PPT

684 views

Published on

Published in: Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
684
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

PPT

  1. 2. Qualcomm´s Multi-lemma <ul><li>1) Introduction to the highly systemic wireless industry </li></ul><ul><li>2) Challenges that Qualcomm faces </li></ul><ul><ul><li>Within the Cellular industry Qualcomm faces the challenge of a new standard - WCDMA. </li></ul></ul><ul><ul><li>Within the larger Wireless Industry Qualcomm faces the challenge of another new standard – WI-FI (802.11) </li></ul></ul><ul><li>3) Wireless data opportunities </li></ul>
  2. 3. Cellular System Components Overview Mobile Phone Antenna & Base Station Backend Equipment – Switching, Billing etc. Air Interface & Frequency T1, T3 lines
  3. 4. Cellular Technologies <ul><li>Analog – Uses the complete frequency for one call. </li></ul><ul><li>Time Division Multiple Access (TDMA) – Divides the frequency into time slices, e.g. US-TDMA and GSM . </li></ul><ul><ul><li>Analogous to many pairs of people speaking with pauses that are so small that no one notices the delay. </li></ul></ul><ul><li>Code Division Multiple Access (CDMA) – Call signals are transmitted </li></ul><ul><li>simultaneously, but using different orthogonal codes. </li></ul><ul><ul><li>Analogous to many pairs of people speaking simultaneously in mutually exclusive languages. </li></ul></ul><ul><li>Advantages of CDMA </li></ul><ul><ul><li>10-15 Times the Capacity Improvement </li></ul></ul><ul><ul><li>Lower power usages => longer battery life and less over heating issues </li></ul></ul><ul><ul><li>Geared for Data </li></ul></ul>
  4. 5. Cellular Systemic Industry – 2G CDMA (20% of World Market) GSM (70% of World Market) Technology Chips & Software Stack Phone Equipment Service Providers QCOM – 5% royalties Nokia, Ericsson, Siemens, etc. QCOM – 95%, MOT, LSI, Samsung etc. Nokia, Ericsson, Siemens,etc. Nokia, Ericsson, Motorola etc. Nokia, Ericsson, Siemens, Alcatel etc. Samsung, LG, Sanyo, Sony-Eric, Motorola. LU, NT, Eric etc. Verizon, Sprint PCS, South Korea etc. Nextel, Cingular, T-Mobile, Europe etc.
  5. 6. Mobile Market GSM market CDMA
  6. 7. Cellular Systemic Industry – 2.5/3G CDMA-2000 (1X- 256Kbits/s EVDO-2.4 Mbits/s) GSM (GPRS – 40Kbits/s EDGE-70Kbits/s) Technology Chips & Software Stack Phone Equipment Service Providers QCOM – 5% royalties Nokia, Ericsson, Siemens etc. QCOM – 95%, MOT, LSI, Samsung etc. Nokia, Eric, Siemens etc. Nokia, Ericsson, Motorola etc. Nokia, Eric, Siemens, Alcatel, Motorola. Samsung, LG, Sanyo, Sony-Eric, Motorola. LU, NT, Eric etc. Verizon, Sprint PCS, Nextel, South Korea Cingular, T-Mobile, ATT, Europe etc. WCDMA 2.4 Mbits/sec 2005 Nokia, Eric, Siemens, QCOM- 5% royalties. TI, Nokia, QCOM, LSI, Samsung etc. Samsung, LG, Nokia, Sony-Eric, MOT etc. LU, NT, Eric, Nokia, Siemens, Alcatel etc. Some parts of Europe China, India, Japan, South America etc.
  7. 8. <ul><li>Qcom - 95% of the market </li></ul><ul><li>Scale (partnered with IBM) </li></ul><ul><li>Nokia/Ericsson have an advantage </li></ul><ul><li>5% royalties – guaranteed </li></ul><ul><li>There are more patent holders. How will they be compensated? </li></ul>* 2002 Annual Report √ √ √ ? Qualcomm`s current business $1B Revenues (34% of total $3B) $900 MM Operating Margin (89%) QCOM Technology Licensing $500MM Operating Margin (28%) $12B 12.5% $1.5B Revenues (52% of total $3B) WCDMA CDMA2000 TOTAL market Market share QCOM CDMA Technologies
  8. 9. WCDMA Forecast
