BREW In Europe
Over at the Feature, Tom Hume looks at the reasons that Qualcomm has had no success in Europe, and the opportunities for future successes. While his arguments are all correct, he misses the biggest reason QCOMM didn’t succeed at deals in Europe: it doesn’t control the chips. Among CDMA carriers, QCOMM provides almost all the chips, thus by inserting BREW into the chips whether carriers asked for it or not, Qualcomm was able to pull a “Redmond” and bundle in new unproven functionality with an existing monopoly product. This allowed them to circumvent the tortuous 18-30 month sales cycle that most technology vendors need to suffer through in order to get a deal, and get installed with wireless operators. Qualcomm, therefore, merely had to convince the carriers to turn on a functionality that their phones already had built-in. A brilliant strategy, for sure, and QCOMM was ahead of the game when they started it. But it simply didn’t translate at all to markets where Qualcomm didn’t sell the phone’s chips. Now, what is the opportunity for Qualcomm in Europe going forward, well, Mr. Hume is right that uiOne is interesting, but uiOne is unlikely to be implemented by carriers who are not also BREW users. There are other options available. The real opportunity for Qualcomm in GSM carriers is the fact that the 3G migration is nigh, and 3G is a CDMA technology in which, you guessed it, Qualcomm has the best and longest chipmaking expertise. So if Qualcomm secures deals that put its chips in Europe’s 3G phones, the path for other Qualcomm solutions becomes easier. However, it is unlikely that Qualcomm will ever hold as strong a stranglehold on the W-CDMA chip market as they do in 2G CDMA – the TIs, Nokias, Ericssons, Samsungs, etc. are all unwilling to yield their chip business to San Diego.
