Nokia Rubs Salt in Old foe Qualcomms wounds

Qualcomm has lots of friends, but Nokia is not one of them. In fact, Nokia is almost an arch enemy; this club includes Texas Instruments (TI), who with Nokia, was trying to develop CDMA chips for Nokia phones (mostly), but this didn’t work out because Qualcomm apparently was charging too much to license its patents for TI. That was several years ago, and TI’s quietly gave up on developing CDMA chips.

Fast forward and there’s a new squabble between Nokia and Qualcomm. The licensing agreement that allows Nokia to use Qualcomm’s CDMA (Code Division Multiple Access) patents expired in April 2007, and the two are struggling to extend this agreement. Without licensing Qualcomm’s patents, Nokia cannot sell 3rd Generation (3G) phones or other handsets that use Qualcomm’s CDMA technology. Likewise, Qualcomm will also have to stop selling chips that rely on Nokia patents. So its in both parties interest to eventually work out an agreement. Apparently, Qualcomm CEO Paul Jacobs thinks a final deal with Nokia will take several years.

The biggest likely reason for the holdout is that Nokia wants to reduce the licensing fee it pays Qualcomm, especially since Nokia has inserted some of its intellectual property into 3G standards. While Nokia has a stronger hand than before, Qualcomm has the ultimate upper hand.

Now, Nokia is trying other means to tame the tiger called Qualcomm.

For one, Nokia and others have filed complaints with the European Commission late last year, charging Qualcomm with anti-competitive behavior, accusing Qualcomm of charging the same rate to license its patents for WCDMA as it does for CDMA2000 even though its contribution to WCDMA is much smaller.

Next, Nokia filed a complaint with the U.S. International Trade Commission alleging that Qualcomm’s products infringe on 5 Nokia patents that improve the performance and efficiency of cell phones, as well as enable lower manufacturing costs, smaller product size and increased battery life. Nokia is asking for a ban on Qualcomm chips in the United States. Interestingly, Qualcomm has filed its own patent-infringement charge against Nokia with the ITC, and the issue is scheduled to go to trial next month.

If Qualcomm gives into Nokia, Qualcomm’s other patent licensees such as Samsung Electronics and LG Electronics will likely push for cheaper licensing deals with Qualcomm !

In the least, this whole patent thing seems to be taking new twists and turns every month!

Qualcomm to settle 3G Patent Dispute with Broadcom?

Earlier this week, Qualcomm’s General Counsel Lou Lupin resigned in the face of mounting legal battles related to Intellectual Property in 3rd Generation Wireless systems. Rightfully so, because Qualcomm has had several setbacks in its patent disputes with Broadcom and Lou was responsible for directing these battles. Moreover, for a company like Qualcomm that has been so successful so far and collected so much royalty from patents, Broadcom has to be a big thorn on its ego (I contend that any company as successful as Qualcomm has sufficient corporate big-ego and arrogance)

First, Qualcomm lost its patent dispute to Broadcom (Qualcomm is appealing). On top of it, Broadcom had the nerve to ask for $6 for each handset sold with a Qualcomm chip (See Broadcom gives Qualcomm a taste of its own medicine for some background).

Second, the U.S. International Trade Commission on June 7th banned the import of future models of 3G handsets with Qualcomm chips that infringes a Broadcom patent. Qualcomm’s pursuit of a stay of the import ban hasn’t materialized so far.

Third, the Presidential veto that Qualcomm was seeking was rejected (see Sticking it to Qualcomm).

Fourth, Verizon Wireless, Qualcomm’s biggest partner in the U.S., does U-turn and pays Broadcom to import EV-DO mobile devices. As part of the deal, Verizon also will drop its part in the effort to overturn the ruling.

Fifth, a federal judge in San Diego last week excoriated Qualcomm for “gross litigation misconduct” in another dispute with Broadcom, saying Qualcomm waived rights to enforce two patents on compressing video signals because it deliberately concealed them from an industry standard-setting group.

Sixth, a judge last Friday tentatively doubled Broadcom’s $19.64 million damages awarded against Qualcomm in May for the patent infringement.

And now, seventh, the head-honcho of Qualcomm’s patent battles has resigned (No need to feel too bad, he made $2.5 million in stock options on Fed-20-20007 and another $1 million in march-06)

In addition, Qualcomm is also involved in another legal dispute with Nokia, the world’s biggest mobile phone maker.

