Is Qualcomm now the most important company in wireless?
I know the big news today is that Verizon now has the iPhone; forgive me, but I’m at a loss to understand all the hoopla around this one. We all knew this was coming. My out-on-a-limb 2009 prediction was that Verizon would get the iPhone before the end of 2010, and that the first edition would support LTE – the LTE part being the biggest risk as the Verizon deployment has just begun), and I’m not sure as of this writing whether the Verizon iPhone has an “LTE-ready” chipset in it (meaning that the device could be usable on LTE networks, with Verizon turning that capability on eventually or selectively – and I’m personally assuming as of now this is not the case) or if it’s based on an older design that really is CDMA-only, which, IMHO, would be a shame and perhaps a reason to wait for the next one – new iPhones are now an annual event, after all, and an LTE-based iPhone can’t be far off. More on the significance of LTE later this month.
But what about CDMA, which with the advent of LTE is now on the decline? And, more importantly for our purposes here today, what about the significance of CDMA pioneer and industry leader Qualcomm? Not to worry – just as CDMA is evolving into OFDMA (OK, a stretch, but just consider the analogy for the moment), Qualcomm is similarly evolving to catch all of the next big waves.
As you may have heard, Qualcomm just snapped up WLAN chipset leader Atheros, a company I’ve long admired. You may also recall that Qualcomm also bought MIMO chipset pioneer AirGo Communications a couple of years ago, that Qualcomm developed a 4×4 MIMO chipset (which, granted, doesn’t appear to be on the market at the moment), has an industry-leading handset processor in the form of the ARM-based Snapdragon, and perhaps most importantly that Qualcomm is a leader in intellectual property ownership – as in, they have a lot of patents, they are getting a lot more via the Atheros deal, and they know how to use them. And it’s believed (by me and many others) that the Verizon iPhone has a Qualcomm chipset.
Of course, Qualcomm is also a company that occasionally pursues really boneheaded directions, like the now-cancelled MediaFLO mobile TV service. But everyone makes mistakes (although in this case the company made a ton of money on the sale of the spectrum involved in MediaFLO, so perhaps “mistake” is overstated here), and their core chipset/IP business is doing just fine.
I have long said that Intel is the most important company in wireless. Intel, however, is likely to lose this coveted spot because (a) they’re just not doing much in handset chipsets, (b) they really miscalculated when they dropped ARM (again, everyone makes mistakes, but ARM, Windows 8 or not, remains a key element in many implementations), and (c) Qualcomm is on a serious uptick here. Think about what’s required in future handsets: a hot processor, LTE, and 802.11n. Now think about owning all those patents and either (a) derailing the competition with an army of lawyers, (b) getting lots of lucrative licensing and royalty revenue, just like they did with CDMA, and/or (c) selling a ton of chips that in many cases will embody almost all of a given solution. Sure, CDMA is at the end of its useful life now, but Qualcomm owns over 750 patents in OFDM/OFDMA. They are a powerhouse that’s been on the verge of dominance for some time. And this could be their year.
