Fear and Loathing of Qualcomm

An article posted this morning by Rethink Wireless touches on Qualcomm’s intended involvement to bid on spectrum in India. As many of you know I’ve been an evangelist for WiMAX technology since long before Clear ruined all my dreams and desires with their deployment of slow, not-as-good-as-telco WiMAX network, my notes and fears about Qualcomm’s intentions are not pro-WiMAX, they’re Anti-Qualcomm.

Back in the day, Qualcomm was one of the original parties involved in the creation and support of CDMA technology. CDMA may sound familiar, in its simplest form comparing a CDMA cell phone and a GSM cell phone: GSM phones have SIM cards (or data chips) that are plug-and-play, CDMA cell phones don’t have a simple means to swap between devices. When Qualcomm originally released their CDMA base stations, their stock went crazy – in fact it’s how I paid for college, selling high – but their CDMA technology would later reinforce US Telecom’s multi-year contract/obligation to a particular carrier. While great technology can inspire revolution, can enable users to do great things, it can also be restrictive of future innovation and flexibility for users.

Let’s step back a moment. Market share for CDMA technology: 18%. GSM has global in its name! It’s the accepted standard in Europe and Asia. Two regions, I might add, have far better networks, device offering for users and probably have greater bandwidth consumption.

In my experience, albeit limited, most phones in Europe and Asia are a style of GSM technology that is based on SIM cards or data chips. If a user wanted to get a new device of their own accord they could do so with minimal barriers to attain a new device. (Cost counts as a minimal barrier.) so abroad, I’ve experienced a system where you get a coverage plan (first) and then the phone (typically a non-uber-smart-phone) comes along free. Phone being the razor and coverage plan being the razor blades. Later a user can choose to upgrade or move to a different device for (typically) the full price of the device. Without contract renewal, without different commitments or requirements imposed by the service provider.

T-Mobile is actually moving to that type of model: get a cheap cell phone plan, no commitment, but pay full price for a device. Part of (what I think) the business plan behind this: There’s this underlying idea that if you buy a device unique to T-Mobile, you’ll stay with T-Mobile because you can’t take your device anywhere else. The investment, the contract equivalent becomes the device and its price tag. You could take your SIM card, move away from T-Mobile or your full-priced device, but a lot of cost would be involved. This presents issues to people who are price conscious and care about managing their money.

Some people are exceptions: regardless of price, the money they’ve thrown down for a device is gone, lost forever, money already spent – and the investment is not really recognized. These are the same people that cannot manage their money and will likely have troubles paying their bills for their service plan later. Ignoring their mis-management of funds, this model from T-Mobile (and the European/Asian model) using GSM technology, to allow users to jump between devices allows people the flexibility to switch devices.

In the US, you sign up for a plan, pick a device and then you get the pleasure, honor and privilege of being stuck with that same crap for at least a year, often two. I would argue Qualcomm is a major proponent of this user-flexibility-crippling business model.

Therefore, when I hear Qualcomm is getting ready to bid on (anything), I immediately experience fear. Some technology that will be available to a large, accessible user base will ultimately lock people down, create bad user experience and any good that might exist in the technology or its deployment gets dwarfed by marketing and subscription plans or even throttling of availability of said technology.

Qualcomm stock paid for my college tuition, so they hold a special place in my heart. However the technology championed by Qualcomm goes into the hands of a telecom company, who promptly destroys full customer potential for the benefit of a profit. Customers become shredded by razor blades.

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