All this bad news, and there’s probably more to come, makes it more likely that Qualcomm will come down from its high throne and settle with Broadcom. Of course, it’ll be billed as a mutual agreement in the best interest of society!

Ooma to Raise Prices

Ooma just announced that it is taking pre-sales orders for the ooma Hub™ and ooma Scout™ in advance of the company’s consumer release slated for September 2007. Pre-sales orders will have for first priority fulfillment next month when the company opens up the online store.

Pre-sale Ooma systems come at the introductory pricing of $399 for a ooma Hub™ and $39 per Ooma Scout™ device. However, buried within this announcement (thanks Mike P!) is the news that Ooma is planning to increase prices!!!!!! Here it is:

In 2008, when the introductory pricing period expires, the ooma Hub™ device will carry a suggested retail price of $599.

I’ve had some concerns about Ooma, as outlined in Wanna get Ooma, Be Careful!. I’ve also outlined a preliminary comparison of Ooma and Skype, concluding that Skype is a better alternative for most people.

$600 for a device for free domestic long distance!!!! One has to have a really long investment span to see how this becomes a better value proposition than something like Skype. Frankly, I don’t see many users flocking to this anymore!

Ooma is just getting ready for lift-off and somehow I feel that it’s quickly forgetting about the consumer and thinking only about its profits (or perhaps the VCs are trying to cash out quickly). Or better yet, maybe Ashton is trying to Punk’d the general public this time!

Amp’d customers keep getting screw’d

prexar_mobile_logo.JPG It was a sad fate for Amp’d.

On the other hand, the future for Prexar Mobile looks brighter than ever. Here’s why; Prexar Mobile, a small mobile virtual network operator managed by a nationwide CLEC, says it has signed a deal to acquire Amp’d Mobile’s customers. Prexar is hoping this move will help its nationwide expansion.

Amp’d Mobile customers have been notified of the option to switch via a series of 5 text messages. Prexar says that its customer service centers have already been “pounded” with customers calling and signing up. No surprise there because Prexar has only about 15,000 wireless customers, and it probably has very minimal customer service agents. Amp’d had about 200,000 customers, and with all of them without service and probably desperately looking for an alternate provider, it’s no wonder Prexar’s customer service is getting pounded. Amp’d Mobile customers better move fast.

Good thing is that customers will be able to keep their handsets, except those who have the “Hollywood” or E816 or from Motorola. Those customers have to buy a new phone. Since Amp’d was on Verizon Wireless, it would seem logical that Prexar is on a carriers that uses the same technology (CDMA2000), otherwise subscribers wouldn’t be able to use the same wireless device. According to Prexar’s Web site, the company “provides service on the same network as Amp’d” Since they don’t explicitly call out Verizon Wireless, it’s probably not (but they wouldn’t want to spook customers by saying its not). Prexar most likely is on Sprint, a MVNO friendly carrier, or perhaps on Alltel or U.S. Cellular.

Prexar goal is to help Amp’d Mobile customers retain voice and text only at first. Prexar doesn’t have the fancy schmanzy services that Amp’d had, but it says that is working on a longer-term plan to add a content delivery system. Amp’d Mobile’s vast content library is on the auction block, and I doubt Prexar will purchase those rights for a small number of subscribers.

Interestingly, Prexar’s calling plans are much higher than what Amp’d offered and are similar to what the majors offer. The main difference is a two-step billing process where it bills in advance for the base plan and for usage in arrears. Here’s Amp’d Price Plans:

ampd_price_plans.JPG

And here’s Prexar’s calling plans

prexar_price_plans.JPG

First these customers got Amp’d (and you thought that was a good thing), but now they are getting screw’d by Prexar’s price plans. At these price plans, why not join a major wireless operator such as Verizon Wireless or Sprint?

Why Skype is Better than Ooma


ooma_logo_lg.gif skype_logo.png

Ooma has a lot of buzz and hype around it, despite still being in private beta. But let’s look beyond the hype and compare Ooma with other telephony services. I’m specifically choosing Skype although there are other players to consider. This will give a good idea how Ooma stacks up against Skype and for who Ooma may make sense.

