Wireless war: Who's gonna win?

Summary:In the '80s, Microsoft and Intel established dominance in the PC market, but the standards winner in the larger wireless world could wind up with an even weightier prize. Who will be the 'Wintel' of wireless?

Everyone wants to rule the wireless kingdom.

Big-name technology makers, including Qualcomm, Motorola, Sun Microsystems (sunw), Nokia (nok), Microsoft (msft)--and even chip giant Intel--are looking to become to wireless devices what Windows is to the PC: a universal standard for software developers.

With projections of a multibillion-dollar future, many technology companies are vying to establish a de facto standard for wireless software, creating a new revenue source even if sales of cell phone handsets--the most commonly used wireless devices--slip.

In the 1980s, Microsoft and Intel established dominance in the personal computer market with the Windows operating system and Intel's line of processors. The winner in the wireless standards battle, analysts say, could wind up as the next "Wintel."

"There's a battleground out there. The stakes are big," said Samuel May, a wireless analyst with U.S. Bancorp Piper Jaffray. "The computer industry settled on one operating system. The cell phone (market) is bigger than the computer (market)."

Indeed, worldwide sales of cellular phones have dwarfed PC sales in recent years. But many analysts and company executives are now worried that handset sales are slowing, prompting research and development into entire software architectures suitable for cell phones or whatever new wireless devices come to the fore.

On Wednesday, Qualcomm (qcom) became the latest company to jump into the fray. The company announced a new wireless Internet and software development technology, called BREW (Binary Runtime Environment for Wireless), aimed at allowing developers to create software applications for any wireless phone. The ambitious plan has Qualcomm poised to generate new revenue from consumers who could download and install software onto their mobile phones, in much the same way customers do now with PCs and handheld computers such as Palm and Handspring's Visor.

Qualcomm's BREW is the most recent entry in what's become an alphabet soup of similar standards efforts aimed at dominating the fractured wireless industry.

At least three major wireless transmission technologies--GSM (Global System for Mobile communications), CDMA (Code Division Multiple Access), which Qualcomm developed and licenses, and TDMA (Time Division Multiple Access)--dominate the worldwide market. At the same time, dozens of carriers and handset makers require wireless software and mobile Internet developers to tweak their applications for different phones and carriers. Analysts say this is partly to blame for the slow adoption of wireless Internet services in the United States and their higher cost here than in other areas of the globe.

Qualcomm's software bid
Qualcomm plans to spin off its semiconductor unit and has spent the past two years exiting most of its manufacturing businesses. Tapping into the market for mobile phone software presents the company with a new source of revenue--and one that is resistant to slower handset sales.

"This area that Qualcomm is addressing is probably an area that's going to see huge activity," said Terry Nozick, a wireless industry analyst at Mobile Insights. "We're seeing lots of theories and ideas. But they're all over the place. It's the wireless industry doing what it always does by trying to create so many different standards."

"It's a smart move on their part. Software is a great business to be in because it's a high-margin business," said Ed Snyder, a wireless industry analyst at J.P. Morgan H&Q, an investment bank.

Qualcomm generates much of its revenue from the sale of its own CDMA chip and the royalties it collects from other chipmakers that license the CDMA technology. Now the company also will generate revenue from wireless carriers for licensing BREW.

(qcom) However, some wireless software developers are skeptical that Qualcomm's push will supersede similar efforts by Sun to get its Java technology into cellular phones.

Many analysts forecast cooler sales for the wireless market, prompting some companies, such as Qualcomm and Sun, to consider additional revenue streams from wireless software.

"Wireless is still growing fast, but some people think there are other ways to make money," said Ray Jodoin, a wireless industry analyst at Cahners In-Stat Group, a market research firm.

As a result, Qualcomm is not alone in its push for wireless software. Many other technology and wireless players have established similar development efforts.

