Qualcomm Then and Now—Will the Next 25 Be as Innovative as the Last 25?

8/24/10Follow @bvbigelow

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hiring the very best people and investing in the community to ensure a strong supply of talented engineers. And they have a strong suite of intellectual property.

X: What do you see for Qualcomm in the next 25 years?

RR: Qualcomm has to decide if they will stick with radio innovations as their core competency or evolve much more organically, like IBM. The challenge with venturing into newer spaces will be the (cultural) change in the mindsets of the highly talented radio systems folks they have assembled so very, very well over the years.

Boston Xconomist Mark Lowenstein, Managing Director of Mobile Ecosystem, former Vice President of Market Planning and Strategy at Verizon Wireless.

Mark Lowenstein: “Qualcomm has successfully placed its bets across multiple aspects of wireless technology, preventing it from being the “one trick pony” that has been the downfall of other tech firms with shorter life-spans…Qualcomm is to wireless what Intel is to the PC industry.

ML: “[Qualcomm's] key innovations were around spread spectrum technology, which is the foundation behind CDMA, but now also other, related air interfaces. Qualcomm has also put more dollars into pure R&D than nearly any other wireless firm. By acquiring a company called Flarion and through its own R&D, Qualcomm has also pioneered work around OFDM [Orthogonal Frequency Division Multiplexing], which we are seeing in the development of latter day 3G and now 4G technologies. A key aspect of its strategy has been to sell its intellectual property as a royalty, so for the vast majority of phones sold, Qualcomm receives a royalty payment. This aspect of Qualcomm’s strategy has also been controversial, in that the company has been criticized for charging excessively for royalty payments. Also, some of its intellectual property claims have been challenged, and the company has been and continues to be involved in numerous patent disputes.

ML: Over the next 25 years, “more than just about any other ‘pure play’ wireless company, Qualcomm is well-positioned to benefit from the continued growth in wireless. It has patents that will provide it with royalties across most 3G and 4G wireless technology interfaces. In addition to having its finger in multiple ‘pies,’ it continues to develop best-of-breed processors, giving it continual design wins. Qualcomm also has been remarkably prescient in developing chipsets for a large spectrum of devices. For example, its Snapdragon chips are in many of the new Android devices being sold today. The firm has been successful in continuing to attract top engineering talent.

“Qualcomm has also not been afraid to make large bets, to help develop and foster new market opportunities. It made a big bet on BREW, which helped seed the initial market for wireless data. It spent nearly $1 billion on MediaFLO mobile TV. Not one of its major success stories, but it does recognize that high-end multimedia services should not compete with traditional wireless spectrum. It is now making similar bets on machine-to-machine (nPhase) and mobile health.

“As for risks, the competitive playing field has intensified. Qualcomm is already … Next Page »

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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