Now that Qualcomm Inc. has signed a new royalty-bearing patent agreement giving Soma Networks Inc. license to develop, manufacture and sell subscriber units, modem cards and infrastructure equipment based on Qualcomm’s OFDM and OFDMA technology, the wireless industry is buzzing with guesses as to Qualcomm’s next WiMAX move.
To understand the buzz, consider that WiMAX uses OFDM technology and know that Soma provides last-mile broadband wireless access technology and said its agreement with Qualcomm future-proofs its solutions and protects its customers’ investments.
“By expanding our agreement with Qualcomm, we ensure that we have clear rights to use Qualcomm’s intellectual property within our recently announced SoftAir FlexMAX solution,” said Yatish Pathak, chief executive officer of Soma.
Soma builds WiMAX equipment, and the company’s new licensing agreement with Qualcomm indicates that Qualcomm is beginning to develop a technology licensing business in the WiMAX industry. Indeed, when Qualcomm acquired OFDM vendor Flarion Technologies Inc., Qualcomm said it hoped to earn royalty payments from WiMAX vendors.
In a recent report, CIBC World Markets wrote that Qualcomm’s OFDMA license announcements suggest that the company has plans to benefit from any progress made in WiMAX and noted that Qualcomm has revealed that its Internet Protocol base in OFDM/OFDMA stands at more than 620 issued and pending patents. A base that could wrankle future WiMAX deployment plans for competitors such as Intel Corp., which has been a significant backer of WiMAX technology.
“We believe that as WiMAX makes its baby steps in 2007, Qualcomm will be more aggressive in targeting this opportunity and will look to establish more licensing agreements to entrench its IP as essential to WiMAX,” said CIBC. “We would not be surprised if Intel would look for ways to avoid paying Qualcomm royalties on WiMAX. Could a second battle be in the making? Time will tell, but clearly, the sides are starting to draw circles in the sand.”
Current Analysis’ Peter Jarich also wrote about Qualcomm’s WiMAX position, stating, “Qualcomm has been steadily asserting its OFDM and WiMAX importance. Pulling in an OFDM/OFDMA licensee adds some credibility to this assertion-though SOMA (a small vendor and a new WiMAX entrant) lends less credibility than a WiMAX heavyweight.”
Jarich also pointed out that signing up initial OFDM/OFDMA licensees sets the stage for more to follow, particularly because many major WiMAX players, such as Motorola Inc., Nortel Networks Ltd. and Alcatel Inc., already have a relationship with Qualcomm based on W-CDMA and CDMA2000.
However, Jarich also sheds light on the fact that the WiMAX Forum has deemed 802.16 an open standard. Interestingly, WiMAX Forum President and Chairman Ron Resnick also happened to work at Intel’s Broadband Wireless Division as its director of marketing.
Regarding the WiMAX speculation, Qualcomm stated, “Qualcomm is licensing its OFDM/OFDMA patent portfolio to companies interested in developing, manufacturing and selling OFDM/OFDMA products. Qualcomm believes it has OFDM/OFDMA IP that applies to various OFDM/OFDMA wireless solutions being proposed, including WiMAX.”
Roger Entner, vice president of wireless telecom at Ovum, summed up the situation, saying, “This will play itself out in court. If Qualcomm can prove that it, or a company that it owns, did the groundbreaking development work on OFDM, and that they filed patents accordingly, then they deserve to charge for it. Qualcomm is an intellectual property company, and they live and die by selling their inventions. They don’t want to stop the technology; they just want to be paid for it.”
Entner added: “This is sort of like a chess match between Intel and Qualcomm. For Intel, the battle over WiMAX royalties is just a pawn. If they lose, they will pay Qualcomm for WiMAX. For Qualcomm, this is more like a queen or a bishop.”
Intel and the WiMAX Forum both declined to comment for this article.
