Interview with People Involved in BREW Business

K-tai Watch
July 14, 2003

The following translated interview with Ted Nozaki, director of business development, Qualcomm Japan, discusses the success of BREW worldwide. Nozaki also discusses BREW in Japan with KDDI and notes, "The fact that BREW has spread rapidly worldwide should provide a great business opportunity to Japanese content providers."

Qualcomm's Nozaki: "Even Single Chip Can Provide Smooth Working Environment"

Qualcomm has been promoting BREW. In Japan au provides cellphone handsets which support the standard. Kei-tai Watch interviewed Takayuki Nozaki, Director Business Development, Qualcomm Japan.

Current State of BREW

Q: Where does BREW stand?
A: BREW has been commercialized by eight carriers in six countries. KTF was the first carrier to launch a BREW service in the world. Other service providers are Verizon Wireless, ALLTEL, and U.S. Cellular from the US, China Unicom of China, Telstra of Australia, and Vivo of Brazil. As of March this year, there were more than 150 million CDMA subscribers. Of the top 10 carriers, six have provided BREW services. No doubt that BREW is a rapidly expanding platform.

Q: Why was BREW first introduced in Korea?
A: Korea's IT industry seems to challenge something new. The 1xEV-DO service has been commercialized before the World Cup last year. Since KTF launched its BREW service in November 2001, more than 4 million people have signed for the service. There are more than 40 types of BREW handset and over 500 applications available. In combination with the 1xEV-DO service, data-based ARPU is increasing in Korea.

Q: How about BREW in the US?
A: Verizon has about 33 million subscribers. Since it launched a nationwide service in June 2002, the carrier claims that the number of application downloads has reached 12 million. More than 8 million BREW terminals are said to be sold by year-end. Although the US is considered "behind" in the cellphone business, Verizon's success in the BREW service has stood out.

Issues Over Corporate BREW Applications

Q: Though it may be challenging for Sunday programmers, what do you think about user-developed applications?
A: I don't think we need to fundamentally change the principle of BREW. One thing about user-developed applications is how competitive they are. We may not be able to discuss user-developed applications and content on the same level. There are a huge number of accesses to user-developed content, but that reflects the fact there're quite a few people who can produce content. But, when it comes to how many people can write applications, the story is different. Even if there're not enough applications, we may not be disadvantaged as much as people think. At any rate, most applications are developed by professionals. The lack of a framework where users can write applications freely could possibly become an issue only for corporate users. Although Java allows corporate users to write applications on their own while BREW does not permit that, what boils down to is how we deal with professional programmers. KDDI is interested in solution business and does properly deal with such programmers, so a concern over the lack of user-developed applications should be wiped out.

Q: Handset makers want to sell their handsets worldwide to achieve the economy of scale. Couldn't we say the same thing for application developers? But, in reality, applications are checked in each country.
A: KDDI tries to work it out with overseas carriers, but how standardization issues will be dealt with remains to be seen. The standard BREW platform remains unchanged, but each carrier tries to adjust it to cope with its own competitive marketplace. The fact that BREW has spread rapidly worldwide should provide a great business opportunity to Japanese content providers.

Updated Annually

Q: How does Qualcomm position BREW in terms of its semiconductor strategy?
A: Our basic approach is to think about the ultimate cost competitiveness and provide comprehensive solutions. We believe that even a single chip should be able to provide an optimum solution when it's combined with a smooth application platform. We've been saying that single-chip BREW solutions could be equal to or better than our competitors' Java solutions, although people haven't believed us. But, now they should know what we mean as BREW was launched.

Q: The current BREW handsets are high-end models. But, low-end users should benefit if all handsets support BREW.
A: BREW is small and light. A BREW single-chip should be able to cover low-end to high-end solutions. This is possible in China and the US where handset specs are more stringent than in Japan.

Q: How often are you going to update BREW?
A: Basically, annually. KDDI first offered BREW2.0, so BREW3.0 will be out by mid-2004 or later next year. Competition is intensifying in each country, so unless carriers have to keep up with upgrades.