Broadcom gives Qualcomm a taste of its own medicine

The unending saga of Broadcom vs. Qualcomm took another twist when Broadcom offered to receive $6 for every handset sold with a Qualcomm chip that was found to infringe a patent for a battery- saving feature. Qualcomm summarily rejected the offer saying it would have to pay US$1.5 billion to US$2 billion over the three years remaining on the patent. Now, I’m no fan of Qualcomm (Although I have a lot of respect for QC) because Qualcomm extracts a huge bounty from its patent portfolio that covers a lot of 2G and 3G wireless technology. However, this time around Broadcom had the audacity ask for $6-per-phone, saying it amounted to around 2 percent to 2.5 percent of the price of a handset.

”a small fraction of the revenue generated for each such handset by the carriers”

This is where I disagree with Broadcom. At this rate, a cell phone would cost between US$240 and US$300. Baloney! A handset vendor can produce a low-cost GSM handset for as low as US$10, and I believe that 3G phones are around US$100.

What’s interesting are the barbs fired by each company in response:

” Broadcom is asking for a royalty rate for one patent greater than the rate we ask for our entire portfolio,” says Qualcomm spokesman Bill Davidson.

”The per-handset royalty we’re asking for is less than the royalty Qualcomm demanded from Broadcom ” during a lawsuit earlier this year over video-compression patents”, says Broadcom’s Bill Blanning.

This fight is bitter because the U.S. International Trade Commission on June 7th banned the import of future models of 3G handsets that infringes a Broadcom patent. This leaves handset vendors like Motorola, Samsung, and LG, and wireless operators like Sprint and Verizon out in the cold – so they are ganging up to put the ban on hold. Qualcomm is now seeking a presidential veto on the ban on importing anything with these chips.

I really hope that Qualcomm will have to pay a substantial amount to Broadcom for the patent infringement. Why? because this is exactly what Qualcomm does to others with its massive patent portfolio.

I hope QC and Broadcom can settle the dispute quickly without interrupting imports of future 3G handset models into the U.S. But mostly, I really hope that George Bush doesn’t get involved because he’ll mess this one up too (its also not important to national security or hugely beneficial to the public)! For Qualcomm, what goes around comes around!

Will Apple break the Walled Garden

Cellular operators decided to get on the Internet browsing bandwagon many years ago. When they first started, Wireless Internet browsing was behest with numerous problems. First, the data networking technologies were so slow. If that wasn’t bad enough, they helped develop a technology called WAP that made it even slower to browse content. Second, mobile phones had very small screens, so only a small amount of a page could be seen. On top of that, it was very difficult to scroll up and down. Third, and to make matters even worse, wireless carriers wanted to control what content can be seen by customers, so that wireless operators could extract revenue from both sides – customers and content providers.

Fast forward to today, June 29th of 2007. Some things have changed. Data networking technologies are much faster. Sprint, Verizon, Alltel and U.S. Cellular have networks with download speeds of 400-800 kbps, while AT&T and T-Mobile have somewhat slower networks. Nonetheless, these networks are much faster than when Web 1.0 went bust. Screen sizes for mobile devices, especially of smart phones, Blackberrys, and PDAs, have increased dramatically, although most mobile devices still have small screens. Carrier control of content, the “walled garden”, exists for most phones but smartphones and Blackberrys can access any website.

Some things still haven’t. Even though smartphones and Blackberrys can access any website, they still use a cHTML or other browser that is not fully compliant with the web. This means that loading a website is still slow and cumbersome. Despite the larger screens, scrolling up and down is still cumbersome. Overall, a seemingly mundane task as browsing the web is an adventure on mobile devices.

Enter the iPhone. Its web browser, a version of Apple’s Safari browser, can render any web page as good as any web browser. With a 3.5-inch screen, web pages will show much better than on pretty much any mobile device. With the multi-touch touch screen, users will be able to scroll up, down, and sideways with ease. The browser also has a capability to zoom in (magnify) and out of any area of the screen.

The iPhone clearly goes against the walled garden approach of many wireless carriers. In the U.S. Verizon Wireless and Sprint Nextel are big on this approach and uses Qualcomm’s BREW software to contain users within the walled garden. Don’t get me wrong, BREW has benefits too.

