Nokia Vs Qualcomm Patent Lawsuit

Qualcomm Vs Nokia fight for royalties is watched or analyzed very carefully in the industry. What are the key issues ?

The basic fight is about WCDMA royalties. Ericsson resolved it with Qualcomm in 1999. So, Ericsson does not have to pay much of it to Qualcomm. The next big player in WCDMA is Nokia.

Nokia has actively contributed to WCDMA standard. Nokia has a large portfolio of patents on WCDMA. So, why should Nokia pay royalties to Qualcomm for WCDMA ? Why does Nokia create fuzz now on royalties ? What has changed recently for Nokia to think differently ?

Here are my 2 cents on these important questions:

• Qualcomm started working on CDMA technology around 1987. They solved some fundamental open problems to make it commercially viable (such as soft handoff). This is fundamental to CDMA regardless of flavor i.e. 1xRTT or WCDMA.
• WCDMA was, initially, designed to avoid Qualcomm patents as much as they can. However, fundamental CDMA patents could not be avoided.
• Now, these fundamental CDMA patents are coming out of ¨patent protection¨as its 15 years have expired.
• In view of above, the key question is : Does Qualcomm still has a compelling case to receive royalty payment on WCDMA, as key CDMA patents have expired ?

This could have significant impact on Qualcomm royalty income.

Evaluate Wireless Apps

There is a lot of buzz around wireless apps market. How do we evaluate wireless apps startup ? what are the critical success factors ?

entrepreneurs / VCs - please watch-out..

I guess the answer lies in SMS market success. Why is SMS so successfully ?

There are several key factors such as youth appeal for SMS. Frankly, I found it to be extremely difficult to use with phone digits being used for letters as well. However, if we consider potential revenue per SMS, it is higher then Voice. In other words, SMS generates higher "revenue/byte" for carrier in comparision to Voice.

In my opinion, the answer lies in "bang for a buck" analysis. Here is my perspective:

* Wireless "Voice" is highly optimized for wireless capacity. In 8-12 kbps, wireless operator makes significant revenue. This has set a very high bar for revenue expectation from mobile apps.

* Wireless operator has to pay a lot of money for freq. allocation (watch-out: AWS action is coming soon). This frequency allocation can carry a certain Mbps of traffic (on average), depending on choice of technology. So, operator has to maximize its revenue per Mbps/ kbps to make money. So, any mobile application has to be wireless-bandwidth efficient as well as generate revenue that is greater than or equal-to "voice" revenue. This is a tough challenge for most wireless apps to meet.

* Wireless apps needs to generate a network model, evaluate its bandwidth usage (with reasonable user experience) along with revenue expectations and compare it with Voice revenue.

Well.. This is tough for most mobile apps to meet. This is one reason for MMS being not successful in the market. The revenue expectations were simply too high. Is there any other solution to this problem ?

Hmm... I would say yes.

The solution is to build a network that does not cost as much as current 2G/3G networks do.

Wireless "voice" business is built on "high" network performance. Most wireless operators touts their "drop-calls" numbers as a measure of network quality to attract customers. Now, this is OK for "voice" business.

However, wireless-data is a very different beast. its puts higher pressure on network resources with lower revenue potential. So, what is a good strategy to win in wireless data business and create reasonable revenue expecting for wireless apps ?

The answer is cheaper network-cost to build wireless data network. This is where WiMAX or WiFi can help. By building cheaper wireless-data network and combining it with "higher quality voice" as convergence in mobile-phones as well as mobile-networks is a way to go for wireless-data success.