As Wireless Industry Moves From Voice to Data, Qualcomm’s Top Execs Discuss Their ‘Big Bets’ on Next-Generation Technologies

12/18/09Follow @bvbigelow

Qualcomm CEO Paul Jacobs seemed upbeat, at times even jocular, during a town hall forum at the wireless giant’s corporate headquarters Wednesday night. Perhaps his good humor stemmed from the kickoff question from moderator Brian Modoff, the Deutsche Bank Securities analyst, who asked Jacobs how he views Qualcomm now that the company has entered a relatively peaceful era following years of intense litigation against Broadcom, Nokia, and others.

“I look forward to hanging out with engineers more and the lawyers less,” Jacobs said.

Jacobs, who has a doctorate in electrical engineering from UC Berkeley, talked like he’s already hanging with the engineers. He highlighted Qualcomm’s plans in China, the convergence of smartphones and “smartbook” computers, networks getting to very high data rates, and the “big bets” Qualcomm has placed on future technologies. Jacobs said those big bets include Snapdragon, the family of ARM-based (Advanced RISC Machine) microprocessors that Qualcomm developed for use in smartphones and other mobile computing devices.

Also on stage was Len Lauer, the company’s chief operating officer, and Steve Mollenkopf, president of QCT (Qualcomm CDMA Technologies), which ranks as the world’s largest provider of wireless chipsets and software solutions. As the wireless industry moves increasingly from voice to data, Lauer said Qualcomm is pursuing new business opportunities in social networking, Internet video, games, mobile commerce, and machine-to-machine communications.

One key to Qualcomm’s ability to differentiate itself at a time of anticipated consolidations, Mollenkopf said, is its ability to be a wireless systems provider. Another key trend that provides Qualcomm the opportunity to differentiate itself, Mollenkopf said, is the increasing integration of digital media and other consumer electronics features in cellular phones.

The Qualcomm executives said they expect 4G wireless technologies to take a number of years to gain market penetration. After the requisite data cards become available, which is expected next year, 4G handsets will become available in 2011, and it will likely take six to eight years for sales of 4G phones to reach 50 million units.

Meanwhile, Qualcomm plans to emphasize what it calls the Snapdragon “platform” in the development of next-generation smart phones and mobile devices. “We wanted to make sure that high-end phones, especially high-end smart phones do what we want because we want to control our own destiny,” Mollenkopf said. “It’s an opportunity for us to provide technology that’s really going to stimulate the industry… and we really expect to see changes in terms of traction and customer uptake.”

The Qualcomm executives also addressed a variety of other matters:

—When asked to identify the next hurdle that needs to be overcome in mobile health technologies, Jacobs said health insurance reimbursement. He cited the importance of building a foundation so some of these “mhealth” devices can get approval and reimbursement. “There is tremendous interest” in mobile health technologies, Jacobs said, “from policy makers all the way down to entrepreneurs and scientists.

—Lauer, a former COO at Sprint, said Qualcomm anticipates the biggest growth in coming years will occur in wireless data, “driven by the proliferation in social networks, the Facebooks and Twitters. We think there’s a lot that can be done to expand these mobile networks.”

—When asked to identify the key areas that Qualcomm finds important, and which other wireless companies do, Mollenkopf said he views Qualcomm’s “systems on a chip” as a key area of technology companies should be looking at, Mollenkopf returned to the importance of Qualcomm’s systems business. At microcircuitry designs of 28 nanometers and below, Mollenkopf said, “There are a number of opportunities for specialized products. What we want to make sure is that our product is working with the ‘best of breed’ of other products.”

Lauer joined in, saying that “software engineering around the user interface” remains a key area of development for Qualcomm partners, and “a lot of folks in San Diego working on UI [user interfaces] could really help us.”

Jacobs added, “We’ve been working on this vision of the phone as the most-personalized space for communications, computing, and entertainment. We’re happy to help people [i.e other wireless technology developers] interact with the operators and with the manufacturers.” With technology capabilities moving increasingly from mobile phones to mobile devices, Jacobs said such devices are ultimately turning into a kind of electronic “sixth sense” that can provide global satellite positioning, image recognition, and a variety of sensing capabilities. And those are the kind of future technologies that Qualcomm is betting on.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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