BREW developer harnesses The Force

This morning’s breakthrough company is Eyespot, a two-year-old North County firm that has a different take on the YouTube model.

Last summer’s interview of CEO/co-founder Jim Kaskade by UT telecom reporter Kathryn Balint shows a classic “scratch an itch” startup:

Balint: How did Eyespot get started?

Kaskade: David Dudas and I both have families, and we both shoot video with a digital video camcorder. But we were both asking what do you do with the digital video after you've captured it? I hadn't done anything with it, to be honest. I didn't have the time to learn complex editing tools. This is the typical situation of a lot of consumers. So David and I said, “This is a pain point that needs to be addressed. We need to take advantage of the fact that the Internet is becoming the operating system and instead of having an application run on your desktop, you can have a hosted application running on the Internet.”

Eyespot has a two-pronged approach. The Eyespot.com website allows editing online, while Eyespot Mobile Share (announced a year ago at Qualcomm’s annual BREW developer conference) allows such editing to be done on BREW-based cell phones (i.e. Verizon and BREW operators in Japan and Korea).

Today’s big announcement is that Eyespot has been selected by Lucasfilm to provide the tools for Star Wars fan(atic)s to create their own clips based on the 6-part movie saga, whether short parodies or longer mini-movies. Lucasfilm is providing some 250 clips of up to one minute or less that visitors to StarWars.com can combine using the Eyespot web-based software, and then post to the website (linked from a dedicated blog). This is in celebration of the 30th anniversary of the original Star Wars — I still remember waiting outside a Westwood movie theater to see the first (4th) episode) back in 1977.

There are limits, as mentioned in the Wall Street Journal article (but not the press release):

The mash-up project will come with rules, however. While it won't stop anybody from assailing characters or casting them in unexpected lights, Eyespot has set up a program to make sure none of the doctored clips contain nudity, pornography, and the like. As a backup, a team of screeners based in Costa Rica will watch each video before it goes live.

Still, this marks a courageous effort by Lucasfilm to utilize the power of user innovation and confront head-on the threat of BitTorrent, YouTube etc. facing all of Hollywood. The commentary by MaryAnn Johanson shows how big a shift this is for Lucas:

George Lucas, creator of "Star Wars," has never hesitated to protect his intellectual property, which is why some call him “Lucas the Litigator.” …

This is smart, on Lucas's part. He’s trying to take control of the crazy, pop-culture-commenting creativity all the kids are into these days. I predict this will fail, wildly, from Lucas's perspective (though fans will love it). If I may paraphrase what Princess Leia told Grand Moff Tarkin: The more you tighten your grip, Lucas, the more mashups will slip through your fingers.

This sort of deal also helps Eyespot avoid the the GooTube copyright dilemma. It is only the latest deal by Eyespot with licensed content, including Paramount Pictures and the NBA.

Kaskade and co-founder/CTO Dudas seemed to have had both a great vision and executed right on building the key content partners. With both VC and blue-chip angels like Qualcomm CEO Paul Jacobs and Linspire (née Lindows) chairman Michael Robertson, it appears they’ve built a small team that (at least until recently) was working out of a home.

This is the second startup of Kaskade, who in 1998 founded Incep Technologies, a Mira Mesa-based firm that developed IP to improve semiconductor packaging and connections. The company won more than $10 million in VC funding before it was acquired in September 2004 by Molex, Inc., a Fortune 1000 component company.

Graphic credit: Original 1977 Star Wars poster from Starstore.com

Technorati Tags: BREW, movie industry, Web 2.0, YouTube

Day 45, Qualcomm held hostage!

Somehow the Nokia-Qualcomm standoff doesn’t seem to be getting the wall-to-wall press that other “crises” get from our modern media. I think this must reflect an intentional decision on the part of the two parties to keep it out of the press and stick to the business at hand, which is to see if there are terms to which both sides can agree.

