) dynamic management of group membership that adds or removes participants at any time; (c) ad hoc creation of chat groups on the handset; (d) access to directory services, including Nextel’s service for Direct Connect, over the network; and (e) easy implementation across multiple devices and in multiple languages. These advantages evidently convinced Nextel that its future dynamic path no longer lay with TDMA but led directly to Qualcomm’s CDMA2000.
The exponential value of QChat that I have yet to see mentioned anywhere comes from its being Group-Forming software. Former MIT Professor David Reed is an Internet “graybeard,” and he was Chief Scientist of Software Arts when VisiCalc was developed. He is known for the eponymous Reed’s Law that encapsulated this fundamental insight:
The Internet’s value comes from the enabling of groups, not just individual-to-individual connections. The scaling law of the option to form a group, 2 to the Nth power, dominates the potential connectivity of Metcalfe’s law, N squared.
Simply put, the power of community building in a mobile network creates an unusually powerful offscale-dynamic explosion in value. A QChat network supports the simple, even ad hoc, construction of communicating groups, which creates tremendous potnetial intrinsic value, that scales exponentially with increasing network size much more rapidly that Metcalfe’s square law. Reed calls such networks Group-Forming Networks (GFN). For a fascinating introduction to GFN, see: reed.com |
