Feeds

Qualcomm considers radical action as pressure mounts

Chipmaker feels the heat in face of likely EU probe

Secure remote control for conventional and virtual desktops

Analysis Pressure is mounting on Qualcomm on all fronts, with CEO Paul Jacobs hinting for the first time that he might consider breaking up the company.

Although he made it clear this would be a last resort, the usually sanguine chipmaker is clearly feeling the heat of intensified calls for probes of its business practises (with a full EU investigation looking likely); a fresh round of legal battles with Nokia; and a new setback – an unprecedented decision by the IEEE standards body to suspend the activities of one of its taskgroups, 802.20, alleging undue influence by Qualcomm.

A radical rethink of processes and structures, especially as regards intellectual property licensing, is clearly essential for Qualcomm to answer its critics, and avoid a Microsoft-style situation where it spends years taking a defiant stand through a series of investigations that are costly to both the coffers and the reputation.

Like Microsoft, Qualcomm stands accused of tying together two aspects of its business – in this case, patent licenses and chip sales, rather than operating systems and applications – to achieve a quasi-monopoly and make it impossible for other companies to compete on a level playing field.

Arguably, unlike Microsoft, Qualcomm – whatever the rights and wrongs of the debate over its current business practises – would certainly be a success story even if its different activities were separated. It is an effective chipmaker, as the announcement of yet another improved quarterly forecast last week demonstrated, and has genuine technological advances that companies want to license, sometimes in spite of their political instincts (O2 signing up for Qualcomm's user interface platform, for instance).

So break-up need not be disastrous, though it would certainly reduce Qualcomm's advantages over its rivals as it seeks to extend its power beyond its native CDMA sector and into the whole 3G plus market – including chips for W-CDMA and, in future, China's TD-SCDMA, plus chips and patents in OFDM technologies.

Jacobs told the media last weekend that if a break-up were necessary, "then that's what we're going to do. But we expect that we're going to be able to keep the company together".

Following complaints about Qualcomm's business practises made to the EC last October by Ericsson, Nokia, Texas Instruments, Broadcom, NEC and Panasonic, the parties are waiting to see whether the Commission decides to launch a formal probe. Jacobs admitted: "I guess I won't be surprised if there is an investigation."

Broadcom has also filed anti-trust suits and complaints in the US, claiming that Qualcomm ties its intellectual property licensing and chip contracts together unlawfully. The key complaint in Europe is that Qualcomm is not reasonably licensing its patents, charging the same rates on W-CDMA as on its own CDMA2000 even though its share of the intellectual property is far smaller.

Jacobs responds that the royalty rate is a low single-digit percentage, and the company makes a virtue of a single rate that covers all its platforms, including the emerging OFDM products.

The OFDM issues

These products and their associated patents – most importantly the Flash-OFDM broadband wireless network acquired with Flarion and the FLO mobile broadcasting system – are critical to Qualcomm's bid to retain a key role in next generation mobile communications, even as the 3G platforms, all underpinned by its core CDMA technology, gradually give way to a far more varied 4G picture, with OFDM the key foundation.

Qualcomm has set about drumming up industry support, and licensing revenue, for its OFDM architectures in anticipation of this shift. On the mobile TV side, the FLO Forum is growing (see inset) and the chipmaker has taken a lead in multi-radio integrated chipsets that support not just MediaFLO but other likely standards (see separate item about Siano).

Secure remote control for conventional and virtual desktops

More from The Register

next story
Download alert: Nearly ALL top 100 Android, iOS paid apps hacked
Attack of the Clones? Yeah, but much, much scarier – report
Broadband sellers in the UK are UP TO no good, says Which?
Speedy network claims only apply to 10% of customers
Virgin Media struck dumb by NATIONWIDE packet loss balls-up
Turning it off and on again fixes glitch 12 HOURS LATER
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Fujitsu CTO: We'll be 3D-printing tech execs in 15 years
Fleshy techie disses network neutrality, helmet-less motorcyclists
Facebook, working on Facebook at Work, works on Facebook. At Work
You don't want your cat or drunk pics at the office
Soz, web devs: Google snatches its Wallet off the table
Killing off web service in 3 months... but app-happy bonkers are fine
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Choosing a cloud hosting partner with confidence
Download Choosing a Cloud Hosting Provider with Confidence to learn more about cloud computing - the new opportunities and new security challenges.