Jul 28, 2009 2:42 PM,

VZW, Qualcomm targeting M2M in tandem

By Kevin Fitchard

Combining Qualcomm technology with Verizon’s network, new venture hopes to create end-to-end telematics solutions that scale from industrial applications to consumer devices

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Since Verizon Wireless (NYSE:VZ, NYSE:VOD) kicked off its open development initiative in 2008, its new vice president Tony Lewis has stressed the need for VZW to find partners to help it tackle the vast market of emerging mobile devices and machine-to-machine (M2M) communications. Today, however, Verizon is going far beyond merely partnering; it and Qualcomm (NASDAQ:QCOM) are forming an entirely new company to address the M2M market.

Announced today ahead of VZW’s application developers’ conference in Silicon Valley, the new as-of-yet-unnamed joint venture will not only combine Verizon’s network assets with Qualcomm’s technology assets but also create a platform for creating end-to-end telematics solutions. The JV will seek out prospective customers, help them develop M2M strategies and business models, customize devices and tailor service plans on VZW’s 3G—and eventually 4G—network.

The 50-50 venture will be headed by former Qualcomm vice president of global smart services Steve Pazol, and while it will be closely tied to VZW’s open development group and Qualcomm’s M2M division, it will function as an independent company, Lewis said. If the venture’s customers find that a network other than Verizon or a technology platform other than Qualcomm’s would fit their needs better, the JV is free to support them, though Lewis added that the goal is to provide enough flexibility and scope that no customer would need to look outside of it for solutions.

“This is an opportunity for us to jump-start the market,” Lewis said. While Verizon Wireless has traditionally focused on direct consumer and business relationships, the operator has grasped the potential of M2M in recent years as the market evolved from fleet tracking and security systems into a much broader market encompassing everything from smart utility grids, telemedicine to embedded consumer electronics such as eBook readers. While VZW didn’t ignore the M2M market, Lewis said, it created vertical solutions for specific customers, making it very difficult to scale for smaller customers and more niche business cases.