Here is a long (6-page) article on QCOM/BREW from
123jump.com
BREWing Applications Over the Air
Jul 24, 2001, 02:35 PM ET
By Adam Smith, Powered By: 123jump.com
Mobile phones have now outgrown the fledgling stage when they were being used as talk-only devices. Today they perform the function of data-processing platforms. Consequently the wireless industry is increasingly seen following in the footsteps of the PC industry.
For instance, Qualcomm (QCOM), the developer of the Code Division Multiple Access (CDMA) cellular technology, states that the wireless-data industry today is where the PC business was 20 years ago. In the ‘80s, the combination of Microsoft’s (MSFT) and Intel’s (INTC) marketing efforts, known as “Wintel,” achieved tremendous success not because it was the best possible option, but because it partially met the dire need for standardization.
But the PC market is saturated now. According to a Gartner Dataquest report, in the fourth-quarter 2000, growth in the United States was just 6.4%, or 13.2 million units over the corresponding period a year ago, which makes it the most sluggish period in seven years.
The situation in the mobile-phone market is different. Dataquest reveals that worldwide sales of cell phones reached 96.7 million in the first quarter this year with total sales expected to amount to some 500 million units by the year-end.
However promising such projections may seem, handset makers could fall on hard times for the rest of the year. Bryan Prohm, senior analyst with Dataquest, is cited by the International Data Group as saying that given the depressed new wireless-subscriber market, the replacement market is fast-emerging as the largest segment of annual sales.
Software is the Shelter
How then can the mobile-phone sector overcome these grim prospects? Software seems to be the answer, the shelter, as it was in the case of the PC sector. Creating applications, putting a value on them and selling these new services to consumers, seems a good way of making profits.
Another major problem is the lack of a common standard for wireless applications today. Developers have to overcome diverse programming environments and operating systems, all with their own unique requirements.
Most devices on the market use proprietary software layers and interfaces, each developed by an independent manufacturer. It often takes months to make an application fully compliant with the particular specifications of a separate device.
Also, in order to secure a channel for reaching wireless subscribers, third-party developers have no alternative but to establish a relationship with a device maker or carrier.
Consequently, many big players are coming up with propositions for a de facto standard for wireless software. The winner in this race, according to analysts, could appear as the next “Wintel.”
“There’s a battleground out there. The stakes are big,” said Samuel May, a wireless analyst with U.S. Bancorp Piper Jaffray, ”The computer industry settled on one operating system. The cellphone market is bigger than the computer market.”
Let’s BREW!
Qualcomm became the latest company to enter the wireless-software market. For a long time now, it has been the leading player in the CDMA market, licensing its CDMA chips and integrated circuits to some of the most-authoritative handset makers including Hitachi (HIT), Fujitsu (FJTSY), Hyundai, LG (LGI), Samsung and Toshiba (TOSBF).
Decelerating mobile-phone sales, which hit the company’s profitability, pushed Qualcomm to develop another source of potential revenue - the Binary Runtime Environment for Wireless, or BREW for short, that it announced in January 2001.
The BREW platform allows developers to create applications for any cell phone that has a Qualcomm chip inside, regardless of who in fact, produced the device.
Currently, BREW supports CDMA-enabled phones only, but porting it to other chipsets using the Global System for Mobile Communications (GSM) or Time-Division Multiple Access (TDMA) technology, for example, is an easy matter and Qualcomm is prepared to do that, according to Jeremy James, director of marketing for the company’s new Internet services division.
Exposing the Underlying Power
“If a user doesn’t like the applications on the phone, chances are he will simply dislike the phone itself,” James is reported to have said recently. “BREW exposes the underlying power in the device’s chipset to developers and enables applications to access functions in a standard way, so apps can be added, removed, or changed by the user.”
BREW gives the opportunity to smaller companies to develop the required software and this is likely to create a diversity of wireless applications, some of which may prove more intelligent and efficient compared with previous integrations.
Additional benefits to developers include access to Qualcomm CDMA Technologies’ Wireless Internet Launchpad feature software. This provides system extensions regarding multimedia, connectivity, positioning, user interface and storage functionality.
According to Qualcomm, device manufacturers will also benefit as they will be able to introduce new products faster because BREW applications can be easily loaded on all devices based on one platform.
But the question is, will the company succeed in attracting enough developers signing on, which will in turn encourage other manufacturers to join in?
Carriers Will Still Want to be in Control
Carriers in turn will be able to offer their subscribers a much broader range of wireless-data applications, content and services. According to a CommWeb report, they will surely go for this because they should be behind any platform that encourages users to spend some extra minutes on their phones.
Streaming audio, MP3s, online gaming and a bunch of other applications could create new revenue streams for carriers. But this is not expected to happen overnight as carriers are not likely to drastically change the way they offer services soon.
Speaking to eWeek, Rob Chandhok, senior director of business development at Qualcomm, said, “Don’t kid yourself, the carriers will still want to be in control.”
To date, the company has secured agreements with VerizonWireless and Leap International Wireless (LWIN) in the United States, Pegaso in Mexico, and Korea Telecom Freetel. It says it intends to get the support of more major carriers in the months to come.
Hopefully, Qualcomm will succeed in its endeavor. It has already managed to bring some promising players to its side. Among the most enthusiastic companies building products and services around BREW are Launch Media (LAUN) and MP3.Com (MPPP).
Those Willing to BREW
According to its public statement, Launch will utilize BREW with its Internet radio player Launchcast, a music service allowing members to design their own music station with high-quality streaming audio or video. For its part, MP3.com unveiled plans to offer its customers on-demand access to music over BREW-enabled devices.
