What do the top executives at Qualcomm (Nasdaq: QCOM) view as the key developments as mobile communications accelerate with the proliferation of smartphones, tablets, and other wireless devices?
At a town hall forum Thursday night at the wireless giant's San Diego headquarters, Qualcomm Chairman and CEO Paul Jacobs said the mobile experience has gone through a critical change in the transition to 3G. It used to be just about voice communications. Now it is all about data. And going forward, Jacobs said, it's going to be much more about enabling other technologies.
"Now what we see are the chips in phones are going into all these other mobile devices, where all things are connected," he said. In the world Jacobs describes, each of us would move through a world of wireless devices and networks. There could be some places where you could be surrounded by thousands of radios, and your mobile phone "will sense that and allow you to interact."
This means the wireless environment is headed for even greater complexity. Jacobs says the smartphone you carry around is just going to have to deal with a lot more devices that use different technology platforms, different operating systems, different software, and different radios -- including cellular, Wi-Fi, Bluetooth, near-field communication, and satellite-based systems. Qualcomm has even been developing technology that will enable users to move between Western GPS technology and Russia's expanding Glonass system.
In anticipation of this new wireless ecosystem, Qualcomm demonstrated a new proximity-based, peer-to-peer networking technology called FlashLinq several months ago during the wireless industry's Mobile World Congress in Barcelona. FlashLinq is designed to automatically and continuously enable mobile devices to "sense" each other and relay relevant information, based on a user's individual preferences.
"The key is really going to be making all these things simple" for the user, Jacobs said. Power consumption also is important, so the system is designed to exchange data with other devices instead of sending it back through the network. "You want to be able to discover what's around you without burning up your battery, so peer-to-peer is more efficient," Jacobs said.
Qualcomm also unveiled AllJoyn, an open source software technology for enabling developers to create new mobile apps that allow peer-to-peer groups to form to play a multiplayer game or to share information at a conference, and then go their separate ways.
After covering all this in a short overview of the company's technology initiatives, Qualcomm's chairman and CEO was joined on the stage by Steve Mollenkopf, the executive vice president who oversees Qualcomm's chip development, and Matt Grob, the senior vice president for research and development. And if the catch phrase for Jacobs' opening comments was "simplifying complexity," the watchword for Mollenkopf last night was "integration," as the world's biggest maker of mobile chips works to integrate more and more functions in its systems and chipsets.
Most people think of integration as a physical process of adding increased capabilities and functionality into the chip design, Mollenkopf said. What really is happening, though, is integration throughout the "connective tissue" of the entire system. "You need to be good at the graphics, you need to be good at the processor, and you need to be good at the modem," Mollenkopf said. "But being good at all that really only allows you to play."
As the competition intensifies in wireless technology development, Jacobs said the Qualcomm business is going to be increasingly about maximizing functionality through integration, minimizing power consumption, and meeting global demand for ever-lower price points.
Asked if Qualcomm can still operate profitably at the lowest of low-end devices in markets in India and China, Mollenkopf replied, "We've been selling CDMA phones and competing against GSM in India for some time. It taught us how to [go] after very low cost points [with devices priced under $30], but the integration you have to achieve was very high. Now that same technology is being used to bring smartphones down to these same low price points."
John Jackson, a Boston-based analyst with the market research and consulting firm CCS Insight, also asked Grob to discuss his R&D philosophy at Qualcomm. While officially Qualcomm's research and development group has criteria for evaluating various technical innovations, Grob said they don't necessarily adhere to the priorities set by wireless operators and other customers. Every proposal has to have the potential to have a global impact, Grob said.
Jackson also prompted an interesting response from Jacobs when he asked the Qualcomm CEO if he agreed with the pronouncement from Microsoft's former chief software architect, Ray Ozzie, that technology has entered the "post-PC era."
"I think the biggest indication of that is when Microsoft came out at the Consumer Electronics Show and said, 'We're going to port our Windows operating system to mobile,'" Jacobs answered. For the software giant, he explained that the move represents a fundamental shift from developing software for the central processor at the heart of the desktop PC to the Advanced RISC Machine (ARM) chip at the heart of mobile devices. Jacobs later said that he anticipates a "tipping point" when computer makers will switch from CPU-based design to ARM architecture. Jacobs didn't predict when that would happen, but he says that like any tipping point, it will happen "fairly quickly" once it does.
Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at [email protected].
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