Qualcomm brews plan to boost struggling lines

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 newfangled technologies.

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,’’ Strauss said.

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 said.

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 constraints.’’

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 degree, Snapdragon?

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 offerings.

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.