Airgo(ne) to Qualcomm

Qualcomm announced last week its purchase of two companies, RF MicroDevices for its Bluetooth and Airgo Networks for its pre-802.11n chipsetsand intellectual property surrounding MIMO. Although both companies havereceived little attention in the enterprise, if Qualcomm has its way,Airgo's technology would find its way into every handset and laptop.

Airgo, a Silicon Valley company, developed a technology it coined MIMO(Multiple Input Multiple Output) that leverages multipath to produce aWi-Fi product offering higher performance and greater coverage than whatwas previously possible. Multipath describes the physical reality that notall the electromagnetic signals propagating from a transmitting antennaarrive at the receiving antenna at the same time. Some may take multiplepaths before arriving. A simple rubber-duck antenna, for example, emanatesa signal in the shape of a donut. Although some of the signal may go directlytoward the receiver, some of it may bounce off walls or other hard objectsbefore arriving at the receiver. Because all RF travels at the same speed,those signals traveling a longer distance take longer to arrive. This normallyreduces signal quality, but by using multiple antennas it's possible to exploitthe multipath to improve throughput. By simultaneously sending different signalsover each radio-antenna chain and de-coupling them at the receiver, it'spossible to increase throughput and, because of signal processing gain,distance. MIMO forms a key part of the developing IEEE 802.11n standard,which raises throughput rates above 100 Mbps. Airgo has forged relationshipswith several of the leading consumer Wi-Fi vendors, developed several generationsof chipsets, and just announced its fourth-generation chipset, the AGN400.

MIMO is, without question, a major building block in several wirelesstechnologies. Although Airgo has several dozen patents pending that hasn'tprevented Atheros, Broadcom and Marvell from building their own MIMO-enabledchipsets, offering similar claims of performance and coverage. Besides theWLAN chipset vendors, Motorola has entered the MIMO space by acquiring OrthogonSystems, maker of point-to-point wireless systems. Nortel has aggressivelymarketed its mobile MIMO-powered WiMAX solution that is positioned to outperformcompetitive products in terms of coverage, spectral efficiency and, of course,throughput. Motorola emphasizes the "diversity" capability of its WiMAX products.Ericsson has demonstrated MIMO support in its HSPA (High Speed Packet Access),which combines HSDPA in the downlink and Enhanced Uplink in the uplink, both ofwhich are specified in the 3GPP Release 5/6. Future standards on the 3GPP road map,HSPA+ (HSPA Evolution) and LTE (Long Term Evolution), specify MIMO as a key feature.Based on this laundry list of acronyms you should recognize that MIMO be asignificant part of WLANs, WiMAX and cellular products.

Qualcomm was founded to provide a strongly competitive alternative to GSM.When it developed CDMA and some of the surrounding technologies, it beganlicensing its intellectual property to the likes of Nokia and Broadcom fora significant portion of the BOM (bill of materials). Fiscal fourth quarter2006 results show licensing and royalty revenue to have contributed a consistent36.5% of both last quarter and last year's revenue. There has been some resistanceby mobile phone manufacturers to continue paying royalties of approximately 4%to 5% for 3G products that don't contain nearly the same percentage of Qualcommintellectual property and patents that its 2G products had. If licensing rateswere reduced to levels that Nokia and other mobile device manufacturers wouldconsider "reasonable and non-discriminatory," Qualcomm's revenue stream couldexperience a substantial hit.

Although Qualcomm would not likely admit to it, diversifying to other wirelesstechnologies is a way to hedge its bets as well as to establish and extend otherlicensing and royalty strongholds. Qualcomm has plans to use its MediaFLO technologyto deliver video to mobile devices, nationwide, at the 700-MHz frequencies.Qualcomm has licensed spectrum across the United States and signed up a keytenant, Verizon Wireless. In January 2006, Qualcomm completed the acquisitionof Flarion Technologies, one of the admittedly more successful mobile broadbanddata vendors, both for its product lines and technology, and its intellectualproperty and patents on OFDMA (Orthogonal Frequency Division Multiplex Access),a key component to Mobile WiMAX.The acquisition of Airgo gives Qualcomm a lead into the consumer Wi-Fi marketand enhances its Snapdragon platform, which is targeted for mobile products,such as smartphones. Besides a processor and DSP (digital signal processor),the Snapdragon platform will also offer options for several 3G and highertechnologies, as well as Wi-Fi and Bluetooth.

Several press accounts have noted Airgo CEO Greg Raleigh's excitement in addingWWAN technologies such as WiMAX and 3G to mobile form factors such as laptopsand smartphones. This isn't just post-acquisition rhetoric: Airgo has championedmobile devices support before in relation to the IEEE 802.11n draft process. Someof the 11n proposals didn't provide adequate support or consideration for mobiledevices and Airgo publicly emphasized its importance. Airgo's technology mightfind a natural fit within Qualcomm's mobile device framework.

Even if the pessimism expressed by prognosticators concerning Qualcomm's futurein CDMA holds true, its acquisition of Airgo solidifies the company's abilitiesto deliver MIMO-enabled products among several wireless platforms. Airgo maybeairgone, but its technology will live on.