Known for its technology leadership, the company is looking beyond its roots.
Qualcomm and technology. They go together like wine and cheese. You might have one without the other, but it’s difficult to imagine them separately. Still, Len Lauer has a vision for the San Diego company that encompasses a wider universe than chips and air interfaces.
Lauer has been executive vice president and group president at Qualcomm just over a year, coming to San Diego after eight years at Sprint, most recently as COO. That time undoubtedly gave him a consumer and services focus, which he brought with him to Qualcomm.
“We’re seeing interest in
NFC in hot spots like transit
stations for ticketing.”
Len Lauer, executive
vice president and group
president for Qualcomm
And Lauer sees consumer services as one of the main pieces of Qualcomm’s business in the years ahead. In a recent interview, he said Qualcomm’s world will include content delivery using its BREW platform, mobile TV broadcasting with MediaFLO, chips, connectivity, mobile commerce and advertising. The last two especially are not services necessarily part of Qualcomm’s traditional portfolio, but that is changing rapidly.
Qualcomm’s mobile commerce future got a boost last fall when the company paid $210 million to buy Firethorn Holdings, an Atlanta-based mobile banking company that had cut deals with AT&T, Verizon Wireless and financial institutions that include Wachovia, SunTrust Bank, Regions Financial, BancorpSouth and Synovus.
Lauer thinks mobile banking has a bright future because millions of Americans already have online access to their banking accounts. Mobile access is a natural fit for targeted banking services like bill payment and checking balances, he thinks.
MOBILE COMMERCE BREAKS OUT
Down the road, Lauer sees mobile commerce evolving with the addition of mobile affinity card services, perhaps using a Starbucks gift card on the phone. Beyond that is mobile coupons, which some companies are doing already, and ultimately the use of near-field communications (NFC) for proximity or contactless payments.
Qualcomm’s nemesis, Nokia, has been a big advocate of NFC for payments, with trials in several cities in recent years. Also, Nokia and Motorola both made recent investments in Inside Contactless, a fabless semiconductor company that makes NFC chip platforms.
ABI Research has forecast that 419 million NFC chipsets will ship in 2012 as the market for contactless payments gradually accelerates.
Lauer says mobile commerce, including contactless payments, is a “large opportunity” for Qualcomm. But he thinks the market will evolve slowly because NFC has to find its way into mass-market phones and then into readers in locations such as transit stations and finally retail outlets.
“We’re seeing interest in NFC in hot spots like transit stations for ticketing,” he says.
What’s the most attractive about using the phone as a mobile wallet, he says, is that the consumer can use the services without paying for them. Banks like mobile banking because it cuts their customer service costs and also has a “sticky” element.
Mobile banking is a good place to start with m-commerce because it will increase consumer awareness of a phone’s capabilities and make the use of mobile affinity cards and coupons more intuitive.
NFC is not one of Qualcomm’s technology strengths now, but Lauer says he sees partnering with a company that has that expertise. He says Qualcomm has had several discussions with companies about partnering on trials.
It likely will be two or three years before contactless payments with phones reaches any kind of market penetration, Lauer says.
Although he declined to release any numbers, Lauer also said MediaFLO take-up with Verizon Wireless has been good, and he’s looking forward to AT&T’s launch of the broadcast TV service. He would like to see more live sports content offered, especially NFL and major league baseball, but that is something MediaFLO’s content partner ESPN is working on.
Despite the increasing focus on content and services, Lauer still thinks about technology. And on the air interface technology side, Lauer is not ready to give up on Ultra Mobile Broadband (UMB), which is Qualcomm’s hope for the 4G evolution of CDMA operators using OFDMA (orthogonal frequency division multiple access). Verizon Wireless recently opted to use the GSM world’s 4G technology, Long Term Evolution (LTE), leading some analysts to speculate that UMB will be relegated to niche status.
Lauer says it is too early to declare UMB dead, but says Qualcomm still has OFDMA intellectual property for LTE. Plus, he says, most networks will use CDMA or W-CDMA together with LTE for years to come, giving Qualcomm a continuing revenue stream.
At this year’s International Consumer Electronics Show, Qualcomm was demonstrating a couple of prototype devices that point to its content and services future, as well as bringing in its technology assets. The devices, code-named Anchorage and Fairbanks, are more like portable consumer electronics devices than mobile phones, with the ability to stream MediaFLO content, browse the Internet and port multimedia content to TV screens.
Both of the devices also had UMTS/HSPA radios so they could be used as phones and cellular data. Qualcomm expects similar devices made by companies such as Samsung or HTC might be available for sale by next Christmas. If so, they’ll be further evidence of Qualcomm’s expanding universe.
Filed Under: Infrastructure