Qualcomm Considers Wi-Fi Phones

By Ed Sutherland

August 02, 2002

Wireless Networks have been slowly expanding from just 802.11 on to the cellular networks. Now one of the cell phone leaders appears to be adopting Wi-Fi as an adjunct to CDMA.

Months after the CEO of cell phone giant Qualcomm downplayed the importance of Wi-Fi to next-gen wireless networks, the company has become the latest cellular vendor embracing 802.11.

"We are definitely evaluating and developing" Wi-Fi features for upcoming chips, says Stacy Getz, Manager of Public Affairs at Qualcomm's CDMA Technology group.

Getz said a date has not been set when the new chips will start shipping.

When they do, the San Diego, Calif.-based company will begin adding Wi-Fi features to the chips used in millions of Code Division Multiple Access (CDMA) phones. Qualcomm controls the patents required for around 20 percent of cell phones and networks worldwide.

Sometime is Now

In a February speech to company shareholders, Qualcomm CEO Irwin Jacobs called wireless local area networks (WLANs) "sometime, somewhere" access not able to compete with the more widespread 3G cellular networks.

"People don't care how they access wireless broadband, so long as it works," says Isaac Ro, an Aberdeen Group analyst. Ro says carriers are trying to "box-out" Wi-Fi hotspot aggregators, such as Boingo Wireless. who are attempting to cobble together a national network.

Cell phone companies view Wi-Fi as a way to boost the reliability and usefulness of upcoming 3G networks. A number of phone makers have begun offering ways to provide customers with integrated Wi-Fi and 3G support.

In an effort to create a nationwide network of hotspots, wireless heavyweights AT&T Wireless, Cingular Wireless, Verizon Communications, along with Intel and IBM are pondering the possibility of forming "Project Rainbow," an alliance that could boost the number of available hot spots.

Mutual Benefits

Allen Nogee, an analyst with Instat/MDR, says such an alliance of carriers and networks could benefit both technologies. Wi-Fi hot spots, now limited to coffee shops, airports and neighborhood area networks would expand their reach using the more mature cellular infrastructure.

Cellular providers see Wi-Fi offering their customers service where coverage might be spotty, such as indoors, as well as helping off-load the demands high-speed 3G networks will place on cell phones.

Qualcomm's entry into the Wi-Fi race marks a break from what until now has been dominated by GSM-based cellular carriers. The GSM standard is used by 70 percent of the world's wireless phones.

VoiceStream, purchased by Germany's T-Mobile International and re-branded as T-Mobile Wireless, wants its GPRS customers to connect at 11 Mbps at hundreds of participating Wi-Fi hotspots. Customers could then switch to the carrier's GSM/GPRS service when no hot spot is available.

Other carriers, including Nextel, the UK's BT, and Japan's NTT DoCoMo, have jumped on the Wi-Fi bandwagon.

Actual integration of GPRS and 802.11 should take place early next year, as the carrier introduces a dual mode GPRS and 802.11b PC card allowing subscribers to move from GPRS to Wi-Fi without the hassle of re-login or re-establishing a network connection.

Wi-Fi/3G Impact Update

The UMTS (Universal Mobile Telecommunications System) Forum, a group promoting 3G services, released an updated report on the potential impact of WLANs on 3G profits. The report predicts WLANs will add $2.8 billion to the coffers of 3G providers.

The report said public hot spots "will be used by almost 20 percent of business users in 2005." Ignoring the benefits of Wi-Fi "poses a risk to 3G operators that choose not to participate," says Dr. Bernd Eylert, chairman of the forum.

Along with phone makers and network providers, a number of firms making telecommunications gear are offering ways to span the Wi-Fi cell phone gap.

Toshiba, along with Hewlett-Packard, is offering their enterprise and small business customers ways of setting up hotspots. At a recent expo, Hewlett-Packard unveiled its $10,000 custom bundle of hardware and services allowing corporations to create hot spots at large stadiums and airports. On a smaller scale, Toshiba demonstrated its $199 Wireless Broadband Hotspot network starter kit for such venues as coffee shops and small businesses.

Toshiba wants to see the number of U.S. hot spots climb from the current 1,200 to more than 10,000 by the end of 2002.

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