Japanese operator NTT DoCoMo and South Korean handset maker and component supplier Samsung, as well as Fujitsu, NEC, and Panasonic, are partnering up in an attempt to take on Qualcomm, who according to Japanese publication Nikkei has 80% of the baseband market. What’s a baseband you might ask? If you know what a modem is, then you already know what a baseband does. It’s a chip that makes sure your mobile phone connects to a wireless network and delivers you your email, Twitter, Facebook, and whatever else you happen to do on the internet. The project will kick off immediately and will have 30 billion yen ($390 million) pumped into it, with over half coming from NTT DoCoMo. When all is said and done, the products this joint venture will create will end up being used in a majority of Japanese mobile phones and likely in Samsung products as well. This move is significant because Samsung currently manufacturers their own processors for smartphones and tablets, but they still rely on an external partner for providing cellular connectivity. If they can bring that in-house, then they could start selling complete platforms, just like Qualcomm does, and both NVIDIA and Intel hope to some day do as well.
This is also good news for DoCoMo, because they’re an incredibly advanced operator who wants to be the first to adopt the next big wireless standard. In this case, LTE-Advanced. Instead of relying on Qualcomm’s time table for delivering innovation, which looks at the global market as a whole, this joint venture can run circles around everyone, making chips that are several generations ahead of everything else on the market.
Should Qualcomm be scared? Not really, they’ll likely maintain their lead in the baseband space because they’re just so damn good at what they do. These companies teaming up are simply looking to introduce some competition to Qualcomm’s near total monopoly in order to bargain some lower prices.
[Photo of the Gundam statue Japan built]