Wingcast Idea Grounded

Wingcast, a joint venture between Ford and QUALCOMM , has had its wings clipped before even really getting off the ground.

The two companies Monday said they would dissolve the San Diego-based partnership to whose goal was to provide telematics in some model year 2003 vehicles and compete with General Motors’ OnStar service as the premiere Internet-in-your-car system.

“Ford Motor Company is still committed to the objective of providing telematics services in its vehicles, including the use of CDMA technology, but we do not believe it is necessary to have equity interest in a telematics service provider in order to meet that goal,” said Ford Motor Co. director of Wireless Mobility Douglas R. VanDagens.

The partnership was forged in October 2000 and was 85 percent owned by Ford and 15 percent by QUALCOMM.

Wingcast develops mobile wireless information services, also known as telematics, that bring voice, entertainment, Internet access, and safety services to cars and trucks. In other words, telematics applications provide that computer-generated voice that out of the blue as you’re driving down the freeway says you need brake fluid and that a service station is two miles west at the next exit.

Telematics products can be accessed by a hands-free, voice-activated interface built into the vehicle, in addition to other handheld devices outside the vehicle that can monitor the condition of the car.

Ford Motor Company has been the sole funding contributor of Wingcast since May 2001. Prior to that date, QUALCOMM had invested $25 million in exchange for an approximate 15 percent equity stake in Wingcast. QUALCOMM had previously recorded approximately $14 million in losses related to its equity interest in Wingcast, reducing the investment to approximately $11 million.

Because of its losses, QUALCOMM said it expects to write off up to approximately $11 million on its remaining investment in the third fiscal quarter of this year.

The deal also affects Sun Microsystems , Hewlett-Packard and Oracle , which made early deals with Wingcast to be the backbone of its delivery network, OEM marketing and database services respectively.

And even though research firm IDC estimates that the telematics market to blossom to $42 billion by 2010 from a $3 billion industry in 2002, there is still a long way to go between then and now, but neither Ford or QUALCOMM seems ready to throw in the towel just yet.

“QUALCOMM is continuing to work with CDMA licensees, carriers and automobile manufacturers on telematics solutions that will leverage advanced wireless data services being deployed today,” said QUALCOMM Wireless and Internet Group president Dr. Paul E. Jacobs. QUALCOMM will continue to benefit from its license to use some of the intellectual property developed by Wingcast.”