Thursday 17 May 2007

Qualcomm, OFDM and 4G (17/05/07)

Qualcomm is the pioneer of next generation wireless technologies. To stregthen their position further, they have also bought over some smaller companies to give them access to all their IPR, etc. Yesterday i read an interview of Bill Davidson, senior vice president of investor relations and international marketing at Qualcomm and IDG news service. Here are some interesting points:
IDGNS: Is OFDM a new area of development for Qualcomm?
Davidson: If you go back to the beginning of Qualcomm, OFDM was considered a path instead of CDMA. The company ended up going down the CDMA route because CDMA was better able to handle all the things you want to do on a wide-area wireless network. We believe that to this day.

IDGNS: Are you planning any more acquisitions of companies with OFDM technology?
Davidson: In the last couple of years, our acquisition activity has stepped up. Flarion was clearly the largest deal of the last few years.

IDGNS: Do intellectual property rights play a big role in your acquisition strategy?
Davidson: They can and, clearly in the case of Flarion, there was a double benefit. First and foremost, we got the only team -- to this day -- to deploy a working mobile OFDM system. We also got the intellectual property rights that came along with the business. Our acquisitions are focused on accelerating time to market on a build-versus-buy decision and augmenting engineering resources more than we're out trying to grab patents.

IDGNS: What's driving all the interest in OFDM?
Davidson: We're seeing interest in OFDM because spectrum is becoming available in the 10MHz blocks and wider. From an efficiency standpoint, there's not really a benefit for OFDM over CDMA. But when you get into wider branches of spectrum, it can be a little less complex to implement.

IDGNS: But isn't 4G -- in which OFDM will play a big role -- all about newer, faster services?
Davidson: I think OFDM is really just a spectrum play. And frankly, we don't subscribe to the "4G" term. The applications that I've heard discussed aren't a whole lot different from what is being enabled over 3G today.

IDGNS: Isn't 4G supposed to be a lot faster than 3G?
Davidson: Many are talking about data rates that we don't even get on landline systems today. Yes, you can enable HDTV over these enormously wide pieces of spectrum. But what is the practical cost to the end-user?

IDGNS: So do we really need 4G?
Davidson: There is an existing roadmap within existing 3G technologies that provide the very same and, in most cases, better performance than some of the new technologies being proposed by other groups.

IDGNS: So WiMax and LTE aren't necessary?
Davidson: I look at LTE and UMB as being comparable; WiMax is not comparable to those technologies in terms of performance. There is a mistake in the premise that whatever comes along -- what people are calling 4G -- will be something that supplants the existing networks. We've been saying for several years that it will be about multiple airlinks existing in the market and making them work effectively together.

IDGNS: Let me come back to WiMax: Why isn't it comparable to LTE?
Davidson: Because its original legacy is borne out of the fixed environment, there are immediate engineering trade-offs and performance issues that you come up against. There is this concept of link budget, or how effective a technology is over the airlink. WiMax suffers from poor spectral efficiency because of its heritage as not being a mobile standard.

IDGNS: Do you see any intellectual property rights issues with 4G?
Davidson: We believe that our OFDM, OFDMA, and MIMO portfolio is among the strongest out there and clearly believe that it's applicable to any OFDM/OFDMA systems. Unfortunately, those who are supporting WiMax are trying to make it sound that the IP (intellectual property) picture with this technology is very clear and that it's going to be simple. The IP picture in 3G is much clearer today than what exists in WiMax. The number of companies claiming IP that can be contributed to WiMax is enormous.

IDGNS: Will Qualcomm be active in WiMax in any way?
Davidson: As we said several years back when many were trying to say that Wi-Fi would come and kill 3G, to the extent that our customers want the integration of Wi-Fi into our chipsets, we'll accommodate that. We've said the same about WiMax. We're being pragmatic and view that it will be in the market.

Nokia CEO Olli-Pekka Kallasvuo said at the company's recent shareholders' meeting that the Finnish manufacturer can't give one company, Qualcomm, a chance to dictate rules for the whole industry. He said the issue is not Qualcomm versus Nokia but rather it's more about Qualcomm versus the rest of the industry. And your opinion?
Davidson: It's amusing to me that Nokia seems to think it's holding up the banner for the entire industry. If not for Qualcomm, there would be far fewer handset manufacturers for them to deal with as competitors and potential competitors. Our business model gives consumers a lot more choice so that Nokia can't dictate pricing into the market. Because we hold intellectual property, Nokia wants to paint us controlling the industry. We enable a lot of competition that causes them a lot of concern -- hence why we're being attacked by them.
The last point is amusing and i tend to agree with Qualcomm on this. Nokia has been dominating the market for long time and its about time other players get in the game.

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