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

Targeting a converged world

However broad Microsoft’s portable device ambitions, it undoubtedly needs to strengthen its hand in mobile products beyond the traditional enterprise executive base, and to extend its progress in multimedia content on other platforms – PC-based media centres, IPTV and so on – to the wireless handhelds.

This is not just because, in numeric terms, these will represent the largest target market for its software within a few short years, but also because service providers will increasingly look to deliver the same content and interfaces across a variety of different networks and devices, from set-top boxes to smartphones, and will look to a unified software architecture across the board.

This is where Microsoft is vital to Qualcomm. On the surface, the initial deal between the companies looks like a PR boost for the chipmaker, but with more substantial significance for the software house. In the burgeoning world of convergence, though, all mobile-only specialists risk being consigned to a backwater when it comes to the plans of the large converged operators.

Mobile companies need to ensure their technologies are relevant to partners in the wireline and fixed worlds too, if they are to take part in plum contracts for end-to-end, multi-platform media systems – which will be the most attractive area of telecoms spending around the turn of the decade.

Nokia and Motorola have been busily expanding their activities in Wi-Fi, broadband and enterprise partnerships and other areas to, as Nokia puts it, turn the mobile handset into the key hub device for the whole converged experience. Mobile-only operators are looking to deliver fixed services or partner with wireline providers.

Among the chipmakers, Texas Instruments is highly advanced with a multimedia vision that spans the whole gamut of content platforms, and Intel, of course, is entering the mobile world with its feet already firmly on the other side of the fence.

Qualcomm, however, despite its dominance of the mobile 3G chipset world, has little influence on other media platforms. Microsoft brings it the option of a fully fledged operating system and content environment that could be unified with those of other, non-mobile devices to be part of a converged system.

Otherwise there is the risk that would-be quadruple play operators, and their integrators and vendors, will lose confidence in CDMA as part of a fixed/mobile system, since it will offer a mobile experience that is completely different to that on the fixed units. Or they will turn to phonemakers that are offering such a unified experience, but are not using Qualcomm chipsets – a wide range of choices in W-CDMA, and even in CDMA2000, there are devices from the Nokia/TI/Sanyo collaboration, a very black outcome for Qualcomm, which despite all its famous patents revenues, still has chip sales at the heart of its business.

And increasingly, the engineering excellence and execution effectiveness that do underpin its products are not enough. The chipmaker, as TI knows very well, has to offer a complete experience.

This, and the need for more sophisticated data and media functionality on phones, has brought PC-style operating systems and software architectures into the high end of the mobile world to replace the cut-down, proprietary OSs that run the bulk of cellphones. Symbian OS, Windows Mobile and mobile Linux are the main contenders in the GSM/GPRS and W-CDMA world, with Java J2ME and, just emerging, mobile Ajax the key unifying software environments.

In CDMA, though Java has gained ground as a software distribution platform, particularly since Qualcomm supported it in its own Brew software architecture, the classic OSs have been far less important, despite Nokia's launch of the first CDMA Symbian phone a year ago and some progress by Linux.

Microsoft may well see this as territory that is still open for grabs and where Windows will face less threat as the high level OS of choice. Nokia (now joined by Sanyo), the only major handset maker seeking to build a CDMA phone business without using Qualcomm chips, would naturally support Symbian and Java on its models, but its market share currently remains small.

For the other CDMA phonemakers, if Qualcomm does a good job of creating an optimized software environment for multimedia based on Windows, there would be little reason not to adopt it for high end models. This would give Qualcomm a high level software architecture at a stroke, and given Microsoft's need to make progress in this market, it would have greater influence over its partner – ironically, given the usual reasons to avoid working with the Redmond giant – than it could hope for in the fragmented world of mobile Linux or the Nokia-dominated Symbian platform.

All this would also serve to wrong foot the common enemy, Nokia. In the long term, the Finnish giant aims to usurp the position of the Microsoft- based laptop as the primary enterprise client, and it also seeks to reduce the power of Qualcomm in mobile networks, in order to reduce royalty payments on the CDMA giant's famous patents and cut the cost and therefore economic viability of 3G systems and beyond.