Wireless Utopia

Some juicy bits from a very detailed analysis of the legal battles Qualcomm is facing right now.

As per the author, Nokia is worried about the royalty part. As the shipments of WCDMA handsets increase, it is seeing more and more revenues flowing from its coffers into QC's. Hypothetically if WCDMA handsets are the only handsets in the world, then effectively QC would own 5% of Nokia. That is unnerving for Nokia. TI has the same problem. Ericsson on the other hand wants a competitive edge over Huawei and does not want QC to license its technologies to them. All of these have ganged up right now and they are using the EU to press their case.

The WiMAX factor is a bit more interesting. It seems that QC is readying its legions of lawyers for litigation against WiMAX players right now which is inflating the bills. There is no doubt that QC will use these patents to kill WiMAX, after its Flash OFDM offering was piped to the post by WiMAX. The deal in question is the Sprint Nextel deal and the author goes to point out that Sprint is in a bad management shape right now after the merger. Nevertheless, the point the author missed out was that they had to differentiate themselves from the Verizon somehow. And it was either WiMAX or Flash OFDM. They choose WiMAX. Even though QC had decades of relationship with Sprint!

Another interesting take is on the QC partnership with the Operators. The Operators and the handset makers have been at logger heads for sometime now. The Operators want control over the handsets, preferably their own branded ones. The consumers want more services on it and the handset manufacturer's have to satisfy them. The classic case was the introduction of WiFi radio in mobile phones. It gives the consumers an option to bypass the operators network and obviously operators are not happy about that. Everybody is worried what happens when Skype goes into wireless devices and people start using that free service.

In comes QC. They are trying to fundamentally change the value chain and cut out the handset majors from it completely. It would just have the the chip providers, the manufacturer, the software provider and the operators. A win win situation for both QC and the Operators. The operators keep control on the platform and QC gets royalties from the ODM's. That in turn gets passed into the unit cost, which is again subsidized by the Operator. So everyone is happy, except the consumers. They dont get what they want. Funny!

In the end, the article predicts, the best brains will prevail. And QC, beyond doubt, has the best brains in the wireless technology business. That is true.

This month's Mobile Monday event has been announced. Mobile TV is a very hot topic these days with lot of hype and hopes surrounding it. One of the most read posts on this blog are the one's on Mobile TV incidentally (thanks to Google!). Since we have someone from the operator to speak this time, it will be very interesting to know their viewpoint.

I am definitely looking forward to it. Hope to see you there as well.

A nice example of how innovative thinking can bring about new ideas!

Its been some time since the X Series was announced. The X Series is a flat rate subscriber plan which bundles mobile broadband with popular applications such as Sling Media, iSkoot (an interoperable VoIP Client) and Orb. Since then there has been a growing interest in it with several influential bloggers pointing out the implications. BW has now picked up the thread and is carrying a detailed analysis of it.

So why this much interest? Its the old battle of open gardens of the internet against the walled gardens approach of the Telcos. So are the Telco's really opening up? Some breakaway carriers are. They are right now bit players in terms of subscriber base and they hope to increase it by providing the same services which the bigger players refuse to. It was predicted before. T Mobile embraced UMA for the same reason. Now the focus really is how effective these plans are. Can they dent the numbers of the Verizon's and Vodafone's?

If they do succeed, which is a big if, true disruption will happen. The best answer to this if is the question of data service. Data service is and will always be an add on feature for the mobile phone. Its the voice service which matters the most. Mobile phones are primarily used for voice and voice revenue, although on the decline, are still the major chunk of operators pie. And the Internet VoIP Services, the Skype's and GTalk can never better the quality of the plain old circuit switched voice calls. For the simple reason that its an unmanaged network. There is no guarantee of QoS there. Which means that an important call might drop anytime! You cannot rely on the service nor claim any support for it.

The Telco. killing VoIP service is still not there. Skype has come closest to it. But it needs to be improved upon if you want to really kill the Telcos. The X Series will have an impact on the final outcome though. Its testing the waters.

Update: Its a mutiny rather than a revolution, says Om.

This is going to be a nice test of the crowdsourcing phenomenon in India. There is a site called PutVote. Its a Digg clone. And its for Indians (there are several of them!) . Thanks to Ravages, one of my posts is up there. The Digg effect is legendary and has even a mirror site dedicated to its victims. Watch out for results out here.

PS: Dont forget to Vote!

Update: Its a trickle, rather than a deluge. Disappointing.

Looks like EVDO is winning the 3G battle in US hands down. The major CDMA carriers, Verizon and Sprint Nextel have publicly announced roll outs of EVDO Rev A and Rev B and C are on the horizon as well. Rev B's major feature is Mulitcarrier support and Rev C is about OFDM on the wireless link. With all this traction, EVDO is firmly entrenched technology in the US.

On the other hand UMTS deployments have lagged behind and it will be some time before they can even match or compete with EVDO. HSUPA provides QoS and uplink rates similar to EVDO Rev A and are technologically quite similar as well. Cingular has plans to roll it out and but for it to become mainstream it will take at least two to three years.

All this bodes well for Qualcomm. It is a major player in both these technologies. EVDO is completely QC's and it has been actively contributing to HSPA technologies as well (which explains the similarities). Globally EVDO might be destined to be a niche player but it seems to be the testing ground for cutting edge wireless access technologies.

So, good news for QC after a long time. They did get beaten in the WiMAX game, but to their credit, they are still hanging in there.

