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The Plain View
Earlier this summer, I got a pitch from Qualcomm. The name is a familiar one in the tech world, and indeed the company is important, but most people have only a fuzzy idea of what it does. Something about chips and wireless, and they’re always in some courtroom suing somebody or getting sued. Let me dispel the mystery: Qualcomm creates and patents the technology that powers critical parts of mobile devices. It designed the Snapdragon chipset that is the core of many phones. Also, because the company owns critical intellectual property, it’s just about impossible to make a cell phone without paying Qualcomm, whether you use their chips or not. If you try it, your own cell phone better have lawyers on speed dial. Qualcomm has had pushback: For years, Apple contended in a long court battle over the scope of Qualcomm’s IP that it shouldn’t have to pay the company if it didn’t use its chips, and the Federal Trade Commission pursued an antitrust suit against Qualcomm, charging that its dominance was anticompetitive. But recently, Apple settled and paid up its back fees, and an appeals court ruled that Qualcomm wasn’t breaking the law.
Anyway, to help celebrate Qualcomm’s 35th anniversary, the company offered me an interview with its founder, Irwin Jacobs.
Jacobs is an industry legend, winner of the coveted Marconi prize, and a 2008 recipient of the Silicon Valley Visionary Award, a distinction made perhaps less prestigious because I was a fellow honoree that year. When I spoke to him earlier in the summer, he was an amiable presence, but you don’t build a company on geniality, so it’s fair to assume he is a killer. Jacobs was a UC San Diego professor who, with some friends, founded a company called Linkabit, then sold it in 1985. Jacobs intended to retire, but his friends convinced him to cofound another company focused on wireless. “Although we didn’t have a product in mind, didn't have a business plan, no spreadsheet, something would come up that would keep us interested,” he says—with ridiculous modesty, considering the company is now valued at $134 billion. “So I assured my wife that perhaps over the years, we’d get to 100 employees.”
At the time, the existing contenders for a wireless standard had limits on how many conversations they could handle, and Jacobs was considering a better alternative called Code Division Multiple Access, or CDMA. It was a concept whose roots went back to 1940, when the actress Hedy Lamarr and a colleague pondered the idea of using multiple frequencies to send a single message. One day, on a ride down Oceanside Drive from Los Angeles to his San Diego home, Jacobs realized that CDMA might be a superior mobile wireless standard, with much more potential capacity. He quickly put his teams to work applying the concepts to actual technology, and, of course, patenting their innovations.
At the time, of course, nobody really understood that a wireless standard would become a stratum for the entire modern world. It would be like inventing food. As Jacobs tells it, he outlined his standard at a meeting of the major wireless communications industry group, the CTIA. “There were about, I don't know, 100 people,” he says “We did a slide show—why we thought we'd solved the problems, where it was advantageous. Nobody found an error in it. But nobody jumped on board, either.”
The next few years became known as the “Holy Wars of Wireless,” as Jacobs and his team tried to get CDMA accepted as viable tech inside wireless devices. To help prove its superiority, Qualcomm had to develop chips and build a commercial phone and base station.
“To do that, obviously, it's going to take a lot of money and time,” he says. “Some of the operators [like ATT] were convinced that this was worth pursuing, so I asked them to convince the manufacturers to take a license from us, and came up with this approach: You'll pay us an upfront fee, which we'll use for R&D. Should this ever be commercial, which nobody really thought would probably happen, there'll be a small royalty on each device sold. That's how the licensing aspect actually got set up.”
At first, Qualcomm manufactured its own phone headsets, selling them in Asia. That was around the time it went public in 1991. Eventually, though, it sold off those parts of the business and became strictly an under-the-hood company.
This decision wound up having implications in the current competition between the US and China, particularly with the telecom giant Huawei. Because of security concerns, the US is currently doing all it can to stifle adoption of Huawei’s products. All of this might be easier if there were an American equivalent to Huawei—a company working to pioneer the infrastructure of the next generation of wireless that also sold products directly to people. (In this case, that next generation is the much anticipated 5G standard.) Why didn’t Qualcomm pursue that?
