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'QualSoft' the next force in the mobile multimedia battle?

MS and Qualcomm join forces to challenge Nokia

What about Intel and Brew?

There are two twists in this tale – Intel and Brew. Partnering with Microsoft makes good sense for Qualcomm – it offers the software house as much as it gets back in the mobile world, and its ogres are not Microsoft but Intel and Nokia/TI.

Microsoft too has reasons to put pressure on Nokia, and it does not need to worry too much about antagonizing TI, which is a pragmatic company that will support any technology that generates revenue for its advanced platforms.

But Intel is the company on whose architectures the bulk of Microsoft's base still depends, and – as Intel itself flirts with new partners, from Nokia to the WiMAX community – it has the power to put pressure on Microsoft as no other company can.

In their traditional markets, the two remain inextricable and inter-dependent, and neither will do anything to damage an alliance that has worked extraordinarily effectively. But as those markets become, gradually, a smaller percentage of the hi-tech whole, the Wintel coupling may prove, in newer sectors, a square peg in a round hole.

But the shift of both members towards new ecosystems and sometimes conflicting friendships will be as slow and fraught as that of any twin siblings seeking to make their own way in the world.

The other wrinkle is Qualcomm's own ambition as a software house. The chipmaker, like Nokia, has recognised that it can boost its margins and its overall control of its market by offering a complete environment, including software, to its customers, and that many of the factors that make a difference for operators, such as easily customisable user interfaces and over the air distribution/maintenance, lie in software – but software that can still deliver more effectively when integrated with and optimized for the hardware architecture.

The cornerstone of this strategy has been Brew, the content download platform, and Qualcomm has added significantly to this over the past year with acquisitions such as Trigenix and elata, which have contributed graphics rich, customisable user interface and multi-network content delivery capabilities.

Such moves have strengthened CDMA and extended the appeal of Brew to other platforms, notably W-CDMA, giving it an entry to previously closed markets such as Europe, as the O2 deal showed. In future, the same functionality can be adapted for other platforms such as dual mode cellular-Wi-Fi and OFDM-based networks.

Most recently, Qualcomm formed a venture with Chinese company TechFaith to enhance user interface techniques to market in China and elsewhere. The sticking point for the Brew family, as for other Qualcomm technologies, is that however functional they may be, they carry the burden of royalties – in Korea, for instance, the major cellcos, backed by the government research institute, created a Brew alternative, WIPI, to reduce their payments.

So in optimising Windows for its chipsets, will Qualcomm start to sideline its own Brew technologies in key emerging markets, or will we see some integration of the two over time, to strengthen the mobile aspects of the Microsoft platform? Not that a Windows-Brew convergence gets round the royalties question, of course, but it could broaden the mobile reach of both platforms and give them a leg up in the battle to dominate the keymarket for multimedia handsets and other devices.

The partners are already talking in terms of offering handset makers not just a reduced time to market for CDMA/Windows devices – by a factor of "weeks to months" over integrating the technologies themselves – but also supporting a range of media applications including mobile TV.

Future alliances and OFDM?

Which brings us to the thorniest issue for Qualcomm right now – how to maintain its powerful position in the wireless world once that world shifts steadily away from CDMA technologies and towards OFDM?

We have seen Qualcomm building up its own OFDM arsenal, to challenge the front runner in the field, WiMAX, and also kicking off the bid to assert intellectual property rights in WiMAX itself.

At this early stage, when there are no real products based on the mobile variant of WiMAX, 802.16e, this is largely a game of bluff and confidence. WiMAX appeals to some vendors and operators as a mobile platform that could potentially exclude Qualcomm from the game altogether; Qualcomm is determined to throw confusion and doubt over that view and dent confidence in 802.16e, while offering its own OFDM roadmap, based largely on the Flash OFDM technology it acquired with Flarion and its own FLO broadcasting system.

Support from Microsoft for these technologies would be a valuable confidence boost, regardless of any revenue it might generate. Microsoft, though enthusiastic about the impact Wi-Fi can have on the rate of PC upgrades and the adoption of other Windows devices, has not shown its hand on WiMAX at all, another sign of a divergence from the Intel path.

Microsoft support for a Qualcomm technology in this area, or licensing of its intellectual property, would be a huge boost in terms of market credibility, despite the fact that Microsoft’s influence on mobile equipment makers remains peripheral.

The most likely cooperation in this area, in the short term, may centre on the MediaFLO mobile broadcasting system. With Intel and Dell talking up TV to the laptop, and Microsoft fighting hard in the wireline IPTV space, broadcasting cannot be ignored and, as with MSN, Microsoft may seek its own channel to market rather than merely supporting mobile TV standards in Windows and its other platforms.

In that case, Qualcomm’s 700MHz MediaFLO broadcasting network in the US, combined with Windowsthat boast a unified interface with PC and IPTV systems, could be a strong option for the US market.

Much of this is speculative at this stage, and the partnership of two powerful companies that are under unprecedented pressure can be seen either as a strong response to threat or an alliance of desperation. But even before we consider next generation technologies, the combination of Windows and CDMA will provide phonemakers and operators in the CDMA sector with a new bridge to the convergence mainstream, and offer an influential combination for the emerging mobile multimedia market.

The ball is now firmly back in Nokia's court.

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