Why Qualcomm’s Paul Jacobs Will Stifle the Smartwatch He Created
The Toq smartwatch that Qualcomm (NASDAQ:QCOM) unveiled yesterday at its annual Uplinq developers’ conference was a pet project that was conceived and shepherded through development by Paul Jacobs, Qualcomm chairman and CEO.
But at the end of the day, Jacobs told reporters and analysts, that doesn’t mean the San Diego wireless technologies giant he manages will crowd its partners by jumping into the consumer electronics business.
As if to underscore that point, Samsung (one of Qualcomm’s biggest partners) unveiled its Galaxy Gear smartwatch in two places yesterday—at the IFA consumer electronics show in Berlin and at the Korean electronic giant’s Unpacked event in New York City. The timing could be interpreted as a bid to share smartwatch headlines, although some news accounts focused instead on the prospects of a looming smartwatch war, with predictions that Apple, Microsoft, and Google will soon unbutton their own wearable gadgets.
The Toq smartwatch was Qualcomm’s big surprise for an estimated 2,200 attendees who descended on the San Diego Hilton Bayfront Hotel for a developers’ conference that began Tuesday night and ends tomorrow. And Jacobs ensured an enthusiastic response by declaring everyone in the audience (except media and foreign attendees) would get one of the new smartwatches once they become available this fall.
As Jacobs later explained, Qualcomm plans to sell its smartwatch as a limited edition product that is intended chiefly to showcase some innovative technology features: Qualcomm’s low-power Mirasol display screen; Qualcomm’s Wi Power LE technology that re-charges the Toq’s internal battery wirelessly (a single charge lasts three to five days, depending on usage); Bluetooth audio technology that streams “true stereo” premium audio to wireless earpieces; and AllJoyn, Qualcomm’s proximity-based peer-to-peer networking technology.
“We’re trying to make it less about us, and more about what’s feasible,” Jacobs told reporters and analysts during a late-afternoon news conference. “Qualcomm is not going to be a big consumer electronics company.”
Of course, Jacobs conceded that might change if demand for the Toq proves to be huge.
Still, the company’s expects to produce only tens of thousands of units, with Toq sales beginning sometime before Christmas, at a price between $300 and $350 apiece. When asked who is manufacturing the devices, Rob Chandhok, president of Qualcomm’s interactive platform business, answered, “They are being made where you think things are being made.”
The Toq smartwatch is not intended to take the place of a smartphone. In fact, Jacobs described how future mobile customers could use a multitude of wireless sensors and devices to collect data and interact with the physical world, ultimately turning the smartphone into more of a wireless server that would enable users to store relevant mobile data in their own “personal cloud.”
Qualcomm designed the Toq to sync with users’ smartphones, with an always-on display screen that would immediately show text messages, calendar appointments, phone calls, and other notifications sent to the user’s smartphone—sparing users the bother of pulling it out and unlocking it. In other words, people will be compulsively scrolling their smartwatches instead of their smartphones. The Toq is based on Qualcomm’s operating system, and initially will only work with Android-based smartphones, although the company might extend the Toq to connect with iOS-based systems as well.
“Qualcomm Toq is a great example of the convergence of connectivity, context, and control technologies, that all come together to provide us with a digital sixth sense,” Jacobs said during his keynote presentation. “Qualcomm Toq is key to that vision. And of course, we’re only at the beginning of what’s possible.”
So how did this idea for a Qualcomm smartwatch get started?
The Toq was Jacobs’ idea, Chandhok said. “Paul wanted to have something on his wrist that helped him remember things,” he told reporters.
Jacobs later added that as Qualcomm’s chairman and CEO, he doesn’t get to oversee technology development projects. It was “kind of fun” to take on the smartwatch as his own pet project, he said.
Jacobs said the idea for a smartwatch struck him in much the same way that he realized in the late 1990s that mobile technologies were converging to make something like a smartphone inevitable. Jacobs said that epiphany came while he was sitting on a beach in Maui in 1997 or ’98, and he used his PDA to search Alta Vista for the nearest sushi restaurant. He said he realized it would only be a matter of time before those same capabilities would be incorporated into mobile phones.
But at that time, Jacobs added, people were just not ready for a higher plane of existence. Qualcomm tried to develop one of the first smartphones, he said. But in those days, consumers just wanted to use their mobile phones make phone calls.
In those years, Jacobs was the general manager overseeing Qualcomm’s handset manufacturing business (the company sold the business to Kyocera in 1999). He said the challenges of the handset business made him realize that Qualcomm was better situated to act as a technology innovator and catalyst for the entire wireless industry. “It was better for us to be an enabling technology manufacturer than to try to make phones,” said Jacobs. Handset design, he added, “is kind of a fashion industry” that requires a fundamentally different set of skills.
Qualcomm’s strength lies is in the complexities of wireless chip design, particularly in developing the hardware and software needed to integrate scores of different radio bands, encoding standards, and wireless carrier configurations.
If you read between the lines, Qualcomm’s chairman and CEO was providing some good reasons why the wireless technology giant won’t be expanding its smartwatch business much beyond its limited edition. Qualcomm doesn’t want to make smartwatches. It wants to supply its technology and components so the rest of the world can build their own smartwatches.
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