For example, Openwave Systems, created by the merger of Phone.com and Software.com, has been among the most aggressive companies in signing up developers to work with its software standard. Its wireless Net browsing software has been adopted by most of the largest mobile phone carriers in the world, creating the closest thing to a standard Net software that exists for the wireless world.

The company's dominance of this market stems in large part from its work in helping to develop the WAP (Wireless Application Protocol) standard that most carriers use for wireless Net connections. Other companies, including Nokia and Microsoft, also offer wireless Net software, however.

And Intel (intc) said last week that it is preparing prototypes of a new chip, called the XScale processor, for use in future small devices, from cell phones to personal digital assistants. The move is intended to position Intel as the hardware base in wireless devices running software from a variety of makers.

In addition, Motorola has teamed up with CollabNet to begin offering a suite of software development tools for its so-called IDEN system.

Java 2 clear leader for software development
Although many of these efforts seemingly pit one company against another, in some cases their technologies will work together.

For example, Openwave's browser is already part of the software that runs on Qualcomm's CDMA chipset, as well as on the other operating systems of an estimated 70 million Web-enabled cell phones. The software will work with Qualcomm's new BREW.

Yet instead of banking on one of these many initiatives, carriers are going to a considerable expense to offer access through any of the software and are eager to offer their customers everything they can. It might drain the carriers' resources, and it also keeps them on the sidelines until a clear leader can emerge, industry insiders say.

For their part, some software developers think that despite Qualcomm's new entry into the software development field, the clear leader for software developers remains Sun's Java 2 Micro Edition (J2ME) application. "I think it's safe to say that with 2.5 million existing Java developers, J2ME is facing a bright future," said Bryan Morgan, founder and managing editor of the Wireless Developer Network.

In the end, the development of the wireless Web market and consumers' awareness of the benefits of surfing using a phone in some regions may be the biggest impediment to the growth and success of any of these software efforts.

"You could take a very simple device and make it incredibly complex. To me it sounds like we're years from getting something like this off the ground. How many people today still have a hard time downloading things to their PCs?" said Mobile Insights' Nozick.

John Borland, Special to ZDNet, contributed to this report.

Everyone wants to rule the wireless kingdom.

Big-name technology makers, including Qualcomm, Motorola, Sun Microsystems (sunw), Nokia (nok), Microsoft (msft)--and even chip giant Intel--are looking to become to wireless devices what Windows is to the PC: a universal standard for software developers.

With projections of a multibillion-dollar future, many technology companies are vying to establish a de facto standard for wireless software, creating a new revenue source even if sales of cell phone handsets--the most commonly used wireless devices--slip.

In the 1980s, Microsoft and Intel established dominance in the personal computer market with the Windows operating system and Intel's line of processors. The winner in the wireless standards battle, analysts say, could wind up as the next "Wintel."

"There's a battleground out there. The stakes are big," said Samuel May, a wireless analyst with U.S. Bancorp Piper Jaffray. "The computer industry settled on one operating system. The cell phone (market) is bigger than the computer (market)."

Indeed, worldwide sales of cellular phones have dwarfed PC sales in recent years. But many analysts and company executives are now worried that handset sales are slowing, prompting research and development into entire software architectures suitable for cell phones or whatever new wireless devices come to the fore.

On Wednesday, Qualcomm (qcom) became the latest company to jump into the fray. The company announced a new wireless Internet and software development technology, called BREW (Binary Runtime Environment for Wireless), aimed at allowing developers to create software applications for any wireless phone. The ambitious plan has Qualcomm poised to generate new revenue from consumers who could download and install software onto their mobile phones, in much the same way customers do now with PCs and handheld computers such as Palm and Handspring's Visor.

Qualcomm's BREW is the most recent entry in what's become an alphabet soup of similar standards efforts aimed at dominating the fractured wireless industry.