First, looking at features, both Skype and Ooma offer unlimited calls to telephone numbers in the U.S. and voicemail. In addition, Skype has a nice colorful user-interface where you can set your presence status and see your contacts’ (buddies) presence status. There’s also Instant Messaging (IM) capability, and the ability to call both telephone numbers and buddies, no matter where they are in the world. While Ooma charges for all international calls, Skype only charges for International calls to telephone numbers (calls to buddies anywhere are free). Skype also higher voice quality because it uses high-quality codecs (e.g. iLBC) that provides better than toll-quality (what you get with landline phones) that is even good for music. The good thing about Ooma is that you can just use a single telephone number to reach all the contacts (kinda sorta like GrandCentral). Whereas for Skype, there’s a buddy name and a telephone number.

Also, neither offers 911 service, so you still need a local service for 911. In addition, Ooma users your local telephone service. Of course, a broadband service (e.g. DSL, cable) is also required.

Next, Ooma has several concerns about it service, especially relating to privacy. It’s all on this page, and there’s no need to replicate it.

Last but not the least, lets look at price. Ooma costs a flat one-time fee $399. There’s talk about a monthly charge for premium services, but that’s in the future so let’s ignore that for now. On the other hand, a Skype-enabled cordless phone or a WiFi phone costs about $150 (the Netgear WiFi Phone is $120 after a mail-in-rebate). The SkypeOut service to call anyone in the U.S. and Canada is $29.95 per year. SkypeIn (so your buddies can dial a phone number to reach you) with Voicemail costs $60 per year. That’s $90 per year or a whopping $7.50 per month. The cost of a Skype system is even cheaper, considering that Ooma costs up front and Skype costs on an annual basis. Skype devices also come with some nice extras – the SMC WiFi Phone ($160) comes with a free FON WiFi Router and + 12 months of Skype Voicemail. You can use the WiFi router for other purposes as well and comes with a revenue-sharing opportunity.

The break-even price is about 3 years. In other words, Ooma is cheaper if you keep it for more than 3 years. Till then, Skype is the cheaper option. Overall, Skype is a better option for most people because their time-span for electronics is less than 3 years. Three years is a long time – people tend to break things, want to get new stuff, or wont have the receipts when equipment breaks down

Verizon Wireless Enables YouTube Video Uploads

verizonwirelss_logo.gifVerizon Wireless is now the first U.S. Wireless Service Provider (WSP) to enable YouTube Video. Now you can record videos on your mobile phone and upload the videos directly to YouTube using the shortcode YTUBE (98823) using MMS. This is a pretty easy to remember shortcode, but UTUBE would’ve been easier to remember (perhaps that was already assigned). In order to upload videos, subscribers need to first update their YouTube accounts with their wireless phone numbers at www.youtube.com/mobile.

For the most part, videos should be of good quality but wont be able to match the quality of a good video camera (of course!). How long a video you can record depends on the memory size of your mobile (which usually isn’t much) and the size of the memory card in your wireless device. Verizon Wireless currently has more than two dozen video messaging-capable phones.

Other than uploading videos, subscribers with V CAST-enabled phones can also access selected YouTube videos through the YouTube channel on V CAST. V CAST subscribers can also access Veoh videos through V CAST. V CAST costs $3.00 for 24-hour use or $15.00 monthly subscription (no airtime charges).

Just yesterday, I wrote about the rising number of mobile video subscriptions. Well, these events will only further increase mobile video subscriptions.

AT&T Video Calling service goes Nationwide

AT&T Video Share AT&T/Cingular started with a limited commercial rollout of the Video Share service in June 2007. Now, AT&T Video Share goes “nationwide” in nearly 160 Markets. While Europe has seen video calling services earlier (albeit with limited success), this is the first-ever service in the U.S. that enables mobile subscribers to share live video over their wireless phones while on a voice call.

This is still one-way live streaming-video feeds where one has to manually switch streaming direction (making it half-duplex video calling). There is still a laundry list of drawbacks with this service. I’m still skeptical that this service will catchup anytime soon.

Video Share works exclusively over the AT&T 3G wireless network. So the real good news here is that AT&T has expanded its 3G footprint, which was earlier limited to a few select cities. With 3G, users will get faster data download speeds using a technology called HSDPA. Another technology called HSUPA will increase upload speeds, but this will come much later.

