Feeds

WCDMA wins boosts Qualcomm earnings

Hang on, aren't they supposed to despise the Euro-commie 3G protocol?

  • alert
  • submit to reddit

SANS - Survey on application security programs

Those of us you who like to view the Qualcomm story as a parable of American isolationism and bull-headed stupidity - and that's a narrative Qualcomm executives and their creepy, militia fringe supporters (including Qualcomm sock-puppet Stewart Alsop) have done little to discourage in recent years - have one slight problem to contend with.

It isn't entirely true.

Although the bare-knuckle San Diego pugilist makes a virtue of being unpopular, it's actually a hell of a more pragmatic company than its shrill marketing would have you believe. For a few years it's been determined to portray its own version of CDMA, CDMA-2000 as the version that the rest of world will eventually adopt, as opposed to the technically inferior but more widely supported WCDMA standard, it's quietly and carefully positioned itself to win whichever standard becomes ascendant. Which is a very smart move.

The headline earnings saw sales of Qualcomms chipsets rocket: QCOM earned $1.1 billion, up 27 per cent from the previous quarter. This was due to the recent range of 2.5G phones despite having a slightly lower average selling price (this is how Qualcomm determines these royalties) than their predecessors. QCOM says it will ship between 105 and 112 million in the next year, a drop in the ocean compared to the vast quantities of handsets shipped using the global standard GSM standard. (Nokia and Motorola each estimate the global market to be in the region of 400-400m units) So you can see how economies of scale desperately handicap Qualcomm.

But although it talks tough, it's actually been stealth-selling systems based on the WCDMA alternative that it so vehemently disparages. The WCDMA licensees must actually pay a royalty to Qualcomm, so in a way it can't really lose.

"Twenty-seven subscriber licensees reported sales of [Qualcomm's own] CDMA2000 1X products and seven subscriber licensees reported sales of [the unspeakable alternative] WCDMA products.

"Twelve infrastructure licensees reported sales of CDMA2000 products and seven infrastructure licensees reported sales of WCDMA products"

So as you can see, WCDMA is increasingly important to Qualcomm's business.

Some years ago, Qualcomm mulled, but rejected an ARM-like licensing model in which it would position itself as the CDMA expert to all the world's 3G carriers, and open the chipset business to encourage multiple suppliers. That was rejected and it chose instead to market its own partisan flavor of CDMA as the sole supplier (of this CDMA2000 standard), and pour a relentless marketing barrage of horseshit on the WCDMA alternative. Unfortunately that left Qualcomm as the only supplier of its own CDMA flavor of chipsets. As a result the Qualcomm-CDMA industry moves at a glacial pace, and no market endures a single-supplier monopolist for very long.

Several anguished QCOM shareholders are quite aware of this and have been muttering to us about "class action" for some time, reasonably reckoning that Qualcomm could take a much smaller share of a much bigger market, rather than a vast share of a tiny market, and be rather better off.

We surmise that Qualcomm has wisely recognized this, and is bending quite pragmatically to satisfy all comers. Which is good news: the company pioneered CDMA and deserves to reap the reward. The only trouble is the anti-WCDMA marketing now looks distinctly hypocritical. And the company has to lure those militia rednecks who have formed the mainstay of its propaganda efforts in recent years down from their caves. ®

Related Stories

Trade Wars II: China shuns Qualcomm - no CDMA tax!
Qualcomm monoculture is 'killing American wireless'
US 'doesn't need wireless data' - readers

3 Big data security analytics techniques

More from The Register

next story
Virgin Media so, so SORRY for turning spam fire-hose on its punters
Hundreds of emails flood inboxes thanks to gaffe
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
AT&T threatens to pull out of FCC wireless auctions over purchase limits
Company wants ability to buy more spectrum space in auction
Turnbull leaves Australia's broadband blackspots in the dark
New Statement of Expectations to NBN Co offers get-out clauses for blackspot builds
Facebook claims 100 MEEELLION active users in India
Who needs China when you've got the next billion in your sights?
Facebook splats in-app chat, whacks brats into crack yakety-yak app
Jibber-jabbering addicts turfed out just as Zuck warned
Google looks to LTE and Wi-Fi to help it lube YouTube tubes
Bandwidth hogger needs tube embiggenment if it's to succeed
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.