Qualcomm has also enticed Wireless Knowledge, its joint venture with Microsoft, into building packaged software and custom-development services for the platform in order to satisfy enterprise-wireless needs. Wireless NewsFactor’s Dan McDonough observes that being a business-to-business company, Wireless Knowledge will have plenty of opportunity to customize BREW.
Managed mobile-access provider Visto is thinking of incorporating BREW into its hosting services that enable wireless access and synchronization of data with corporate applications. Its latest offering, “MobileLynx,” provides users with direct access to corporate servers over the air. With BREW, they will be able to download exactly the applications they need.
Even more enterprise applications are looming on the horizon with the involvement of big players. In mid-February, Hewlett-Packard (HWP) introduced its Microchai VM, a smaller version of the company’s Chai Java-like runtime environment, designed mainly for mobile devices. It must soon be integrated with BREW under the agreement that HP and Qualcomm worked out.
But there is an interesting detail around this case. HP officials state that Microchai is compliant with Sun Microsystem’s (SUNW) Connected Limited Device Configuration (CLDC) standard for Java devices. However, HP has reportedly refused to submit Chai to Sun’s licensing process for Java.
Microchai has a minimum Read-Only Memory (ROM) requirement of 37 KB; the full CLDC implementation requires less than 128 KB of ROM. At the same time, the BREW runtime software would run on less than 100 KB.
A Place Among Contenders
All this raises the question of where BREW will fit in the mobile software-development race. The most solid offering in the market currently seems to be Sun’s Java 2 Micro Edition (J2ME). “I think it’s safe to say that with 2.5 million existing Java developers, J2ME is facing a bright future,” said Bryan Morgan, founder and managing director of the Wireless Developer Network.
According to Todd Sundsted, chief architect at PointFire Inc., a developer of networking technologies, J2ME will continue to solidify its position in the embedded-device arena, despite the complicated landscape it is faced with at present. Eventually, its benefits will outweigh its costs.
Another powerful contender is Openwave System (OPWV), the union of Phone.com and Software.com, which offers the leading Internet Protocol (IP)-based platform including gateways, browsers, applications, services and support.
It has in turn also signed up a significant number of developers to work on what is said to be the closest thing to a standard Net software that exists in the wireless world. Industry insiders indicate that its influence stems in large part from its help in developing the Wireless Application Protocol (WAP), which most wireless carriers use for Internet connections.
However, it may not emerge as a direct competitor because Openwave’s browser is already part of the CDMA chipset. The company claims that it will be able to work with BREW as well.
There can hardly be found a segment of the technology market that Microsoft hasn’t attempted to penetrate. It has been in this arena too, for over a year, developing Stinger, its operating system for mobile phones.
The Stinger smartphone, which is expected to hit the market late this year for GSM and General Packet Radio Service (GPRS) networks, will offer automatic updates to voice-mail, e-mail and a variety of Web services. Built on a 60 MHz ARM processor, it is expected to sell for $300 to $400.
But Microsoft may not have the whole pie for itself either, because the name of the game in cell phones is partners - and it doesn’t have many of those. On final count, Microsoft is bound only with Samsung and Mitsubishi (MIELY). Analysts also note that the No. 1 software company is just not quite ready to concede the mobile space.
At the same time, Symbian, the consortium led by the U.K.'s Psion, has more than 20 products - based on its Epoc operating system - in the works. In fact, Quartz, the next-generation operating system by Symbian, is the closest competitor to BREW in terms of native-application platforms for handhelds.
What gives Quartz a competitive edge is the big names on its board - Nokia (NOK), Ericsson (ERICY), Motorola (MOT) and Matsushita (MC) (Panasonic.) Yet not all of them have been truly faithful to the cause lately; besides, Quartz is designed to run on high-end GPRS phones - BREW targets the low-end market.
More Royalties Coming up
However, Qualcomm’s success depends on the proliferation of CDMA chips, because in spite of its promises to port BREW to other chipsets, the company has a long way to go.
Meanwhile, GSM is still the leading technology worldwide - it has 65% of the wireless market. CDMA has captured only 20% of the global cell phone market according to The Street.com.
Even so, CDMA is still the dominant technology in the U.S. wireless market. Qualcomm collects much of its revenue from the royalties that other chip makers pay for licensing of CDMA. The company plans to do the same with BREW.
“With a developer base, it creates an incentive for phone makers to use your chipset,” said A.G. Edwards’ analyst Greg Teets, “Plus, they will get something of a royalty. Every time you use BREW in some commercial application, then Qualcomm will get a kickback.”
Take the case of advertising for instance. USA Today reports that at least one company - ISP NetZero (NZRO) - is developing a system called HardCell, that will send marketing signals to phones giving users more ability to act on those messages. For example, the user will be able to receive more information by e-mail or Short Messaging Services (SMS) or call the company directly.
However, some users may not like this kind of interaction, which points out that it will be users themselves who will eventually determine the technology’s success.
Relief and CDMA Magnetism
Besides consumer awareness of the benefits of surfing using a phone, the pace of development of the wireless-Web market is also an important issue.
The CDMA Development Group claims that almost 100 million subscribers use CDMA for their mobile communications today. By 2005, the global CDMA user-base is forecast by the EMC Corp. (EMC) to grow to almost 400 million subscribers; Allied Business Intelligence foresees only 71 million Personal Digital Assistants (PDA) in use by the same year.
Whether these projections will come true or not is a moot point. The technology clearly has the potential to bring relief to developers and make CDMA-based services more attractive even if it fails to become the leading standard.
Phones built to use BREW are expected to hit the market by the year-end, so it will not be a long wait to see if the ripples it has created so far will turn into a giant wave. |
