FEATURE: Qualcomm's New Generation

Instream Partners' Dave Mock discusses the new challenges faced by Qualcomm.

The company that has arguably brought the most turmoil to the wireless industry over the last few decades is growing up. Recently, Qualcomm formally transitioned the role of CEO from founder Irwin Jacobs to his son Paul. The changeover also marks 20 years since the company was founded in an area that is now often called "Wireless Valley" in the northern end of San Diego.

In 1985, Irwin Jacobs formed Qualcomm with six others that just wanted to keep involved with cutting edge technology in communications, mostly within defense contracts and government work. But the company found the commercial cellular market as a prime opportunity to apply some novel developments -- even with alternate digital solutions already under development and approved in standards bodies.

In 1989, Qualcomm initiated an aggressive plan to pitch CDMA as a superior alternative to methods of digital time division, an effort that earned plenty of ire in the industry. Their success in making CDMA a major part wireless communications today has helped transform a sparsely developed area into a regional mecca for all companies serious about advanced wireless technology. Globally however, the presence of CDMA as an alternative technology platform for services has drawn a line between some suppliers and customers that has been hard to erase.

Going forward for the next 20 years, Qualcomm and their peers face a very different market and a different set of consumer needs. A cellular phone is no longer just that -- it is often a multifunctional mobile communicator that means vastly different things to different users. The challenge facing the industry in the coming decades is to provide products along a wide scale of consumer and business needs -- everything from broadband wireless data for power business users to media capable communicators that appeal to younger generations. And greater success would come if this happens across technology lines.

It's Not About Voice Anymore

Paul Jacobs succeeds his father at an important juncture in the wireless industry -- broadband wireless data services are reaching into the mainstream and feature-rich applications are showing serious traction for carriers. Winning over carriers and device manufacturers is no longer just about voice quality and capacity, it's about a diverse feature set of technologies capable of supporting a wide range of media and functions. Whereas Irwin Jacobs had to convince carriers that their technology could handle voice calls more efficiently, Paul Jacobs will need to convince service providers that their technology is the best platform for a diverse set of requirements from image capture to media streaming to location functions.

To meet this new challenge, Qualcomm is once again expanding at a furious clip, investing heavily in the development of software and silicon in many regions around the world. The company is also focusing significant attention on partnerships and strategic acquisitions to move forward into the new age of wireless media. As it has in the past, the company is placing large bets on what it believes will be significant segments of the wireless market such as multicast mobile media and applications.

While the core of Qualcomm's operations will remain their chipsets and licensing business, the future of the company is heavily tied to the success of other initiatives such as BREW and MediaFLO. Both of these business lines are long-term propositions and each has required and will continue to require significant investments for years.

The BREW solution for instance has performed better than many thought, even though the direct benefits to the company have been minimal. It has provided indirect benefits to Qualcomm however while at the same time fostering an entire ecosystem centered on the rapid proliferation of mobile applications. The new feature coming into BREW that allows customization of the user interface, called uiOne, shows a lot of promise as well. The problem remains though that BREW support still comes principally from CDMA carriers and much of what the company enables still only ends up with a small portion of the global consumer base.

Crossing Over

So with as much effort that has been made towards back-end convergence, the global wireless market is still drawn largely along technology lines. The divisions along technology platforms have also contributed to fragmentation in the application space. As such, much of Europe and other regions still have not seen applications enabled by BREW. And while BREW is technically capable of supporting Java apps, few have made their way onto the platform. Qualcomm would obviously like to see this change but a lot of things have to happen outside of just making the technology compliant. More importantly, many developers would like to see this change to help simplify efforts in bringing new applications to market.

Under the new leadership of Paul Jacobs, Qualcomm is well positioned to continue advancing device and network capabilities across many technologies. But the younger Jacob's ultimate legacy resides not simply in perpetuating CDMA and its benefits. He has the foresight to grow efforts in their Internet services division to make it easier for application developers, publishers, media organizations and content aggregators to mobilize whatever consumers' desire. Yet the longer the industry sits divided along old lines, the slower solutions roll out to billions of eager consumers. And this is one wall that is slow to come down.

Dave Mock is author of The Qualcomm Equation and Vice President of Instream Partners. Mock is one of many industry-leading speakers at wVoIP 2005, an executive summit dedicated to the convergence of wireless and VoIP. To learn more about wVoIP 2005 visit www.wvoip.com.