Obviously Nokia wants to permanently reduce its royalty payments to Qualcomm — and perhaps pick up ammunition for its ongoing fight with InterDigital. And Qualcomm is most concerned with not setting a precedent that will lower payments by other parties and destroy its business model. I’m not sure what’s taking so long, but perhaps they’re negotiating patent-by-patent. (Not clear how many that is — 2½ years ago, they bragged about 1,266 issued patents but the chart is now woefully out of date).

Who’s held hostage? Nokia can’t legally ship its W-CDMA phones to the U.S. without Qualcomm patents, but OTOH Nokia’s attempt to break Qualcomm’s business model has certainly put it in peril.

Sony Ericsson, Nokia’s major ally, was quoted at a Reuters conference last week as saying the negotiation is a really big deal.

“My thinking is that it is going to have quite a big impact on the industry as a whole,” Sony Ericsson’s head Miles Flint said at the Reuters Global Technology, Media and Telecoms Summit in Paris on Wednesday [May 16].

“If it was just a row between those two I think they might have settled it earlier. It goes quite deep,” Flint said, but noted it was difficult to estimate the exact ways it would impact the sector.

Wow. That’s deep.

Despite the lull in public posturing, not all is sweetness and light. TelecomTV quotes some harsh remarks from Nokia’s CEO:

Nokia’s CEO, Olli-Pekka Kallasvuo, upped the ante yet again last week when, speaking at the annual general meeting of shareholders [May 3] in the Finnish mobile handset and telecoms equipment manufacturing company, he said that to do so would be tantamount to handing to Qualcomm “dictatorial reign over the entire wireless industry.”

Mr. Kallasvuo added, “Talks are ongoing, the situation is open, but I have to say agreement cannot be reached before both parties are in accord. It's completely clear that we cannot give one company, in this case Qualcomm, a chance to dictate rules for the whole industry. The issue is not Qualcomm versus Nokia, it's more about Qualcomm versus the rest of the industry.”

The comments seem newsworthy, so that no one else carried these remarks suggests that Nokia intended them only for domestic consumption.

Meanwhile, Qualcomm’s #2 cheerleader is sanguine. In a Fool-ish commentary, Dave Mock wrote Wednesday:

The only real threats to the continued stream of cash flowing in to fund these perks are lawsuits and antitrust complaints pushed by Nokia and Broadcom. Nokia, in particular, is attempting to break the royalty dynasty that Qualcomm has enjoyed for 15 years by refusing to license next-generation technologies on terms similar to its original patent license agreement. Nokia is hoping that it and other equipment manufacturers such as Ericsson and Texas Instruments will be largely relieved of paying royalties to Qualcomm going forward.

But with the $200 million that Qualcomm intends to spend on legal defense this year, the company is going to great lengths to ensure that it can keep giving back to shareholders.

I would think shareholders would be more pleased to hear that Qualcomm is not only spending money on lawyers, but also a €100 million for European venture investments to align small companies to its business — much as Intel Capital invests to grow its market and to keep startups loyal to it rather than rival AMD. $134 million might seem a lot to you or me, but it is only about 20% (or less) of the Qualcomm Ventures funding.

Its first investment, in French startup Streamezzo, seems intended to support its MediaFLO mobile TV service. Streamezzo makes content authoring tools for the Nokia-backed DVB-H, but presumably MediaFLO tools will now be forthcoming.

Technorati Tags: Nokia, patents, Qualcomm

, Qualcomm Ventures

First CDMA iPhone in 2012

USA Today reports that Apple has not only given AT&T a five-year exclusive for the iPhone, but it has promised not to develop a CDMA version of the phone for that entire period.

I believe that’s a big mistake for Apple, since they’re limiting themselves to the 27% of Americans who use AT&T (née Cingular) and excluding the 49.9% that use CDMA. (It’s not clear whether gray market European iPhones will be available for T-Mobile subscribers). This also reduces their bargaining power in Japan, and raises questions about their Korean entry strategy.

