Qualcomm buys content delivery system vendor

Addition of Elata software will help build a marketplace between content providers and mobile operators

Qualcomm further expanded its area of expertise on Wednesday by acquiring Elata, a maker of mobile content delivery software.

The purchase, for about $57 million in cash, will help Qualcomm offer mobile operators a software infrastructure for organizing and controlling content such as ringtones, wallpaper graphics and applications, as well as applications on the Java and Brew platforms.

Elata, based in Poole, England, makes an over-the-air content delivery system that works with GSM (Global System for Mobile Communications), WCDMA (Wideband Code Division Multiple Access) and CDMA2000 networks.

Qualcomm plans to integrate Elata's software with its own Brew technology, which acts as a "virtual marketplace" between content providers and mobile operators, said Gina Lombardi, senior vice president of product management and marketing at Qualcomm. Elata's technology will provide support for standards such as WAP (Wireless Application Protocol), Java and Open Mobile Alliance DRM (digital rights management) 1.0, Lombardi said. Qualcomm hopes the ensuing joint product will help it reach operators outside of the CDMA world where Brew has its roots. By allowing existing 2G (second-generation) cellular operators to run more profitable data services, it should also help convince them to move to 3G, she added.

Downloading of content is a relatively new phenomenon in the cellular world, and mobile operators want better technology to control what their customers can access and use, according to Albert Lin, an analyst at American Technology Research. For example, they want to prevent subscribers from downloading ringtones or using mobile e-mail systems from outside providers, he said. They also want to manage use rights for copyright material to prevent piracy. Elata's system is essentially a tool for operators to create and manage "walled gardens" of their own revenue-generating content and services, according to Lin.

For both security and revenue reasons, mobile operators want to control what content and applications their customers can use, Lombardi said. Elata's software gives them tools to do that but also allows them to open up their networks, she added.

Qualcomm's main business has been providing CDMA and 3G technology to mobile equipment vendors, but recently it has been branching out. The Elata acquisition comes less than a week after its agreement to purchase Flarion Technologies Inc., maker of a mobile wireless broadband technology. Qualcomm also has recently been pushing a mobile multimedia network technology called FLO (Forward Link Only). The joint Brew-Elata system could be used on a FLO network, Lombardi said.

Qualcomm will continue to sell Elata's software, which is used by several large customers in Europe, and it will support operators that use it, according to Lombardi. She would not speculate on when the joint product would become available but said she hopes it can be on the market within a year. Within a few months, Qualcomm expects to add a software adapter to Elata's technology for support of applications written for the Brew platform.

Copyright © 2005 IDG Communications, Inc.