Qualcomm – Courting The Open Internet?

Implications: I admit there are times that Qualcomm just baffles me.  I thought I understood its media strategy.  I was and still am a big supporter of the MediaFLO. I am used to hearing about Qualcomm’s walled garden.  I am taken aback by even the appearance of openness from Qualcomm.

Analysis: Qualcomm’s move towards openness may actually be the real thing.  Let’s think about this for a moment.

Open networks help spur innovation.  Walled gardens can spur innovation but they are more about controlling and expanding one’s existing turf.  Qualcomm’s Brew platform has made the company a fortune.  Qualcomm’s Brew platform is tied at the hip with Verizon (and its new acquisition called Alltel) and all of the other CDMA players in town.

Verizon is moving towards long term evolution (LTE); away from Qualcomm’s Ultra Mobile Broadband (UMB) wireless technology.  Verizon has already proclaimed its intention of supporting openness.  In short, Qualcomm has to change.  However, I believe there is another reason why Qualcomm is courting openness.  It’s called MediaFLO.

Just a side note.  In regard to LTE, Qualcomm owns a pile of the core patents behind UMTS and GSM; it is not like they are going to lose money.

MediaFLO is Qualcomm’s answer to Verizon’s and AT&T’s bandwidth limitations for their respective wireless video and Internet businesses.  MediaFLO is designed to offload the video and media traffic of AT&T and Verizon.

Verizon, AT&T, and other carriers have acquired an enormous amount of spectrum in the recent 700 MHz auction.  Even Qualcomm acquired spectrum.  MediaFLO’s value to the carriers drops as the carriers acquire more and more spectrum.  I have said this in past analyses, I believe Qualcomm is going to head into content management in a big way and MediaFLO is their entre into the content business.

An open development environment enables Qualcomm to be more than a hawker of products but an enabler of content.  This approach allows Qualcomm to get closer and closer to those who own content and create content.  Qualcomm’s open approach will enable Qualcomm to become embedded not only with the carriers but also in the minds of the content developers and owners.  As for the naysayers claiming the content revenue model has not bee fully developed; read my past analyses, you are preaching to the choir.  Right now Qualcomm is in a wild horse race to get a few paces ahead of the pack of telecom media companies.

What Qualcomm has to do is get itself entwined in the content value chain.  Its current efforts are designed to do just that.  I wonder if Qualcomm is going to find a way to charge some type of fee?