Qualcomm gives the first hints of a market battle with OLPC

With Europe, North America, and Japan facing some of the worst economic conditions in decades, manufacturers are looking to China and Southeast Asia for shelter. Now, a connectivity provider says it has a plan.

With PC manufacturers looking to emerging markets around the world to help them through a slumping global economic situation, we've learned this morning that they're about to find themselves with unexpected company: Qualcomm, which licenses connectivity technologies such as CDMA and HSDPA for phone and handset manufacturers, announced this morning it has come up with a reference design for what it's calling an "alternative PC," that it has already licensed to one Southeast Asian manufacturer, Inventec.

That category of device, which Qualcomm has dubbed "Kayak," could address the demand for functionality in a mobile form factor that companies such as Samsung and Intel are looking to capture using their small PC or netbook form factors (what Intel now calls "MID"), with a 3G device instead. Such a device would include Qualcomm's Mobile Station Modem chipsets -- which, ironically, Samsung devices already use -- though little else is being said about the applications processing technology of Kayak other than that it will run the Opera Web browser.

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Such small systems could be marketed in developing regions of the world where devices such as the OLPC are presently targeted.

There are a multitude of unanswered questions which BetaNews has delivered this morning to Qualcomm, and as always, we'll let you know how the company responds. Most intriguingly perhaps is the implication, through the inclusion of Opera, that the Kayak specification will give some specificity to a manufacturer's choice of applications processors, and how much choice that may be.

Until we know more from Qualcomm, perhaps the best clue available to us about what a Kayak "PC alternative" might look like comes from Taiwan-based Inventec, Qualcomm's first Kayak client. Inventec builds machines that can be rebranded by others and resold. In the existing handset category, Inventec appears to prefer Windows Mobile devices, and lists Intel's MID form factor as among the many netbook styles it supports. But in the netbook category, Inventec produces netbooks and small PCs under its own brand, for very competitive prices.

Most notably last May, the manufacturer unveiled its V10 netbook -- with a 10.1-inch screen, 128 MB of DRAM, 20 GB hard drive, and a Via C3 processor (remember Via?) -- for the equivalent of $230. Not a big system, but also not a bad price. It's not inconceivable that a reference design that's loose on the applications specs but firm on connectivity could be adapted to a design like the V10.

Qualcomm can afford to take this gamble. Last week, it released quarterly earnings reports showing revenue up 44% for the previous quarter on an annual basis, to $3.33 billion. But net income dropped for the quarter by 22% annually to $878 million; and like everyone else in this industry, Qualcomm's guidance was full of warnings.

Though last week, executives didn't mention the Kayak design by name, they did drop hints as to future moves in emerging markets. Single-chip CDMA solutions, they said, were helping make inroads for Qualcomm in those markets, and were among the strong selling points for the quarter. When asked whether economic trends in recent weeks might bode poorly for emerging markets, (according to Seeking Alpha's transcript) Qualcomm CEO Paul Jacobs responded, "As we look forward into the next year, we are seeing more trend towards emerging markets as opposed to away from emerging markets."

The route toward the calm port in the storm may be getting crowded.

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