At least three major wireless transmission technologies--GSM (Global System for Mobile communications), CDMA (Code Division Multiple Access), which Qualcomm developed and licenses, and TDMA (Time Division Multiple Access)--dominate the worldwide market. At the same time, dozens of carriers and handset makers require wireless software and mobile Internet developers to tweak their applications for different phones and carriers. Analysts say this is partly to blame for the slow adoption of wireless Internet services in the United States and their higher cost here than in other areas of the globe.

Qualcomm's software bid
Qualcomm plans to spin off its semiconductor unit and has spent the past two years exiting most of its manufacturing businesses. Tapping into the market for mobile phone software presents the company with a new source of revenue--and one that is resistant to slower handset sales.

"This area that Qualcomm is addressing is probably an area that's going to see huge activity," said Terry Nozick, a wireless industry analyst at Mobile Insights. "We're seeing lots of theories and ideas. But they're all over the place. It's the wireless industry doing what it always does by trying to create so many different standards."

"It's a smart move on their part. Software is a great business to be in because it's a high-margin business," said Ed Snyder, a wireless industry analyst at J.P. Morgan H&Q, an investment bank.

Qualcomm generates much of its revenue from the sale of its own CDMA chip and the royalties it collects from other chipmakers that license the CDMA technology. Now the company also will generate revenue from wireless carriers for licensing BREW.

(qcom) However, some wireless software developers are skeptical that Qualcomm's push will supersede similar efforts by Sun to get its Java technology into cellular phones.

Many analysts forecast cooler sales for the wireless market, prompting some companies, such as Qualcomm and Sun, to consider additional revenue streams from wireless software.

"Wireless is still growing fast, but some people think there are other ways to make money," said Ray Jodoin, a wireless industry analyst at Cahners In-Stat Group, a market research firm.

As a result, Qualcomm is not alone in its push for wireless software. Many other technology and wireless players have established similar development efforts.

For example, Openwave Systems, created by the merger of Phone.com and Software.com, has been among the most aggressive companies in signing up developers to work with its software standard. Its wireless Net browsing software has been adopted by most of the largest mobile phone carriers in the world, creating the closest thing to a standard Net software that exists for the wireless world.

The company's dominance of this market stems in large part from its work in helping to develop the WAP (Wireless Application Protocol) standard that most carriers use for wireless Net connections. Other companies, including Nokia and Microsoft, also offer wireless Net software, however.

And Intel (intc) said last week that it is preparing prototypes of a new chip, called the XScale processor, for use in future small devices, from cell phones to personal digital assistants. The move is intended to position Intel as the hardware base in wireless devices running software from a variety of makers.

In addition, Motorola has teamed up with CollabNet to begin offering a suite of software development tools for its so-called IDEN system.

Java 2 clear leader for software development
Although many of these efforts seemingly pit one company against another, in some cases their technologies will work together.

For example, Openwave's browser is already part of the software that runs on Qualcomm's CDMA chipset, as well as on the other operating systems of an estimated 70 million Web-enabled cell phones. The software will work with Qualcomm's new BREW.

Yet instead of banking on one of these many initiatives, carriers are going to a considerable expense to offer access through any of the software and are eager to offer their customers everything they can. It might drain the carriers' resources, and it also keeps them on the sidelines until a clear leader can emerge, industry insiders say.

For their part, some software developers think that despite Qualcomm's new entry into the software development field, the clear leader for software developers remains Sun's Java 2 Micro Edition (J2ME) application. "I think it's safe to say that with 2.5 million existing Java developers, J2ME is facing a bright future," said Bryan Morgan, founder and managing editor of the Wireless Developer Network.

In the end, the development of the wireless Web market and consumers' awareness of the benefits of surfing using a phone in some regions may be the biggest impediment to the growth and success of any of these software efforts.

"You could take a very simple device and make it incredibly complex. To me it sounds like we're years from getting something like this off the ground. How many people today still have a hard time downloading things to their PCs?" said Mobile Insights' Nozick.

John Borland, Special to ZDNet, contributed to this report.

Topics: Intel, PCs, Software, Software Development

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