  9. 10. Pros and Cons supporting WCDMA <ul><li>Advantages </li></ul><ul><li>WCDMA will be the only technology accepted in Europe (license) </li></ul><ul><li>Upside - Royalty revenues from WCDMA up to $10 Billion </li></ul><ul><li>Early adoption of WCDMA implies early increases in royalty streams </li></ul><ul><li>Disadvantages </li></ul><ul><li>QCOM less likely to be a major player in the chip market – cannibalize existing CDMA 2000 chip sales growth </li></ul><ul><li>Potential adopters of CDMA2000 will adopt a wait and see approach. </li></ul><ul><li>High uncertainty regarding demand (see previous slide) </li></ul>
  10. 11. Qualcomm Strategy in WCDMA <ul><li>Qualcomm is assisting in the early development and adoption of WCDMA </li></ul><ul><li>This will cost Qualcomm significant dollars in R&D, specifically in optimizing WCDMA systems. </li></ul><ul><li>Partnering with a major chip manufacturer to achieve scale. </li></ul><ul><li>Hedging the bets </li></ul><ul><li>Qualcomm is also rigorously pushing CDMA2000, and also its solution of GSM/1x to convert existing non-European GSM providers to CDMA2000 </li></ul>
  11. 12. Wireless Convergence Cellular (3G) Laptop WI-FI (802.11/.15) Free to end user, Service provider pays ISP Service charge to end user Costs Data, Voice over IP Voice, 3G Data Services Airports, McDonalds, Individuals? Etc. Cellular Service Providers Service Providers D-Link, Cisco, Intel etc. Cellular Manufacturers Manufacturers Growing Coverage; No Mobility Excellent Coverage; Mobility Coverage Shared; Free Exclusive Frequency
  12. 13. Wireless Data User Segment Analysis Wireless Access Corporate Access Commercial Services Communication Wireless Access Corporate Access Communication Medium High Medium Mobility Wireless LAN X Mobile Service Providers √ High Medium Low Affordability Wireless LAN ? Mobile Service Providers ? Medium High Low Reach Wireless LAN X Mobile Service Providers √ Low Medium High Speed Wireless LAN √ Mobile Service Providers X
  13. 14. Qualcomm WI-FI Strategy <ul><li>Qualcomm may incorporate WI-FI into its chips. </li></ul><ul><li>Reasons : </li></ul><ul><li>WI-FI can never directly compete with 3G cellular because </li></ul><ul><ul><li>Low Coverage </li></ul></ul><ul><ul><li>No Mobility </li></ul></ul><ul><ul><li>Less security </li></ul></ul><ul><li>WI-FI can add the following benefits to Qualcomm’s chips </li></ul><ul><ul><li>Cheaper last mile solution for service provider </li></ul></ul><ul><ul><li>Higher data rates without mobility </li></ul></ul><ul><li>Anything that grows the demand for data services is good. </li></ul>
  14. 15. The Wireless Data Revolution <ul><li>Wireless Data development phases: </li></ul><ul><li>Person to Person </li></ul><ul><li>Person to Machine </li></ul><ul><li>Machine to Machine </li></ul><ul><li>Cellular Data Strengths: </li></ul><ul><li>Mobile </li></ul><ul><li>DSL like Data rate </li></ul><ul><li>Cellular Data Weaknesses: </li></ul><ul><li>Input/Output Constraints </li></ul><ul><li>Lack of the “Killer Application” </li></ul>
  15. 16. Conclusion <ul><li>The wireless industry is a very systemic industry, composed of various other systemic chains within chains. </li></ul><ul><li>However, it is in everyone’s interest to grow consumer demand for wireless, specially wireless data, and this is what in the end drives the overall strategy of all the wireless companies, cellular and non-cellular. </li></ul><ul><li>The upcoming wireless data boom shall create great opportunities for the prepared entrepreneur. </li></ul>

×