Wireless Industry Analyst

Coming from a small company, we are often confronted with one question: Who are we selling our product to? And that begs a bigger question:Who controls the wireless industry? This one is an enigma to most who have not seen it in black-and-white and the trade secret that maps the success of most big players.

Let us start with the food chain in the industry. We have

a) Chip vendors: Companies that provide the core chip for the phone. This piece of silicon provides for all base-band functionalities and typically interfaces with an independently manufactured radio frequency (RF) piece that includes one or more antennas. Chip vendors may have either or both of base-station and mobile chip manufacturing capabilities. Examples include QualComm, TI, Freescale etc.

b) Equipment manufacturers: These are the companies that assemble equipments for both base-stations and mobiles. Thus they have to put together teh chip, RF chain and the interface/platform to make a complete call-capable radio. Examples include Samsung, Sanyo, LG, Motorola, Nokia and of course Apple.

c) Service Providers/Carriers: These are the companies that buy spectrum, set up infrastructure and bring the service to the end user. They may provide voice and data services using suitable equipments. Examples include Sprint, Verizon, Cingular, Vodafone, Orange, Hutch and Reliance. They would be the paying customers for base-stations and in a lot of cases, part-payers for mobile phones too.

d) End User: You and Me.

There are also a few bits-an-pieces players like some Intellectual Property (IP)-based companies that make money by either selling key patents or by suing the big ones who may border on violating some of their key patents. There are also a few companies (like ours) who have some cool contributions to the technology. As is apparent right away, these two categories cannot sway a well-established industry with the big-companies attempting to further their strangle-hold on it. An IP-based company can survive for only so-long before it gets avoided like plague by everyone alike. Again, small companies are likely to be victimized owing to their perceived exclusivity to the contribution that they bring forth to the industry.

Now before we proceed any further, it is also important to mention that companies do not necessarily belong to one category or the other. For example, not until long ago, QualComm built its own phones. QualComm also has a strong IP presence and a major share of their revenues comes from the royalties that they get from their pioneering CDMA patents. Ericsson continues to build both chips and equipments. Freescale spun-off from Motorola.

With this as the basis, in the next part(s), I will attempt to dissect the industry dynamics and the interplay of the lead players in this game that everyone wants to be a part of.