But the big impact is that Apple has guaranteed that for the next 5 years, Verizon and Sprint will promote whatever iPhone-killers are offered by LG, Samsung and Motorola. I haven’t looked at their mobile phone advertising budgets, but I’d guess that these two (with T-Mobile) will be outspending AT&T by 2:1 or more.

Technorati Tags: Apple, CDMA

Location-based services — next growth area?

Thursday I was fortunate to attend the opening meeting of the San Diego Telecom Council’s§ newest special interest group (SIG), that for location-based services (LBS).

To get everyone on the same page, the SIG organizers had a broad lineup of executives and entrepreneurs in the LBS space. Location awareness in cellphones stems from the FCC’s E911 mandate. Four speakers talked about how to shift the technology from a government-imposed cost to a business opportunity:

• Arnold Gum, a manager at Qualcomm, who talked about how the Qualcomm gpsOne assisted-GPS technology combines cell-tower based triangulation (good in cities) with GPS satellite-based location (good in rural areas). (Somehow he managed to do so without mentioning Qualcomm’s $1 billion purchase of SnapTrack in 2000). Verizon and Sprint thus have the best LBS potential because gpsOne has been embedded in all Qualcomm CDMA chips and thus all new CMDA phones sold in the US.
• Stephen Stuut, former CEO of local startup Broadband Innovations and now CEO of Pennsylvania-based TruePosition, which since 1999 has been a subsidiary of John Malone’s Liberty Media. TruePosition tries to solve the LBS problems of GSM carriers, first for the US but now for the much larger international market.
• James Adams, a co-founder of NeverLost Networks — created to find lost kids in amusement parks — which after they realied the tiny market sized morphed into AwarePoint, a company using RFID to track instruments and other equipment within hospitals. Adams recently founded Locomobi.
• Mark Wells, CEO and co-founder of DriveOK, which uses cell phone positioning to track 20,000 subscribers (mostly teenager drivers).

Between them, Gum and Adams identified the key drivers of location-based services:

• automation. Is the data location entered manually, reported to a human, or to another computer? (Wells was the first person I’ve heard use “M2M” as in machine-to-machine).
• range. Are you trying to find something anywhere on the planet or within a building? Adams seemed to convinced his audience that RFID (low cost, short range) LBS should be considered as an extension of cellular or GPS-based solutions.
• accuracy. Do you need to know the city, within 300m (a typical cell phone triangulation), or within a few feet? I can imagine localizing equipment in a hospital requires more accuracy than “find me the nearest movie theater.”
• timeliness. Do you need the data in realtime (where is our convicted sex offender) or only a few times a month or year (where is our Coke® machine)?
• cost. How much are you willing to pay? Per object? Per system/tracking network? Per transmission? Wells noted, for example, that the business models of cell carriers assume a $50 monthly revenue per mobile device, far too much for monthly tracking of capital equipment.

Stuut reminded the audience of the US-centrism of the privacy debate. Here, a subscriber’s location is not transmitted to the cell carrier unless you opt-in. (Something you will wish you had done if you have a car crash). However, this is a US requirement. Stuut noted that for interior ministers of some countries, having the carrier spy on customers is considered a good thing, particularly in countries where remote-detonated bombs are common.

The new SIG has a strong lineup of officers/co-founders.

• Neeraj Bhavani is founder and CEO of Tagnos, which provides RFID integration software for healthcare.
• Steve Morley came to San Diego with Linkabit and left Qualcomm more than 25 years later.
• Magda Remillard did her own startup before joining the local operations of Novatel Wireless.
• The ubiquitous Marco Thompson, onetime SDTC president who now seems to start new SIGs in between investing in other people’s startups.

The slides may be posted soon, I’ll post a link when available.

§ Yes I know the SDTC made a failed attempt at brand extension and let their premium domain name lapse, but we’ll ignore that.

Technorati Tags: GPS, location based services, RFID, wireless