Now that the iPhone is looking more and more like a runaway success, it will become a catalyst for bigger screens, multi-touch displays, and open access to websites. With AT&T, the largest wireless carrier in the U.S., leading the way with the iPhone, others will have little choice to but to open-up their walled gardens.

Winners: AT&T

Losers: Verizon Wireless, Sprint Nextel, Qualcomm.

iPhones for less than $15! No Waiting in Line

Would you like to have an iPhone? But cannot shell out $499 or don’t want to stand in line? Bidwarslive.com is allowing people to get an iPhone without waiting in line and without the massive price tag. Bidwarslive.com is auctioning 4 Apple iPhones in July. But they don’t go to the highest bidder! The iPhone will go to the lowest “unique” bid – that is the bid that is lower than all others and is the only one to bid that amount. An iPhone will be auctioned off every week in July, with auctions ending on July 7th, July 14th, July 21st, and July 28th. The iPhone requires a two year contract with AT&T, the only U.S. network the iPhone will work on.

So far nothing on Bidwarslive.com has sold for more than US$15, and the owners say the iPhone will go for even less.

Members pay $15 a month for 25 bids a day (or $25/month for 50 bids/day). Those bids can be used on any one of the prizes on auction. Current items include a 20” wide screen LCD Monitor, Xbox 360, and a $1500 Vacation to anywhere you choose.

Plus, there’s a nice social entrepreneurship aspect – whatever the small price the winner pays will be given to a charity of your choosing. Winners choose between the Susan G. Komen Breast Cancer, Livestrong, American Red Cross, and the Boys and Girls Club of America.

So go ahead! make your bids for the iPhone or any other of the other stuff on Sale. If you win, you’ll be sure to get it cheap!

MojoBaby launches Mobile Content site

mymojobaby.jpgMobile content launch pad MojoBaby officially launched this week. MyMojoBaby.com or MojoBaby.com focuses on sharing content with friends and family; Users can post photos and text messages from their mobile phone, somewhat like the love child of twitter and flickr.

The nice thing about MojoBaby is a widget called Mojo Player that can be embedded into, say, your MySpace homepage or other blog.

Currently the cell phone component of the site only works with U.S. cellular providers Verizon, TMobile, Sprint and AT&T/Cingular. International carriers will be added soon. To upload mobile pictures and videos, the user must have a MMS service enabled with a cellular provider.

Looking at some of the pictures on the site, it’s hard to imagine they were taken from a mobile phone. Or am I way behind on mobile phone camera capabilities?

T-Mobile HotSpot@Home is a Winner for Many

T-Mobile Hotspot@HomeT-Mobile launched its HotSpot@Home across the U.S today, entering a new era in Fixed-Mobile convergence (Cellular-WiFi convergence). For an additional US$19.99 a month over any voice plan of at least a US$39.99, you can make unlimited calls on any of T-Mobile’s 7,000 WiFi hotspots or on your home WiFi network. HotSpot@Home is available only on two phones: Samsung SGH-t409 and Nokia 6086. T-Mobile sells them for US$49.99 (with contract).

These phones can seamlessly switch between the cellular network and WiFi network. Say you get a call on the way home. If cellular coverage is spotty in your home, the phone will automatically switch the call through the home WiFi network when you get home. HotSpot@Home uses a technology called Unlicensed Mobile Access (UMA), which allows the phone to connect to the cellular radio network through an IP access point (e.g. WiFi).

There have been reports of high battery drain on the Samsung SGH-t409 that was used in the limited trial launched last year. However, a reliable source who tried HotSpot@Home last year says that the battery drain is not very high and the new Samsung SGH-t409 has improved battery usage. Of course, expect to find higher battery drain than for a regular cell phone.

This should be a great offer for:

  1. Cord-cutters looking to discard the landline phone connection.
  2. Those with indoor cellular coverage problems.
  3. Those who make a lot of calls from home and want to be reached at a single number anytime, anywhere.

