Windows Opens on Wireless Data: Qualcomm/3Com agreement could help create new revenue for wireless carriers

An agreement between Qualcomm and a 3Com subsidiary that combines code division multiple access technology with a personal digital assistant platform could help build momentum for wireless data, a potentially significant value-added service for wireless carriers.

The agreement will allow Qualcomm to license Palm Computing's industry-leading mobile computing platform for integration into future CDMA wireless communication products. Qualcomm will use components of the Palm Computing platform to develop new products to support data applications, e-mail and the Internet in wireless computing environments.

"This is one of the first fundamental steps toward creating a new market for wireless data," said Mike McGuire, senior analyst for mobile computing at San Jose-based Dataquest. "There are more steps needed to turn the technology into something that every provider will build a business model around, but the creation of a platform that at least facilitates that is important."

Qualcomm and Palm Computing officials said new products that spring from the agreement will combine the technologies. However, it was still unclear whether they would integrate voice technology into the PalmPilot product or use Palm Company's technology in a Qualcomm-based device.

"It's too early in this agreement to speculate as to what forms these devices will take," said Joanne Coleman, director of marketing for Qualcomm. "Our goal has been that every Qualcomm phone will be a smart phone with the functionality to allow it to use wireless data and not be based on a specialized or proprietary solution."

The Palm Computing platform is as close to a standard as the wireless data industry gets. The platform commands a 66% market share of the world's hand-held computing market, according to Dataquest.

"Wireless data has existed for a while in the form of proprietary solutions from Motorola and Ericsson," said McGuire. "But in terms of a phone that individual customers could use to call in and get information through their wireless provider, this is a first."

With current technology, CDMA-based wireless data solutions can transfer data at a rate of 14.4 kb/s-fast enough for the e-mail, messaging and other simple services projected for the new platform's early uses, Coleman said.

"A lot of the conversation around the agreement has focused on text-based applications, for which 14.4 [kb/s] isn't a bad speed," Coleman said. "Of course, that will change as demand grows for graphics-based applications, but the Palm platform is capable of handling such changes in data rates very easily."

Although the Palm Computing platform gained acceptance by letting users transfer data to and from their own desktop computers, a combined telephone/computing platform would enable users to access carrier-developed content and network services. This would open the door for a new set of value-added products that could add to service providers' revenues.

"Competing with other providers on the basis of coverage quality is something customers have a hard time understanding," said Ira Brodsky, an analyst at Chesterfield, Mo.-based Datacomm Research. "But saying your network provides access to news pages and allows e-mail and messaging is something very tangible that users can understand." Such data applications can help fight churn, he said.

Meanwhile, developers of GSM-based wireless devices have announced plans for a menu-driven wireless e-mail application based on subscriber identity module (SIM) cards. The SIM card can run software independently, and new applications can be programmed wirelessly into the card after purchase, according to Alcatel, Schlumberger and Sendit, which have signed a memorandum of understanding to build the application.