If you are looking at the Mobile VAS space aggressively, here's some food for thought. The Operator's in India are not really hungry for Mobile VAS right now. They are more focussed in trying to expand their customer base and Mobile VAS is secondary right now. This point had come up fleetingly once during one of our MoMo events. Kiran makes better case out of it.

Couple this with 80-20 factor: 80 % of revenue for the operators, 20 % for the content providers. If you think you are a better bargainer, think again. With the Operator's mind elsewhere, they would just walk away from the table. The result, you have to settle for less. There are also a host of technical challenges to overcome as well related to the incompatible mobile platforms. Its almost impossible to build a cross platform mobile application today.

But if you are doing the rounds of the TiE CON's, you would know that its Mobile all the way. The VC and Entrepreneur community both are agree on one thing: the Mobile is the platform of the future and in India presents lots of opportunities. There have been some high profile investments in that segments as well: OnMobile, PayMate, JiGrahak, July Systems etc. Did the VC's get it wrong then?

The answer depends upon what you think is the gestation period for a VAS startup. In few years the user base growth will hit a plateau and the focus of the Operators will shift. The ARPU will become a major headache and Operators will be in a more listening mood. So if you time your startup to be at the right place at the right time, you are a game.

As they say, timing is everything!

The Barcamp Bangalore is back. I have vivid memories of the last one. It happened a day after I officially became jobless and it was a part of my first baby steps in the world of entrepreneurship. And I had a fun time there. Met a lot of people and made some good friends. This time it promises to be even a bigger affair. Its a two day affair and they have some cool topics lined up as well. I am especially looking forward to Sujai's talk on WiMAX. He gave a great presentation on the same topic in Mobile Monday event once.

I am putting up my talk as well. If you are interested in Open Source and hate how the mobile phone is a completely a closed architecture, be there.

Riya got a makeover this week. Riya is supposed to be one of the high profile Web 2.0 startups and the last Barcamp Bangalore I met a few of them. Since then I lost touch and this news came as a complete surprise. But thanks to the CEO, Munjal Shah's detailed first person account at his blog not much was missed. Its a fascinating account, a must read for anyone with an entrepreneurial bent of mind. You almost feel the tension and the adrenalin rush leading up to the launch.

This is the stuff dreams are made of. All the best to them.

The South Asian Hardware Houses are a big a factor in the hardware business. Anybody doing something related to hardware has to answer the question: how do you stop BenQ or Flextronics to launch a clone of your product and take the market away from you. So much so that the mobile phone handset majors have been restricted to only a marketing organization leaving the development and manufacturing to the ODM's. The answer it seems lies in branding, as Apple has shown with the iPod. But for smaller companies the going is much tougher. Take Trolltech for example.

It's much touted GreenPhone has a new competitor: the OpenMoKo. Its an mobile phone running on Linux with a TI baseband, Samsung ARM9 host processor, 128 MB of memory and 64 MB of Flash. It also has a AGPS support, Matchbox Window Manager and an "apt-get" like update manager. Except for the baseband and the AGPS, all other parts are open: ie. the source code is available. It is not mentioned whether the phone can be reflashed, but if they are calling it the Hackable phone, the assumption is that it would be. The Inquirer has a detailed piece on it and looks at the business case as well.

The price tag is currently at $350 which is around half as cheap as Trolltech's Greenphone. The Open Mobile Phone business is a completely new market. There are no incumbents there. And it remains to be seen if open source can make any significant impact in this market. Its the branding power that the South Asian Manufacturer's lack. And, maybe, in this business brand might not matter.

A smart move I would say.

Stumbled upon the Yahoo Time Capsule today. Its an intriguing experiment. And a very nicely designed site as well. Perfect implementation of the Web 2.0 spirit of user generated content. Every body wants to want to leave their mark, embellish their name in the history books. Only few make it though. For lesser souls like us, Yahoo Time Capsule comes to our rescue. We can now imprint our footsteps in the annals of mankind's history. Maybe someone someday, long after we have gone will actually go through it and see us. It would be a perfect snapshot of our times!

Its something like throwing bottles with messages into the ocean. Only time and place has changed. Go ahead and indulge yourself.

The Bridge Loans (or Convertible Notes as they are called in financial terms) are going mainstream. Charles River Ventures, one of the oldest VC firms in the valley has started a new program called CRV QuickStart. Under this program they will provide money upto $250 K for early stage startups looking for angel money. The amount will be provided at a 6% rate of interest and 25 % discount converted once the company reaches the Series A round. In return CRV will hold the right to be participate in Series A and contribute at least 50 % to it. If Series A does not happen then CRV loses the money and the company is not liable. For more information on how convertible notes work, go here. Here is a brief FAQ on the program.

Since the launch on Wednesday (on TechCrunch!), it has kicked up a minor storm in the VC circles. The who's who of the VC world have commented on it. Generally it has been welcomed as a good idea and CRV has been appreciated for accepting the ground realities. O'Reilly Radar has a good post of the real challenges VC's businesses are up against. And by the looks of it, they have attracted significant interest. Several other VC firms are also thinking about similar programs. Depending upon its success, it might one day become the norm for all VC firms.

IMHO this model can work work wonders in India. High Tech startups in India face several challenges: lack of mature ecosystem, very little angel money and knowledge, dearth of talent with track record and not many good incubators around. Finding ways around these generally saps the energies of the founders. A scheme such as this would enable them concentrate on the work. Several Tier A VC firms in the process of establishing their presence in India right now. Hopefully someone will think about it.

Otherwise we will just have to wait till CRV comes to India.

Update: Seems that startups in India are also eligible. Waiting for a confirmation.

Update 2: Negative. :(