Qualcomm became disillusioned with the Symbian operating system, but now that Nokia is teaming up with Microsoft on Windows Phone 7 devices the mobile chipmaker is set up nicely for gains.
As noted on Thursday, Qualcomm has ported nearly every mobile operating system to its chipsets. However, Qualcomm doesn't dedicate a team to Symbian anymore. See: Qualcomm's Rob Chandhok on mobile apps, chip software integration
Qualcomm CFO Bill Keitel said that an early bet on Windows Phone 7 may pay off nicely. Speaking at the Morgan Stanley Technology, Media and Telecom conference Thursday, Keitel made the following points:
- Qualcomm is the only chip player qualified for Windows Phone 7 right now.
- The company took some lumps for dedicating R&D to Microsoft's mobile OS.
- But the Nokia payoff could be promising.
After the Microsoft-Nokia deal was announced Keitel said "there were a few smiles in the hallways of Qualcomm that day."
We stepped out some time ago with a major investment in high level operating system and porting to Microsoft was one of those. So we're the first to port the Win Mobile 7 and I think we're the only chip set provider yet today. That was a good year effort of hard work for us to get to that point. So you know, we're hoping Nokia and Microsoft will go fast here and we're ready to support them.
After the Nokia Qualcomm battles ended a few years ago, the relationship really started improving and we started building a workforce right next door to Nokia's major facilities in the Scandinavia area. We got a little disillusioned with Symbian and so we pulled back a little bit but we were still focused on MeeGo. But then one of the keys of our chipset business is the support we bring to help people launch devices and a lot of times we have people right next door.
Keitel added that Qualcomm's spending on R&D was approaching 22 percent to 23 percent of revenue---due to moves to support all the mobile OSes---and investors were worried that the company was moving too quickly to support Windows Phone 7. Now Qualcomm's R&D is 17 percent of revenue and the Windows Phone 7 may pay off big time as Nokia ramps Windows Phone 7 volume.
It was no small amount of risk we took of major dollars, major effort. And of course now that we're there our effort is going to be on improving it, improving the performance, expanding the portfolio which we've ported Windows 7 to our chip sets. Hopefully we're ready to and Nokia is interested in a broad portfolio, high end to low end.
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