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Qualcomm grasps for gold while turning silver

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Qualcomm was showing off its technology portfolio last week, reminding the world that it exists and still innovating, even if it prefers 3G over 4.

The company is celebrating its 25th year in existence and trying to remind people that while it might not have the market presence of Intel, it is in the pockets of more people and intends to remain there.

Qualcomm suffers badly from Intel envy - the man on the street has heard of Intel thanks to the the desktop PC, not to mention huge amounts of advertising and a distinctive audio brand. But outside of the industry, and particularly in Europe, Qualcomm is practically unknown.

This isn't fair, given the company's ownership of the CDMA 2G standard (dominant in the US for a while, but hardly known elsewhere) and the BREW platform, which was providing locked down ecosystems and mobile application stores when the iPhone was nothing more than a glint in Apple's eye. CDMA got absorbed into the GSM 3G standard, W-CDMA, so it still provides Qualcomm with five per cent of the profit on every 3G handset sold, but Qualcomm has aspirations way beyond collecting revenue on old patents.

Qualcomm's Snapdragon processor, based on an ARM core, has gone dual-core and is already shipping to manufacturers at 1.2GHz, with 1.5GHz coming soon, which should keep Android running sweetly for a while. The company‘s Mirisol screen technology is breathtaking in demonstrations, even if they are the same demonstrations the company has been showing for a year. Mirisol works by capturing light of the wrong frequencies (and thus colours) in layers of varying sizes, creating a reflective screen with all the good features of e-ink (power consumption, sunlight viewing) and all the performance of TFT (bright colours, video playback).

It really looks as good as it sounds, though getting it to market is taking a while. We're told that 5.7-inch Mirisol screens are now in production, so we should see devices sporting the technology some time next year.

Getting back to wireless - still the core business - Qualcomm makes more money from 3G than it does from LTE (the more-popular 4G standard), so it's unsurprising to find the company squeezing all it can from the standard. LTE (4G) isn‘t more efficient, according to Qualcomm, it just uses a broader channel. That means it's going to be limited to urban environments where high speed is needed, while 3G (in the form of HSPA+) covers the rest of the world.

A nice vision, but not entirely accurate - LTE can indeed use a 20MHz-wide channel, as compared to 3G‘s 5MHz band, but LTE can equally well use a 1MHz-wide channel in the face of a congested network - it provides flexibility, not capacity. That makes it, in theory, the perfect technology in every environment from delivery of Twitter updates to base-station backhaul.

But not according to Qualcomm, which has been expounding the virtues of banding 3G connections together to get 42Mb/sec. (Anyone remember HSCSD? Thought not.) When pushed, Qualcomm admitted that its share of the profits drops to 3.2 per cent for an LTE handset.

Not that 3G is the only wireless technology Qualcomm has an interest in. Besides its LTE holdings it also owns the broadcasting standard MediaFLO. In the UK Qualcomm paid more than £8m for a chunk of radio spectrum in which network operators could resell the MediaFLO service. Unfortunately they didn't, and more than two years after the auction the spectrum still lies empty.

But that's nothing compared to what Qualcomm spent in India, just (as the company puts it) to "get a seat at the table". That means more than $1bn for spectrum licences covering Delhi, Mumbai, Haryana and Kerala for the sole purpose of ensuring the WiMAX doesn't get a foothold in India. Qualcomm won't be running any networks; it just wants to make sure that those who do run them are using technology Qualcomm has a hand in (that's TD-LTE, India's case).

Qualcomm has spent 25 years refining the process of spending big to make tiny amounts of money in very large quantities. Intel tried the same trick with WiMAX but Qualcomm hardly needed the Indian licences to ensure Intel's failure. Qualcomm might only make a small percentage on every handset sold, but it's prepared to spend a great deal of money increasing that proportion and ensuring things continue to go its way. ®

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