Qualcomm's New IPR Fight
By Peggy Albright
A funny thing happened after Qualcomm's Dec. 1 announcement that it "applauds" AT&T Wireless Services' decision to adopt wideband-CDMA for third-generation wireless services: AWS and some of the prime vendors for the planned network claimed they're not buying anything from Qualcomm.
Thus the latest twist in Qualcomm's historic intellectual property rights battles seem to pit the technology giant against the U.S. operator it has so far been unable to persuade to its camp. Qualcomm's stock, trading around half its 52-week high of $200, saw a boost last week after the company announced support for its technology from China's government. But in the United States, the animosity continues. The vendor says it looks forward to the chance to supply W-CDMA chipsets to manufacturers supporting AWS' W-CDMA deployment. AWS spokesman Ken Woo says that to suggest AWS' vendors will use Qualcomm's technology is a distortion.
Over at Lucent, one of AWS'vendors, there's a similar sentiment: "They [Qualcomm] certainly don't have a lock-hold on any of this stuff," says spokesman Sam Gronner.
The new war of words may be one of the more intriguing quirks unleashed with AWS' surprise announcement two weeks ago that it plans to add GSM to its networks and eventually migrate to W-CDMA. The CDMA industry had hoped for some time that AWS would admit it missed the boat when it picked TDMA as a 2G technology, swallow its pride, and switch to the Qualcomm-invented technology. AWS essentially acknowledged the former, and this new plan enables the company to worm its way out of TDMA. But AWS picked CDMA's enemy, GSM, as the path to 3G. What's more, the operator chose Qualcomm's technology of last resort, W-CDMA, instead of Qualcomm's preferred cdma2000 technologies for the 3G system. While those decisions were not surprising in light of AWS' history with TDMA, AWS insists Qualcomm went overboard by suggesting it will partner with the CDMA giant.
But it could happen, even if indirectly. Seeping into the discussion over IPRs was a very unusual cross-licensing deal between Qualcomm and Texas Instruments last week, through which the two companies essentially agreed to share all of their respective technologies. Such deals usually, though not always, make royalty payments unnecessary. While those terms were not disclosed in this announcement, it goes without saying that any financial and technological benefits that TI gains would make its solutions even more attractive to its customers, particularly those buying components in large volumes for a company the size of AWS.
As the prime semiconductor supplier to both Ericsson and Nokia-both relatively minor CDMA players-and by far the market leader in handset chips, TI can now provide CDMA technology to its customers, which even further strengthens its position in the device market. And Qualcomm, in return, can use TI's DSP and analog expertise and supply chips for all of the wireless standards that TI works in, such as TDMA, W-CDMA and, perhaps more importantly, GSM, which Qualcomm desperately needs.
"This legitimizes everything" for TI, says Dataquest analyst Stan Bruederle.
Underlying the whole spat is a notable omission from the AT&T strategy: How Nokia, one of AWS' prime infrastructure contractors, along with Ericsson, Lucent and Nortel, will participate. The Finnish vendor is one of the few companies in the world that has not yet licensed any parts of W-CDMA from Qualcomm, though it does have some of its own and other vendors' W-CDMA technologies. The world's top handset vendor, now basking in its first infrastructure deal with AWS-a $1 billion contract-is keeping the industry guessing as to how it plans to build this network without making a truce with Qualcomm.
"If Nokia's going to provide back-end infrastructure, they're going to have to have a license with Qualcomm," insists wireless data industry consultant Andrew Seybold.
But the Finnish vendor doesn't see it that way, emphasizing that W-CDMA, like GSM, is an open standard. Says Nokia spokesman Keith Nowak: "It's not a matter of doing business with one company, because no one company owns W-CDMA."
And why would Qualcomm cross-license its technologies with a company like TI that already dominates the handset market? "They must be thinking this will allow them to quickly get into the second tier of handset suppliers," says Will Strauss, president of Forward Concepts. "They can't get into the top tier immediately because TI is there."
But maybe, just maybe, there is a benefit for Nokia here. While Qualcomm insists the deal with TI does not include "pass-through" IPRs for TI customers, some observers speculated that the agreement may provide an indirect way for Nokia to get access to Qualcomm IPRs without losing face.
Says CDMA follower Ira Brodsky, president of Datacom Research Co.: Qualcomm probably would live with that.
wirelessweek.com |
