Qualcomm Inc (QCOM)

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Qualcomm’s Wi-Fi for Phones

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Qualcomm is integrating Wi-Fi functionality into its chipsets so cell phones can use wireless LANs.
September 23, 2005

Qualcomm launched chipsets on Friday that will give cell phone users access to Wi-Fi networks so they can make VoIP calls over the Internet and simultaneously transfer data and run web-based applications.



The company’s Mobile Station Modem chipsets will support a wireless local area network (WLAN) module from Royal Philips Electronics of the Netherlands to offer connections to Wi-Fi networks that support the 802.11b and 802.11g standards.



Cell phones are increasingly competing with portable devices and notebooks equipped with Wi-Fi chips as ways to access the Internet wirelessly. Uniting the two could provide a way for cell phone makers to break into this market, as well as the growing market for VoIP calls.



“Our work with Philips helps us to address the demand for additional functionality in mobile devices,” said Mike Concannon, vice president of strategic products for Qualcomm CDMA Technologies. “This strategic relationship delivers a number of new possibilities, which we look forward to making a reality.”





Shares of Qualcomm rose $0.45 to $44.45 in recent trading.



Standards Brew

The chipsets will also give cell phone users access to Qualcomm’s code division multiple access (CDMA) mobile phone technology and support high-speed 2.5G and 3G (third-generation) variations such as CDMA2000 and wideband CDMA (WCDMA), also known as universal mobile telecommunications system (UMTS).



The combination of Qualcomm with Philips enables the chipsets to support the wide array of standards.



“We are pleased that Qualcomm has chosen Philips’ WLAN solution to help meet the growing demand for greater connectivity in mobile devices,” said Paul Marino, general manager of connectivity at Philips Semiconductors.



The chipset will allow mobile phones to employ Wi-Fi technology to connect at speeds up to 54 megabits per second. The broadband capabilities are scheduled to be available by the end of the year.



Qualcomm did not state when mobile phones will be available that use the chipset, or which phone makers will offer the technology.



Qualcomm owns numerous patents on CDMA technology. Phone makers that sell phones that run over CDMA networks, such as Motorola, Nokia, Samsung, LG, Sanyo, and Kyocera, need to license the technology from Qualcomm as do wireless carriers such as Sprint Nextel and Verizon Communications.



Those licensing fees could rise if the phone makers and networks decide to leverage the new capabilities. Wireless carriers may also hesitate to surrender any business to the VoIP networks they compete against, unless they can work out a way to charge for the VoIP calls as well.



Nevertheless, the combination of high-speed Internet access and cellular service could provide a powerful incentive for phone makers and carriers to start putting the new chips into their products.