As open standards and alliance building become the Holy Grail of the wireless industry, some industry watchers see them as oxymoron and schemes to capture market share.
“Standard groups are paper tigers,” remarked Isaac Ro, senior analyst, mobile and wireless technologies with the Aberdeen group Inc.
“What we have are conditional open standards,” commented Fritz Jordan, analyst with MobileTrax.
The recent Nokia Corp. decision to back Texas Instruments and STMicroelectronics to make CDMA chipsets in an open environment has been viewed by some industry analysts as a counterfoil to Qualcomm Inc. The San Diego-based company has been accused of running a proprietary technology, which has prompted many European-based companies to take measures perceived as intended to shut out CDMA in most of Europe. The Nokia-backed initiative aims at replacing BREW with Java.
Yet, both Nokia and Qualcomm belong to the Open Mobile Alliance, a body formed to promote open standards and interoperability within the industry. TI and STM also are strange bedfellows as they compete against each other in the application processor platforms with TI’s OMAP battling STM’s Dynamic. Both companies indicated at the teleconference announcing the initiative that both wish to continue with their individual products. But both companies also are working together on the OMAPI standard to ensure their application platforms interface.
Microsoft Corp. and Nokia, according to market observers, constitute strange bedfellows in OMA.
Some of the other bodies touting open standards include the WAP Forum, The Wi-Fi Alliance, ipUnplugged Secure Wireless Alliance, Wireless Internet Service providers Alliance, International Roaming for Wireless Carriers Alliance and Mobile Wireless Internet Forum, which also has joined OMA.
Ro said most of these bodies exist to provide what he described as “rehearsed marketing and public relations” positions to their buyers and users.
Jordan identifies two levels of open standards. The first is between the United States and Europe, while the second level is between big and smaller players.
Part of the conflict between the U.S. and Europe hinges on business culture, Jordan commented. In the U.S., individual companies gain market share first and seek standards afterwards. In the Europe, they seek to create standards first and pursue market share later. But underlying both trends, he contends, is self-interest.
“It’s all about capitalism, although in the U.S. we want to gain market share first and worry about standards later,” he said.
Ro holds the same view, referring to certain regulatory bodies and government agencies as possible exceptions. Even among the regulatory bodies like IEEE, says Ro, some of the companies try to influence standards in order to win contracts.
Most of the big infrastructure equipment companies like Nokia, L.M. Ericsson, Siemens AG, Lucent Technologies Inc. and Motorola Inc. play the largest parts in fashioning industry standards.
Jordan said in the pre-GSM era, most of the systems were proprietary in Europe, and the companies came together under one umbrella to create the air-interface protocol to unify business. The United States had no such experience, hence GSM co-exists with CDMA in North America. Qualcomm created an open interface for its BREW platform only after it assured itself a place in the market, some analysts contend.
Jordan and Ro said the big players often create standards and alliances when they are lagging behind in a technology or want to keep the innovative small players in check.
Big vendors Siemens, Nokia and Ericsson announced an alliance to establish standards for push-to-talk after smaller players had made headway elevating the technology into an Internet Protocol standard. Microsoft is said to love standards now, said an analyst, because it does not have the kind of dominance it enjoys in the wired space. With N-Gage, Nokia also wants to stoop to conquer in the gaming arena, where it is still a humble player, just as it is doing in the CDMA space.
Ro said in the short term, smaller players benefit because they can establish their business, but in the long run the big players squeeze out the smaller ones by leveraging their financial resources, name brands, marketing superiority and channels.
Ro and Jordan point out that one basic contradiction with the open standards is that members still make proprietary solutions with the standards because they want to differentiate themselves.
“Building two standards is one thing,” remarked Ro. “Creating and growing and capturing and nurturing market share is another story. That is largely driven by access to capital, not technology.”
