Qualcomm Out Of 4G

“Three months ago it was a three horse race, LTE, Wimax and Qualcomm, now it’s a two horse race: LTE and Wimax”, says Rupert Baines, the vice president for marketing at PicoChip.

Of course Qualcomm has got a few years left to clean up on its CDMA technology where it’s been hugely successful, becoming the largest fabless chip company in the world.

But, in the meantime, Qualcomm has made itself hugely unpopular in the industry by asking for unreasonably high royalties, and picking legal fights with companies which decline to pay them.

“In three years’ time we’ll start seeing LTE happen, and Wimax will be successful, and what do Qualcomm do then?” asks Baines.

Rather pathetically, Qualcomm has been muttering that it has a patent position in LTE. That’s a bit sad. It’s like acknowledging it can’t win in a fair fight.

Everyone wants to see free and open competition in the chip market. That’s good for the whole industry. But when a company tries to skew the market by aggressively over-claiming on its patent position, the whole industry loses.

Time was when chip companies cheerfully shared IP without thinking much of it. Everyone had to share the patents, and everyone did on reasonable terms.

The culprits in changing that period of happy innocence are Intel, Rambus and Qualcomm.

In the case of Rambus, it turns out to be over-active investors insisting on the company over-charging for IP, and being over-litigious pursuing its claims.

Very likely it is Wall Street, once again, which is pushing Qualcomm into its quasi-paranoid pursuit of excessive IP charges and over-aggressive litigation.

That’s sad for the industry and it’s also sad for Qualcomm which, with all its technological and financial success, is effectively saying that it doesn’t fancy its chances in a straight battle in the chip marketplace.

Qualcomm needs to accept that its aim should be to produce the best chip in the market.