SAN DEIGO -- Qualcomm Inc. is currently riding high amid strong demand--and
constraints-- for its traditional cell-phone chip products.
During the company’s Uplinq developers’ forum here this week, Qualcomm, based
here, launched a number of new initiatives for many of its lesser-known
products. But some of those wares--such as its Brew operating software (OS)
technology, the MediaFlo mobile TV line and Snapdragon chip products--are either
lagging or losing steam.
The company also hopes to jumpstart--and generate some new business--for its
embryonic efforts in 3-D chips, augmented reality, MRAM, peer-to-peer and other
Qualcomm is rushing into new markets for good reason: It needs some new
engines for growth beyond its traditional cell-phone chipset business. That has
not been easy, as it is struggling to expand beyond its core market.
For example, Qualcomm may unload or restructure its ownership in MediaFlo
amid lackluster sales, according to reports at Uplinq. On the IC side, Qualcomm
has been shipping Snapdragon, a chip line for mobile Internet devices (MIDs).
Snapdragon is gaining some traction in limited smartphone designs, but the chip
is ''late to the party’’ and behind Texas Instruments Inc. and others in the MID
chip space, said Will Strauss, president of Forward Concepts Co.
Another concern is Brew, Qualcomm’s software platform that is billed as an OS
for mobile devices. Some see a shakeout in the mobile OS world and Brew could be
on the outside looking in--or one of the losers--especially as the development
community embraces its rivals, such as Apple’s iOS, Android, among others. Brew
is still viable and has generated a lot of traction, ''but only in CDMA,’’
However, the tide is turning in favor of Brew, said Paul Jacobs, president
and chief executive of Qualcomm. ''We’re getting a lot more support’’ for Brew,
Jacobs told EE Times in a brief interview. AT&T, China Telecom, Korea
Telecom, Verizon and others have endorsed or renewed their efforts with Brew, he
In another positive development, Qualcomm’s cell-phone chip business is
robust right now. ''There is a lot of demand,’’ he said. ''We have supply
Qualcomm had a somewhat sluggish start in its 2010 campaign. In 2009, the
company was ranked as the world’s sixth largest chip maker, up from eighth place
in 2008, according to Gartner Inc. It had sales of $6.49 billion in 2009, down 1
percent over 2008.
But Qualcomm slide from eighth to 12th place in the rankings for the first
quarter of 2010, according to iSuppli Corp. For some time, the average selling
prices (ASPs) for Qualcomm’s baseband chips have fallen amid competition from
Broadcom, Infineon, MediaTek and ST.
In the June quarter, the company has regained its momentum. Royalty revenues
are up. And shipments for the company’s MSM cell-phone chip line is ''strong at
93 million (to) 100 million’’ units, up from 93 million in the previous period,
said Mark McKechnie, an analyst with Gleacher & Co., in a report.
That’s not what worries analysts, carriers, developers and OEMS, however.
Qualcomm will likely remain the leader in the baseband market. At Uplinq, many
were likely having the same thoughts: What will happen to Brew, and, to a lesser
Brew was launched nearly a decade ago as a software programming platform for
mobile devices. Earlier this year, Qualcomm rolled out Brew Mobile Platform
(MP), which is said to be a ''mass-market mobile operating system platform.’’
Brew is apparently the software platform for 250 million mobile devices
worldwide today, according to Qualcomm. In total, Brew has generated a total of
some $3 billion worth of business.
''Brew MP is a low-end handset OS which, along with Qualcomm’s (chip)
architecture, will target smartphone functionality at feature phone prices,’’
McKechnie described in his report.
But Brew is finding itself lost in the developers’ shuffle amid the sudden
craze for new and competitive offerings, such as Apple’s iOS and Android. Other
mobile OS/software platforms include Research In Motion's BlackBerry,
Microsoft's Windows Phone 7, HP/Palm’s Palm/WebOS and Nokia's various OS
Qualcomm’s Jacobs sees a fragmentation in the mobile OS world. Others see a
shakeout. This poses a problem---and an opportunity--for Qualcomm. The company’s
chipset group not only supports Brew, but also Android, Blackberry, Palm,
Windows and others.
Qualcomm’s chip group is software agnostic and it lets the customer decide
which OS to support. Obviously, though, Qualcomm would prefer to sell and bundle
Brew with its chipsets.
One big carrier, Verizon, has seen a meteoric rise for its sales and
development activity in the Android camp. In contrast, the carrier has seen
''declines in our Brew revenues’’ over the last year, said John Stratton,
executive vice president and chief marketing officer for Verizon.
''The situation concerns us,’’ Stratton said during a keynote at Uplinq. “Is
the Brew business worth saving? We are still committed to the Brew platform.’’
Still, there is an issue for Verizon and others: There are too many mobile OS
offerings and carriers must make some tough choices and lay down ''the right
bets,’’ he said.
Verizon claims to have 56 million devices in the field, which incorporate
Brew. But for some time, Verizon’s efforts with Brew have been in a ''frozen
state of animation,’’ he said.
To jumpstart Brew, Verizon Wireless this week rolled out an Open Catalog
program for Brew, thereby enabling more applications for the OS technology. It
will also help reduce developers’ time to market, while allowing them to market
their applications directly to consumers.
Verizon has also reduced its porting and certification costs for Brew
applications. It also made available for customers the so-called Xiam, which is
Qualcomm’s recommendation engine for mobile devices. This is ''really a
revitalization of the Brew experience for our customers,’’ he said.