with Qualcomm CEO Paul Jacobs
During its Smart Services Leadership conference in San Diego this week, Qualcomm announced that it was forming a joint venture with Verizon Wireless to deliver machine-to-machine wireless services in a range of market segments, including health care, manufacturing, utilities, distribution and consumer products. FierceWireless Editor in Chief Sue Marek was in San Diego and sat down with Qualcomm CEO Paul Jacobs to talk about the new venture, the company's smartbook campaign and his view of Ericsson's latest entry into the CDMA world via its $1.13 billion bid to purchase Nortel's wireless assets.
FierceWireless: When Verizon and Qualcomm described this new M2M venture, I immediately thought of the relationship Qualcomm has with Verizon for the BREW platform. Qualcomm took a very fragmented and complicated ecosystem for mobile content and streamlined it and made it easier for the carrier. Obviously with BREW, the relationship with Verizon was not a joint venture, but it is still a very close partnership. Do you think my analogy is correct?
Jacobs: There is an analogy in a certain way. It's similar. With BREW we made it easy to get software apps on devices. But this JV is about both hardware and software on the carrier network. There are all these third parties that need connectivity. In the past, it was really hard to get on the network. For one reason or another, certification or engaging with the operator has been difficult. With our history with OmniTRACS, we understand this vertical very well.
FierceWireless: Why is it necessary for you to spin off this venture? Why can't Verizon just be a customer?
Jacobs: It's turning into an operator business. These are things on the network and they involve huge amounts of data. They have to have the right rate plan associated with it. How can you make this market happen? It's much better to have an operator [in order] to have the end-to-end aspect of it.
Some operators have already made the decision about how to do these things. This shift is happening already. On a much smaller level, it's similar to our handset business. We weren't a device manufacturer, we are about enabling technologies. We like to start something and then see the market develop.
FierceWireless: But this division currently does business with other operators, competitors to Verizon. For example, Qualcomm's smart services division helped enable the Amazon Kindle to work on Sprint's network. Won't they leave if Verizon is now part of this venture?
Jacobs: Other operators have their way of doing things. AT&T announced its partnership with Jasper Wireless a few months ago. Sprint with it's partnership with Amazon doesn't need to go through us anymore.
FierceWireless: What happened to the MVNO LifeComm that Qualcomm started four years ago?
Jacobs: After working for a few years to get the venture capital lined up, we were hit with the economic downturn. In the meantime, operators have done these open initiatives. Lifecomm as an MVNO became irrelevant. Events overtook it. Now we have things like the West Wireless Health Institute that is more along our lines. We are enabling things to be end to end.
We still think this is a growth opportunity. We think wireless will be embedded in everything. I believe that vision, and the user interface will be accessible over the phone. The phone will act as a centralized server. ... Now the focus is on app-specific wireless technologies that will be integrated to the phone.
FierceWireless: What do you think of Ericsson getting back into the CDMA business?
Jacobs: I think it's really interesting that CDMA continues to grow. As 2G shipments are going down, 3G shipments are going up. We know people want data and they need it low-cost. All technologies have pluses and minuses and companies need the right one for the right opportunity.
FierceWireless: Why should I buy a smartbook? How is this concept different from a netbook?
Jacobs: When you see a smartbook, you will like it. For one thing, the smartbook has the processor of a smart phone. When you see the Web browser, it will render fast. It's very different than a netbook. It will have the microprocessor and peripherals, and the Snapdragon chip. The netbook is based on the Intel Atom. But this will have a Gobi module. It will run open source operating systems.