With smartphones surging, is Brew worth saving?

SAN DIEGO--A quarter century ago, on July 1, 1985, seven tech industry veterans met in the home of Dr. Irwin Jacobs to form Qualcomm, devising a plan to provide contract research and development services targeting the nascent wireless communications segment. Fast-forward to 2010, and Qualcomm is a very different company--and it's looking to mutate again. Despite the dominance of feature phones, which still represent close to 80 percent of the U.S. device market, Qualcomm's mass-market Brew application platform now exists in the shadows of smartphone operating systems like iPhone and Android, which have captured the attention of both consumers and mobile software developers alike. So Qualcomm's first Uplinq developer conference isn't so much a reinvention of previous events under the Brew banner as it is a reaffirmation that the platform still matters--and that developers can still build successful businesses on its back.

"Past Brew events focused on just one platform. Uplinq is focused on many platforms," said Qualcomm chairman and CEO Paul Jacobs during his morning keynote Wednesday. "Whichever OS you choose, we're working to optimize software and hardware. We're going to give you the APIs and tools you need to create feature-rich applications." Nor is Qualcomm abandoning its feature phone roots--the evolving Brew MP platform promises to transform Brew into an operating system capable of delivering smartphone-quality application experiences across mass-market handsets, enabling developers to leverage advanced capabilities like touchscreens, rich multimedia, window management and open platform extensibility. Emerging markets are central to Qualcomm's vision: According to Jacobs, developing nations will account for 50 percent of all new 3G devices sold in 2011, and on Wednesday, the company announced a partnership with Chinese infotainment web portal SINA to launch a new Brew MP applications and services storefront targeting Chinese mobile subscribers. "We're uniquely positioned to create low-cost smartphones for the masses," Jacobs said. "We think [the Brew MP] platform represents the largest developer opportunity out there in terms of scale and consumer reach."

But what about what Qualcomm's developer partners and operator allies think? The jury's still out on the development community, but U.S. carriers remain committed to Brew--albeit with some reservations. Citing consistent declines in Brew application revenues since the third quarter of 2007 (not coincidentally corresponding with the introduction of Apple's first-generation iPhone), Verizon Wireless chief marketing officer John Stratton admitted the operator asked itself some hard questions about its continued relationship with the Brew ecosystem. "Does this [Brew app revenue drop] need to be inevitable, or can we affect it? Is this business worth saving?" Stratton said during his Uplinq keynote Thursday. "We remain committed to the Brew platform. It's a huge addressable opportunity. But we need to work harder to unleash it and turn it into something meaningful."

Verizon Wireless is responding to the challenge with its new Open Catalog initiative, promising Brew developers an enhanced and more simplified channel to market their applications to the operator's 56 million feature phone subscribers. Developed in conjunction with Qualcomm, the Open Catalog effort spans all Verizon Wireless 3G multimedia handsets and Simple Features phones that support Brew, and emphasizes expanded developer control over content pricing and distribution. Brew developers can now offer free applications via the Verizon Wireless deck, incorporating carrier-billed micro-transaction mechanisms like in-app subscription offers and sales of digital goods. Verizon also will integrate Qualcomm's Xiam recommendation engine to improve app discoverability, and in late 2010 plans to introduce a new shopping client preloaded on new Brew devices and boasting a graphically rich user interface. Moreover, Open Catalog will reduce Brew developers' barriers to entry, slashing app certification costs from $500 to $99 and reducing certification turnaround cycles from 12 to 18 days, down from previous estimates of 25 to 30 days.

Stratton reiterated Verizon's doubts about Brew's future during a media Q&A following his Uplinq appearance. "We asked ourselves 'Should we invest in this? We don't know if it makes sense.' But when we looked at the fundamental economics, it's still a good business," he explained. "We believe that by lowering the barriers to entry, we're going to see a proliferation of new applications, and this thing will spread from there. The key is getting the wheel turning and persuading consumers to download more applications, and more free apps--once we get that interaction going, it will keep rolling from there." Fifty-six million Brew-enabled phones is an undoubtedly compelling proposition--and that number doesn't include phones from rivals AT&T (which just announced a series of Brew-based quick messaging phones) and Sprint. But developers also want to create applications that leverage their full creativity, and it's telling that the biggest hit of Uplinq 2010 was Qualcomm's new augmented reality platform--technology optimized for Android, not Brew MP. Feature phones may get smarter, but smartphones will always remain more than a few IQ points ahead of the pack. -Jason 

P.S. Due to the extended Independence Day weekend here in the U.S., FierceMobileContent will not ship on Monday, July 5. Publication will resume Tuesday, July 6.