The Future of Wireless
A Centerpiece Conversation with Irwin Jacobs, Co-Founder, past CEO, and Board Member; and Paul Jacobs, Chairman and CEO, Qualcomm; hosted by Mark Anderson
MA: Would you mind sharing informal stories about hand-off?
IJ: Paul was the only son with a PhD in engineering.
PJ: Every summer at the company he got to do a different kind of engineering job. By the time he was partway through grad school he’d done everything except IC processing. Irwin was always giving people opportunities to rise to the occasion.
IJ: The decision almost broke up the family. Debate about whether to go academic or go to Qualcomm.
PJ: Wanted to go into industry. Loved to have people using things he’d made.
IJ: Retired in the 80s, but got tired of it and started Qualcomm. Knew wireless and digital would be of interest. Within 2-3 months came up with idea of using CDMA for wireless. At Linkabit, developed the first TDMA phone. Realized that CDMA would allow for higher spectral efficiency and efficiency of channels. It was a battle all the way to get that accepted, but now all 3G is CDMA.
PJ: If you think about the cost of computation, as it came down, they were able to provide more computation to more people.
IJ: Many people thought it was too complicated, but we saw it would work on chip.
PJ: Elected in March, took over in July without a tie. Saw people take off their ties all the way around the table at the first board meeting. Literally.
Big window for Qualcomm as CEO: Wireless internet, phone capability integration. Looked at the system from an app standpoint rather than looking at it from a radio standpoint. It became about all the different kinds of things you could put into the phone.
Wanted to make the company seen as wireless tech company rather than a CDMA tech. Went out and bought a new company.
MA: Pure IP business plan is hallmark of what you’ve both achieved. You seemed to very early understand that the business is in IP.
IJ: Licensing business came up out of necessity. Carriers were interested because CDMA used much more efficient spectrum. Used payment up front to do R&D and charged royalty on every phone that used it. Were selling chips, phones, and software, but realized the chip business would let them send their technology out to the market early on, so they dropped the phones. Didn’t have the ability to compete at the level of Samsung.
Now the IP strategy is their strategy. Working on screen IP, but don’t intend to manufacture, rather to sell IP.
IJ: Started working very early on how to build chip that everyone can use, which is now Snapdragon.
MA: 5 year plan for Qualcomm?
PJ: Smartphones, emerging markets will continue to take off, so they’ll focus on bringing prices down. In the longer term, they’ve been working with Microsoft on Windows RT for small, light devices. Microsoft has done a great job on the details. Computing will continue on, with ARM-based servers, etc.
Next big thing: Trying to drive massive change to the way that the operating system is laid out. Want to have 1 cell site per phone. You can’t get 1000x revenue, so you have to go after the cost size.
Making cell stations cheaper than the phone, plugging them into the wall or your ethernet. You’ll still have macro umbrella coverage, but these will be in everybody’s house. They leak outdoors, but they don’t cover floor to floor in a building.
IJ: With high data rates, you need more power if the station is further away, so these things will cut power you need to know.
PJ: Also looking at sensors you might wear on your body, etc that can interact with your device. Such as glucose monitors.
MA: Bandwidth. Are there radiation issues with this?
PJ: It’s safer because you actually use less radioation.
3G and wifi are complementary. Work cooperatively and license bands. Certain things can go faster, but one is not going to eliminate the other.
IJ: A few years ago, I’d taken heat for saying there’s not a good business model for wifi.
MA: Bandwidth: How does this scale up? In the US, we’re in a fairly advanced situation thanks to LTE.
PJ: We were global leaders even in CDMA. We couldn’t break that message out to mainstream though. Everyone thought that we were behind.
IJ: With 3G, we were ahead.
PJ: LTE from an efficiency standpoint is the same as CDMA.
IJ: The multi-carrier is going to be around.
MA: We’re getting more bandwidth from our handsets than from our wired lines.
PJ: Wireline bandwidth will still be important. Wireless and wire line will synergize going into the future for the backhaul. You’ve gotta have both.
MA: It seems like whether you use whatever, we’re receiving and using ever higher amounts of broadband, coming from the wireless world rather than the wired world.
PJ: There are more wireless connections in the world than there are wired. Half of world subscriptions for LTE are from emerging markets. That’s just going to grow. They will leapfrog the entire fixed internet era that we went through. They’ll use wireless as backhaul.
MA: Cost basis?
IJ: We have a wireless reach program where we try to distribute social programs around the world. Originally there was a mobile phone service, but now everyone has it, so it’s no longer a sustainable business.
PJ: Solar panel company puts in panels in Africa to help people charge their phones, then they use the extra juice to run lights so they can read at night.
Operators are selling 90% smartphones. 50% of phones in US already are smartphones.
The big issue is emerging markets. At bottom of economic pyramid, a lot of people are building refurbs. We’ll break the $100 floor by the end of this year, and then it’s just a matter of ratcheting it down further. The display is actually the most expensive part.
800-calls for data: You’ll be able to visit govt websites without paying anything for data.
IJ: This is the decade education will finally begin to make good use of tech. That will happen in developing countries and countries will subsidize phones and learning.
PJ: Software for P2P is there today. We’re working on the hardware. Augmenting LTE to have beacons that highlight who you are, your phone will detect these things from a sleep mode and will only wake up when it sees something you’re interested in. Your phone knows everything around you.
IJ: Think about the privacy and security issues.
MA: That again redefines what is the telephone.