Two years ago, it was seen as an example of a business model gone wrong. Operators and equipment manufacturers that had invested into Qualcomm's CDMA technology were publicly expressing their disappointment over the "high royalties" the firm charged.
A long running patent dispute with Qualcomm saw Nokia virtually exit the CDMA handsets business. Consumers flocked to the rival GSM technology and the future looked bleak for Qualcomm, the company that owned most of the CDMA patents. But two years on, Qualcomm has successfully managed to convince both the CDMA operators in India to expand their network and launch 3G services based on the company's EVDO technology. The dispute with Nokia has been buried, replaced by an alliance between the two. Rumours are that a Qualcomm-powered Nokia computer will hit the market in a few months. DNA catches up with Kanwalinder Singh, the country head of Qualcomm India, to find out what the company is planning for the Indian market.
You seem to have rediscovered some old friends...Have you changed your business model all of a sudden? Have the royalty issues been sorted out?
I don't think there was a change per se. Qualcomm has a royalty structure, which is slightly below 5% of the device price. We have always said that by addressing the affordability of the device, we can make a much bigger contribution to the growth of devices than tweaking with the 5%. So, if a phone was $40, you make it at $20. Tweaking the royalty structure is not the right way to do it.
Investing that money into R&D to make devices more affordable, more varied and to bring those devices into the market is the right way. Anything you do in the Indian market, you have to address the affordability factor. We have always said we will address the affordability issue. Today CDMA phones are retailing at Rs 700. That comes from investment and research that goes into making it affordable so that volumes pick up. It's becoming apparent now that these products are beginning to be launched. So you are hearing a lot about us now.
Qualcomm has been working on launching a low-cost, 3G-enabled PC architecture suited for markets such as India. What's the update on that?
The PC market in India hasn't taken off. Last year, we sold some 2 million laptops in India. Against this, some 3 million smartphones were sold in India. There is a huge pent-up demand for mobile computing -- devices that combine computing and mobility.
Is that demand what Qualcomm is aiming at? Do you have any forecasts for how big the demand is?
The forecasts for Indian markets have always been pessimistic. With the availability of wireless broadband, we have achieved a fundamental breakthrough. And this breakthrough is creating the need for alternatives to current computing (read Intel)
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