“We did think about that, but we wanted CDMA to go worldwide,” says Jacobs. He says that Qualcomm was still fighting its Holy War, trying to get CDMA accepted everywhere. Being a competitor to carriers would impede that. In 1993, the strategy paid off, when CDMA became the wireless standard. Jacobs says he thought that other US companies, like Motorola, would stay in the business. But one by one, they either shut down or sold out to foreign companies. Qualcomm, by selling companies a comprehensive chipset that could power a cellphone, actually made it easier for new Chinese competitors to hit the market, because they had the tools to create a product instantly. “Unfortunately,” he says, “nobody in the US has really run with it" and done the same thing.
Another complicating factor is that governments in China and Europe have had industrial aid policies that helped their telecom firms in a way that the US has not. “Our government has not provided R&D support or other support that Huawei and ZTE (another successful Chinese firm) managed to get from their own government,” Jacobs says.
As you might expect, Jacobs, who retired in 2005, dismisses the accusation that Qualcomm’s license fees are excessive. In fact, he says they’ve remained stable even as Qualcomm has provided more technology, and that Qualcomm doesn’t just monetize its existing patents, but depends on a continuing stream of new research—as the company has done in the last decade with the new 5G standard. “Unless you keep running hard, people go right by you,” he says. “And too many of our companies have not made that investment in R&D and kept running hard.”
Jacobs had been slated to testify at the Apple trial before the companies settled. I asked him what he would have tried to get across if had taken the stand.
“That we’ve had a tremendous impact,” he says, “Steve Jobs came up with a wonderful interface that allowed people to make use of all of these capabilities that we've been providing. I remember back in about 2000 when I gave a talk and said we're working on putting a camera on the phone. And everybody's reaction was, ‘Why would I ever want a camera on my phone?’”
Time Travel
Though it seems like wireless technology has been here forever, it’s a relatively recent phenomenon. Look at how gee-whiz I was in 2001, when describing to the readers of Newsweek what was just around the corner. Got it all correct, except that it’s still hard to print a photo from a phone. I’m especially proud that I referred to the “sometimes cruel terrain of the 21st century.” I had no idea.
There is a lot to look forward to when the wireless experience arrives en toto. And come it will: The future is only a few years behind schedule. In fact, components of the untethered world have been quietly appearing, piece by piece. Wireless broadband networks are already in place so that patrons of Starbucks and airport road warriors can access the Internet while they sip or stew. Satellite-connected cars are scolding drivers for missing a left turn. Millions of families have resolved the nightly fights for the broadband connection with wireless home networks like Apple’s popular $300 AirPort Base Station. Now they can stroll around the house with laptops, lounge on decks and in living rooms, while devouring the Internet at breakneck speed. And families everywhere have learned that mobile phones or two-way pagers are great stress reducers—a kid’s quick "I’m OK" message tops a Xanax any time.
This is just a taste of what will happen when we become cybernomads, roaming the sometimes cruel terrain of the 21st century with wireless devices as our constant companions, and not missing a trick. Many of the frustrations of modern life will be resolved, like getting a printer to work with your camera, or making sure that the person you’re trying to urgently reach is indeed within your reach. Stray moments of downtime—waiting in line for your latte or riding the subway—will soon be opportunities to catch up on e-mail, update your stock portfolio, or join a foursome for bridge. "With a wireless device you can do these things because it’s on your person," says Joe Sipher, a vice president of PDA-maker Handspring. Do you want to do those things? Those developing the technologies are utterly convinced you will. "Remember a few years ago when people asked whether mobile phones will take off, because you can get what you want from land-based phones? Now you can’t handle your life without one," says Maria Khorsand, president of Ericsson Technology Licensing.
Ask Me One Thing
A reader named Thread writes, “I’m curious what your morning routine is. When do you usually wake up, are you an early riser or a night owl? Do you use any technology to help automate your beginning hours?”
I can verify that Thread is really curious about this subject. He has contacted me via my website, on LinkedIn, on Twitter, and even via my wife’s website, all asking about my morning routine. Now that the question has come through the official ASK LEVY channel, I feel compelled to answer it. Maybe if the rest of you had been asking me more questions, better questions, I could have ignored Thread a little longer. Because, let me confess, I am a little nervous at the persistence of this query. Thread is driven to know. I have been asking myself, what would I be giving away by sharing my personal habits upon arising? Anyway, caution to the wind. Thread, here’s your answer. I get up early. Sometimes at 6 am. I am not methodical in my writing habits, and I do not automate. At a certain point, after a protein-rich breakfast of egg whites and chili, I chain myself to a desk and hope that my meanderings on the internet will stop long enough for me to do some work. Satisfied? Don’t hurt me.
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