This will be a great offer for some customers, and for T-Mobile because they don’t have a landline partner in the U.S., yet has an extensive WiFi network. This will be a great offer for some customers, and for T-Mobile because of extensive WiFi network and lack of a landline partner. I predict that it will be big blow to Vonage and other Cable/DSL based VoIP providers.

iPhone plans are a winner for AT&T

 AT&T just announced the price plans for the iPhone. The monthly plans are as follows:

  1. $59.99 for 450 minutes of voice, 5000 night-and-weekend minutes, Unlimited EDGE
  2. $79.99 for 900 minutes of voice, unlimited night-and-weekend minutes, Unlimited EDGE
  3. $99.99 for 1350 minutes of voice, unlimited night-and-weekend minutes, Unlimited EDGE

Also, the iPhone is only offered with a two year contract and there is a one-time activation $36 fee. Every plan also includes visual voicemail and other stuff.

These price plans are pretty standard and very competitive with the rest of the industry.

So, why is this a clear winner for AT&T?

In the Wireless industry, the primary metric for evaluating how well a wireless operator does is ARPU (Average Revenue Per User). Churn is another factor, which I’m sure Sprint would be happy to talk about. AT&T’s ARPU in the latest quarter (4Q 2006) is $49.29. Most of this ARPU comes from voice plans, but data ARPU is growing fast (53% growth in 4Q 2006). Nonetheless, the number of subscribers with voice and data plans are relatively small.

Herein lies Cingular/AT&T’s strategy for iPhone. By offering the iPhone with both voice and data (one cannot get a voice only or data only plan for the iPhone), AT&T will get a nice bump in ARPU.

Clever! very clever!

Clearwire to go mobile….soon

Clearwire Logo
Clearwire, the upstart WiMAX provider, recently announced plans to expand from just a DSL/cable modem replacement service to offer a mobile service as well.

Going mobile is no surprise for WiMAX – it is the whole point in the IEEE 802.16e-2005 standard. Clearwire Chief Strategy Officer Scott Richardson laid out plans to migrate to a fully mobile service.

“People consider us an alternative to cable or DSL, but we will support mobile devices,” Richardson said. “We’re on our way, and we’re leading the mobile Internet charge.”

So far Clearwire has only offered a fixed wireless like service via a residential gateway modem that behaves much like a Cable/DSL modem. This is portable, but not mobile – you can move the Internet service and VoIP service within the coverage area, much like one could take the Vonage adaptor and hook it up to any cable/DSL connection, but you cannot use it while moving (lack of built-in power supply, form factor issues).

Clearwire expects to provide limited-mobility with broadband wireless data cards in the third or fourth quarter (e.g. PCI or PCI Express cards in a laptop or a mobile router). Laptops with embedded WiMAX chips are expected in 2008.

Clearwire expects the first mobile handsets and connected devices to follow shortly afterwards. WiMAX doesn’t make sense without mobility or limited mobility. This is where Clearwire has to attack. But, this is not going to be easy:

  1. 1st generation WiMAX handsets will not be cheap (no economies of scale initially).
  2. WiMAX handsets will have to have similar or better form factor, User Interface features in order to compete with cellular handsets.
  3. At a minimum, WiMAX handsets will have to have a full-featured web browser and voice (VoIP) functionality.
  4. Users are already familiar with the big brand cellular operators, while Clearwire is virtually unknown. Clearwire may have to outmarket cellular operators to gain any traction. Look for very high customer acquisition costs.

To become an industry leader, Clearwire will need good, cost-efficient mobile handsets and a triple-play or quad-play offering.

What could GrandCentral do for Google?

News is flying around the blogosphere and tech news sites, after TechCrunch broke the news that Google is in talks to acquire or has already acquired GrandCentral, the “one number for life for all your phones” telephony company.

The basic idea around GrandCentral is to give everyone one single number so that your business and personal associates don’t have to know all your numbers. Calls to the single number can be routed to a variety of phones, depending on rules set by the user. These rules can be set depending upon your relationship to the caller and the time of day. This concept is also called ‘one-number reachability”.

There are several strategic areas where GrandCentral fits within Google’s strategy.

