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

MS and Qualcomm join forces to challenge Nokia

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Analysis Qualcomm's last major venture with Microsoft was Wireless Knowledge, a failed foray into mobile enterprise email that nevertheless highlighted the companies' ability to think ahead of major wireless trends.

The two giants' new collaboration is more ambitious and has far greater disruptive potential, offering a tightly integrated combination of Windows and CDMA or W-CDMA that does not only cut time to market for ODMs, but will produce the first 3G Windows smartphone and a strong multimedia device platform that could build a bridge to the mainstream PC and IPTV worlds for CDMA operators, and therefore strengthen their fixed/mobile convergence hands, while boosting Qualcomm’s already advanced multimedia content capabilities.

Microsoft may be the weakest of the high level operating systems in mobile phones, but it has huge power in other key convergence platforms such as home and portable media centers; and it brings a credibility boost to Qualcomm's bid to extend its reach beyond the warmth of its CDMA homeland - a boost that could, in future, stretch to support for the chipmaker in the brewing battle over OFDM broadband wireless platforms.

There are many complications in the way of any attempt to create a Wintel-style alliance for the next generation mobile world, a possible extension of the current handset and patents agreement.

One is how far Qualcomm's own software ambitions, enshrined in the Brew environment, will have to be adapted or subsumed to Microsoft; another is the relationship with Intel, Microsoft's most important partner and Qualcomm’s beête noir. Nonetheless, the two new allies have made an important first step in what could prove a major force in mobile multimedia, and a challenge to their mutual enemy, Nokia.

Qualcomm and Microsoft have a lot in common, and not just intense scrutiny by anti-trust authorities and huge market influence. They share some key strategic goals, notably leadership of the emerging mobile content and media industry, and control of the device architectures for this sector. They are both venturing out of markets where their dominant position is almost unchallengeable in to new waters where they face different and powerful competitors.

This means they also share several common enemies, most importantly Nokia. So, while the close alliance hinted at by last week's announcement of a smartphone collaboration may be seen in parts of the wireless industry as the gathering of the forces of darkness, it is also highly pragmatic and shows the two giants huddling together for warmth as they face increasingly critical challenges in the world of ubiquitous connectivity and mobile multimedia.

Microsoft is looking for a new familiar that can carry Windows into its chosen new markets, in the same way that Intel does in the PC world, but has largely failed to do in mobile media; and Qualcomm, beset by an unprecedented alliance of its opponents, will welcome a powerful new friend to strengthen its current CDMA platforms and even add credibility to its attempts to take a leading role in the next wireless generation, dominated by OFDM technologies.

The handset deal

So could Wintel morph, in the wireless world, into QualSoft?

Certainly, even a surface reading of the new agreements indicates that this is an important coupling, and that is without taking into account the likely extensions of this initial collaboration that will take place over the coming months and years.

Qualcomm will "share information" (and patents) about its CDMA and W-CDMA chipsets with Microsoft in order to support the rapid development of a Windows Mobile smartphone bases on these designs, with the first chipsets shipping in the second half of the year. The work will be centered on the Qualcomm Convergence Platform MSM 7xxx architecture.

This gives Microsoft a new chip partner for the Windows Mobile operating system and for its own smartphone architecture, which currently owes almost all its limited success to ODMS – notably Taiwan's HTC – making PDA/cellphone hybrids based on Intel silicon (Texas Instruments does support Windows Mobile but this combination has not been actively promoted).

The Qualcomm alliance means Microsoft could target the CDMA sector, and also produce a 3G Windows smartphone for WCDMA. Also likely to be attractive for Windows Mobile, whose stronghold is the traditional territory of the enterprise PDA, is Qualcomm’s advanced work on integrated chipsets supporting 3G and Wi-Fi.

Most tier one handset makers are suspicious of Microsoft, having seen its heavy handed treatment of its hardware partners in the PC world, and so the software giant is heavily reliant on white label handset manufacturers, such as HTC, and on creating designs that appeal directly to the operators.

In many ways, Qualcomm has the same approach in CDMA, regularly overcoming OEM wariness by winning operator support directly, because it understands what those carriers need to deliver to their consumers (the recent adoption by new customer O2 of its uiOne software platform is a prime example).

The creation of an end-to-end reference design that ticks plenty of operator boxes – familiar interface for the enterprise space, strong multimedia capabilities and so on – and provides quick time to market for handset ODMs, would strengthen both parties. Could it even, down the line, provide the basis for the much discussed entry of Microsoft into the hardware device market to take on Apple with its own branded mobile media products (a move given credence last month by an interview with CEO Steve Ballmer in German newspaper Die Welt)?

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