Friday, January 9, 2009

Qualcomm's progress on 3G and 4G notebooks

In conjunction with this week’s Consumer Electronics Show in Las Vegas, Forbes has a long article on Qualcomm’s design wins for its Gobi chipset.
In 2007, it made an entrance with Gobi, a module that contains a Qualcomm chipset, global positioning system functionality and a modem that supports a wide range of third generation, or 3G, cellular networks.

That last point is Gobi's selling point. Its flexible modem enables users to connect to the Web anytime, anywhere, regardless of carrier technology. That's helpful in a world that toggles between two different cellular standards: GSM (Global System for Mobile communications) and CDMA (Code Division Multiple Access). It simplifies things for PC makers, too. "[Manufacturers] love it because it takes complexity out of the equation," says Dan Shey, a principal analyst at ABI Research. "Before, they had to stock a different computer model for each carrier."
In all, Forbes says five companies — Acer, Dell, HP, Lenovo and Panasonic — plan on releasing notebook computers using Gobi chipsets to provide 3G connectivity for mobile broadband users.

Since the Forbes article, two other companies announced new Gobi-enabled computers at CES: the $1000 OQO Model 2+ and Sony with its $900 P-series. Both are netbook-sized machines being sold at twice the price, and thus the vendors seem to be using Gobi as a way to sell a premium-priced computer.

The Gobi chipsets leverage Qualcomm’s strong relationships with carriers, enabling notebook makers to win certification of their 3G-enabled laptops based on a cellular carrier’s prior certification of Qualcomm’s technology.

Forbes warns, however, that dual-mode 3G may just be a small niche for global business travelers and not a consumer market. It also notes that Qualcomm’s 3G advantage — of being able to equally be able to support W-CDMA and cdma2000 (which it calls GSM and CDMA) goes away when we get to 4G when there’s only the GSM-inspired LTE. Qualcomm promises to upgrade Gobi for LTE.

(At one point it looked like WiMax might challenge LTE but now it’s clear that it won’t. That works out well for Qualcomm, which bet heavily against WiMax.)

When Qualcomm officially conceded two months ago that UMB is dead, I wondered what role Qualcomm will play in the future mobile industry, since for the first time since 1995 it doesn’t have a mobile phone standard of its own.

In 3G, Qualcomm has been aggressively exploiting the window of opportunity created by its 3G multimode expertise to create a premium-priced, differentiated product for notebook PCs. In the early days of 4G, Qualcomm will have a new opportunity to offer tri-mode chipsets — W-CDMA, cdma2000 and LTE.

However, in the long run, the 4G world will be one of a single standard with many entrants, including low-cost producers like Huawei. High competition for a standardized product equals commoditization, so Qualcomm will either have to compete at that level or find new ways to differentiate its products.

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