  1. Connect to the Telephone Network: Google Talk doesn’t have connectivity to telephone numbers. In other words, Google Talk is a PC-to-PC calling application that only works with GTalk clients and other XMPP-based VoIP services. Enter GrandCentral, and voila! Google can terminate calls to telephone numbers.
  2. Collect User Information: Google knows your email address from Gmail or iGoogle, search habits from Web History, locations of interest from Google Maps, your locations from weather information… You get the picture – Google knows a lot about you. But Google doesn’t have a key ingredient to creating a full and complete profile about you; your phone numbers and who calls you. Incidentally, this is also one of the most private of all public information that people have. For example, I will almost-freely give away my email address (see my LinkedIn profile) but will almost never give my phone numbers unless I know the person well. With GrandCentral, Google has the opportunity to get all your numbers! Why does Google need this? so that one day Google can precisely target ads to you and customize search results not just to the context, but to your profile as well.
  3. Store voicemails and recorded calls forever: Getting a voicemail in your email inbox is easy stuff these days. GrandCentral allows you to record calls too. With GrandCentral, Google can store voicemail and recorded calls forever. Google may be able to transcribe these audio recordings and use it to serve customized ads and to enhance what Google knows about you.
  4. Call from a Web page: Google already has the store front, purchasing, payment, checkout available. All it needs is a way for customers to embed a call button on a web page and Google can take the fight to Skype and eBay.

PS. Although TechCrunch says “We are trying to nail down the acquisition price.”, the title of the post implies that Google is paying $50 million for GrandCentral. See http://www.techcrunch.com/2007/06/24/google-to-acquire-grand-central-for-50-million/.

Fring comes to Windows Mobile phones

FringFring has further expanded its mobile VoIP (mVoIP) community by adding Windows Mobile 5.0 and 6.0 series devices to its list of supported handsets. The software is going to work on around 300 Windows Mobile series 5.0 & 6.0 handsets and PDAs!

Fring is a VoIP-IM aggregation client, that allows fringsters to communicate for free with fring, Skype, Google Talk, MSN Messenger, hundreds of SIP providers, and even twitter. In addition to the 300 Windows Mobile phones and pocket PCs, Fring is currently available for 20+ Nokia/Symbian-based phones over 3G, GPRS or Wi-Fi. Fring is a free, downloadable mobile phone application. Fring also support calls to the PSTN via SkyOut and is enhanced with real-time presence.

While Fring is london-based (hence, the primary support for Nokia/Symbian based phones which is the primary phone type in Europe), adding Windows Mobile support will help Fring grow its user base in the US.

Mandriva Linux says no Patent deal with Microsoft

Mandriva, the company formerly known as Mandrakesoft, that publishes the Mandriva GNU/Linux operating system says on a posting on the company blog by CEO François Bancilhon that there will be no cross-licensing pact with Microsoft. Mandriva has offices in the U.S., France, and Brazil and sells in more than 140 countries through dedicated channels and through the the company online store.

Novell, Xandros and Linspire have so far signed patent related deals with Microsoft, particularly after Microsoft claimed that Linux and other Free and Open Source Software (FOSS) violate 235 Microsoft patents. With this announcement Mandriva becomes the 3rd major Linux company, after Ubuntu and Red Hat, to reject a cross-licensing deal with Microsoft. In terms of Microsoft’s agreements with Linux providers, now it’s 3-3.

One big reason Red Hat, Ubuntu, and now Mandriva, has rejected patent licensing with Microsoft is that Microsoft has never identified the patents; Without evidence of infringement, infringers (and even criminals) are ‘Innocent till Proven Guilty’. To Quote:

So it seems like a thinly veiled attempt to send a signal to the FOSS community to line up and drop their pants to Microsoft, or rather to find out the reaction from the open source community (including large enterprises that use both Microsoft and Linux computers).

Mandriva, on the other hand, has even better reasons not to strike a deal with the arch-enemy. Mandriva’s biggest market is in the Europe, and the European Patent Convention of 1973 doesn’t recognize software patents. It’s unlikely that Microsoft will risk a patent infringement claim in Europe.

Is Mandriva, standing up to Microsoft, or is this a good publicity ploy?