Amp’d Mobile Shutting Down Today

Amp’d Mobile It’s been almost 2 months since Amp’d Mobile went bankrupt (Amp’d is a mobile virtual network operator (MVNO) that runs on the Verizon Wireless network). Since then, it has been slowly but surely limping into the deathbed. Amp’d Mobile has sent a text message to customers announcing it will shut down today (Tuesday, 24 July). I guess it’s a nicer way to stop service, rather than hang up on callers like Sunrocket did.

The final nail in the coffin was when Amp’d Mobile struggled to meet the terms under which it was to pay US$2.5 million to retain its connection with wholesale network partner Verizon Wireless. Verizon has lost patience with Amp’d, saying in a statement:

‘While it is not the court’s responsibility to second-guess the debtor’s business decisions, it is the court’s responsibility to protect creditors’ interests from the actions of inexperienced, incapable or foolhardy management.’

Apparently, it costs Verizon Wireless $370,000 a day to maintain service to Amp’d customers. Amp’d has been encouraging subscribers to port their services to another operator. I always thought that Amp’d was a cool concept, including having mobile money/mobile wallet/m-commerce services with Obopay, but one that never got off the ground.

I hope that Verizon Wireless will take back the 200,000 customers that Amp’d had (perhaps less because some customers would’ve left soon after the bankruptcy). Their phones and service will definitely work on the Verizon Wireless Network (with a new PRL).

Concerns about Ooma

ooma-top.jpg

I haven’t tried Ooma yet, but it sure feels like the greatest thing since sliced bread, given all the hype and buzz surrounding it. And it’s just started private beta. You can find some of the greatest reviews at GigaOm, Crunch, Engadget, Mossberg, – some of the writing are pretty clear indications that Ooma reached out to these folks to publicize the private beta launch. So I thought I’d do a quick analysis to see if there are any drawbacks.

In any case, here are some of my concerns:

  • Ooma routes calls via another Ooma box’s POTS telephone connection to terminate calls. This also means that you could hook up a recording device or an IP-PBX like Asterisk between Ooma and your phone jack on the wall and record conversations. You might not know the people in the conversation, but the receiver of the call is in your area code. The called number should be trackable, and then you could easily get the name and address associated with that number online.
  • If some else’s call is terminated through the telephone connection hooked to your Ooma box, the caller ID seen by the called party would be your number, even though you wouldn’t even know that a call is routed through your Ooma box.
  • If some else’s call is terminated through the telephone connection hooked to your Ooma box, your local calls (for many people most calls are local) will be routed via the Internet and then via someone else’s Ooma box. Despite having local phone service, you will now get lower quality service. Might as well not get rid of local service and get vonage.
  • If you are making a call that goes through someone’s Ooma box and that person dials 911, then your call will be automatically and immediately get disconnected. This has low probability of happening, but a valid concern nonetheless.

Ooma is still in private beta. By the time Ooma goes “public beta”, hopefully these concerns will have been alleviated!

Verizon Wireless does U-turn and pays Broadcom to import EV-DO mobile devices

The unending patent saga between Broadcom and Qualcomm takes yet another twist as Verizon Wireless has agreed to pay Broadcom $6 per handset, up to a maximum $40 million per quarter and a lifetime maximum of $200 million in order to be able to import EV-DO handsets into the USA.

Verizon Wireless had previously supported Qualcomm in seeking a reversal of the ban, arguing it would prevent the latest handsets from getting to U.S. consumers. Qualcomm is pursuing a stay of the import ban and if that doesn’t work, a Presidential veto. As part of the deal, Verizon also will drop this effort to overturn the ruling.

I did a quick back of the envelope calculation: at $6 per device, $40 million covers 6.6 million mobile phones. That’s 27 million mobile phones for the year. Verizon Wireless has about 60 million subscribers, and lets say that a typical subscriber changes phones every 2 years. Thus Verizon sells about 30 million mobile devices per year.

The move is a blow to Qualcomm, but it looks like a pretty even deal for both Verizon and Broadcom, with some upside protection for Verizon Wireless. The $200 million maximum should be covered in 5-6 quarters, long enough time for Qualcomm to develop a workaround.