Qualcomm Talks Tough on Patents, 4G

The race to define and build next-generation broadband wireless networks is in full swing. And though Qualcomm Inc. doesn't like to use the 4G (fourth-generation) term, the company -- a key supplier of chip technology for today's 3G (third-generation) networks -- is already moving to stake its claim in the emerging market for super-fast wireless services.

If some companies had hoped to keep Qualcomm out of the picture by pushing OFDM (orthogonal frequency-division multiplexing) as the airlink technology of choice for 4G networks instead of CDMA (Code Division Multiple Access) -- in which the U.S. company has substantial intellectual property rights (IPR) -- they could be in for a surprise.

In an interview with IDG News Service, Bill Davidson, senior vice president of investor relations and international marketing at Qualcomm, said the company has more than 1,000 essential patents for OFDM, OFDMA (OFDM Access) and MIMO (Multiple Input Multiple Output) technologies, all of which form the foundation of new 4G technologies, whether WiMax, LTE (Long-Term Evolution) or UMB (Ultra Mobile Broadband). Qualcomm scooped up around 150 OFDM/OFDMA patents through its acquisition of Flarion Technologies Inc.

The following is an edited transcript.

IDGNS: Is OFDM a new area of development for Qualcomm?

Davidson: If you go back to the beginning of Qualcomm, OFDM was considered a path instead of CDMA. The company ended up going down the CDMA route because CDMA was better able to handle all the things you want to do on a wide-area wireless network. We believe that to this day.

IDGNS: Are you planning any more acquisitions of companies with OFDM technology?

Davidson: In the last couple of years, our acquisition activity has stepped up. Flarion was clearly the largest deal of the last few years.

IDGNS: Do intellectual property rights play a big role in your acquisition strategy?

Davidson: They can and, clearly in the case of Flarion, there was a double benefit. First and foremost, we got the only team -- to this day -- to deploy a working mobile OFDM system. We also got the intellectual property rights that came along with the business. Our acquisitions are focused on accelerating time to market on a build versus buy decision and augmenting engineering resources more than we're out trying to grab patents.

IDGNS: What's driving all the interest in OFDM?

Davidson: We're seeing interest in OFDM because spectrum is becoming available in the 10MHz blocks and wider. From an efficiency standpoint, there's not really a benefit for OFDM over CDMA. But when you get into wider tranches of spectrum, it can be a little less complex to implement.

IDGNS: But isn't 4G -- in which OFDM will play a big role -- all about newer, faster services?

Davidson: I think OFDM is really just a spectrum play. And, frankly, we don't subscribe to the 4G term. The applications that I've heard discussed aren't a whole lot different from what is being enabled over 3G today.

IDGNS: Isn't 4G supposed to be a lot faster than 3G?

Davidson: Many are talking about data rates that we don't even get on landline systems today. Yes, you can enable HDTV over these enormously wide pieces of spectrum. But what is the practical cost to the end-user?

IDGNS: So do we really need 4G?

Davidson: There is an existing roadmap within existing 3G technologies that provide the very same and, in most cases, better performance than some of the new technologies being proposed by other groups.

IDGNS: So WiMax and LTE aren't necessary?

Davidson: I look at LTE and UMB as being comparable; WiMax is not comparable to those technologies in terms of performance. There is a mistake in the premise that whatever comes along -- what people are calling 4G -- will be something that supplants the existing networks. We've been saying for several years that it will be about multiple airlinks existing in the market and making them work effectively together.

IDGNS: Let me come back to WiMax: Why isn't it comparable to LTE?

Davidson: Because it's original legacy is borne out of the fixed environment, there are immediate engineering trade-offs and performance issues that you come up against. There is this concept of link budget, or how effective a technology is over the airlink. WiMax suffers from poor spectral efficiency because of its heritage as not being a mobile standard.

IDGNS: Do you see any IPR issues with 4G?

Davidson: We believe that our OFDM, OFDMA and MIMO portfolio is among the strongest out there and clearly believe that it's applicable to any OFDM/OFDMA systems. Unfortunately, those who are supporting WiMax are trying to make it sound that the IP picture with this technology is very clear and that it's going to be simple. The IP picture in 3G is much clearer today than what exists in WiMax. The number of companies claiming IP that can be contributed to WiMax is enormous.

IDGNS: Will Qualcomm be active in WiMax in any way?

Davidson: As we said several years back when many were trying to say that Wi-Fi would come and kill 3G, to the extent that our customers want the integration of Wi-Fi into our chipsets, we'll accommodate that. We've said the same about WiMax. We're being pragmatic and view that it will be in the market.

IDGNS: Nokia CEO Olli-Pekka Kallasvuo said at the company's recent shareholders' meeting that the Finnish manufacturer can't give one company, Qualcomm, a chance to dictate rules for the whole industry. He said the issue is not Qualcomm versus Nokia but rather it's more about Qualcomm versus the rest of the industry. And your opinion?

Davidson: It's amusing to me that Nokia seems to think it's holding up the banner for the entire industry. If not for Qualcomm, there would be far fewer handset manufacturers for them to deal with as competitors and potential competitors. Our business model gives consumers a lot more choice so that Nokia can't dictate pricing into the market. Because we hold IP, Nokia wants to paint us controlling the industry. We enable a lot of competition that causes them a lot of concern -- hence why we're being attacked by them.

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