How can the successful Qualcomm overcome difficulties amid doubts?

In the previous report, we interviewed Qualcomm founder Dr. Irwin Jacobs to restore Qualcomm's development history. According to Dr. Jacobs, Qualcomm's success comes from "sticking to one's beliefs and overcoming difficulties to move forward." In the in-depth communication with Dr. Jacobs and other Qualcomm executives and leaders, we found that this persistence is more of a spiritual motivation, and the core of Qualcomm's success comes from persistent innovation. (Attachment: The growth history of chip giant Qualcomm | Irwin Jacobs' personal account )

From insisting on CDMA to developing a patent licensing model; from a single SoC chip to a mobile platform; from promoting the advancement of smartphones to planning XR (Expanded Reality), the Internet of Things, and 5G. Every decision made by Qualcomm reflects their innovative spirit. These forward-looking layouts have promoted the rapid development of the technology industry, bringing them profits and fame, but also some criticism and doubts. However, this kind of perseverance in the face of doubts is a necessary journey for an internationally renowned company.

In the previous article, we mentioned that Qualcomm became what it is today thanks to its persistence in CDMA, but in fact, this technology is just the tip of the iceberg of Qualcomm's technology pool. According to Pete Lancia, Qualcomm's vice president of marketing, Qualcomm is actually a company that studies the entire basic communication system technology, and all of this was achieved after they invested heavily in research and development.

To date, Qualcomm has invested more than $47 billion in R&D (the same as Xiaomi's current market valuation), and invests nearly 20% of its revenue in R&D each year. This investment ratio is rare even in the high-tech industry, which attaches great importance to R&D. With the support of huge funds and talents, Qualcomm has also created an empire that connects everyone in 30 years.

Sudeepto Roy, Vice President of QTL Engineering Technology at Qualcomm, told the Semiconductor Industry Observer reporter that Qualcomm engineers have always adhered to the mission put forward by the two founders, Dr. Irwin Jacobs and Dr. Andrew Viterbi, that "engineers should be committed to developing end-to-end solutions and providing system-level solutions." Qualcomm now has solutions covering devices, network infrastructure, applications and services.

Sudeepto Roy said that these technologies and products are implemented in fulfilling customers' connectivity needs.

For example, to solve the problem of mobile terminal and network communication, Qualcomm needs to consider three issues: the connection between the terminal and the base station during the communication process, the communication connection during the movement, and the ability to maintain communication wherever the device moves. This prompted them to comprehensively solve problems such as antenna design, radio frequency and heating, and accumulated many key technologies. The Snapdragon series chips and high-speed modems were also produced in the process of solving customer connection problems.

The above mentioned can only achieve long-distance connection. But for customers, the problems they face also include short-distance connections such as WIFI and Bluetooth, so Qualcomm turned to these directions for investment. Of course, for Qualcomm, R&D is not only self-developed, but also through external acquisitions, which is also a way for them to solve problems. Acquiring CSR to obtain Bluetooth-related technologies and products is a typical case.

Under the guidance of the founder's purpose, Qualcomm helps customers achieve their goals while expanding its product line. In this process, Qualcomm is not only committed to improving itself, but also promoting the common development of the industry through its accumulated technical experience, just like the role Qualcomm plays in the 3GPP standards organization.

Lorenzo Casaccia, Vice President of Technical Standards at Qualcomm, said that the status of cellular technology in the field of mobile communications is self-evident, but because different companies have different ideas on technology implementation, in order to regulate the development of the industry, an organization is needed to define some standards, which is the role of 3GPP. From 2G to 4G and the future 5G, the relevant standards involved are finalized by the 3GPP organization. Qualcomm's role in this is to promote the development of the industry together with the members of the organization.

Ke Shiya pointed out that 3GPP has 16 groups, each focusing on different technologies. 3GPP will release new technologies from time to time, just like updating and releasing old technologies like computer operating systems. The source of these technologies is from proposals from various companies.

The process of implementing a standard goes through multiple stages, including concept proposal, discussion and research, standard determination and product manufacturing. Ke Shiya said that Qualcomm has consolidated its foundation and served the industry through this process of continuous proposal, discussion and sharing.

With the support of both technology and standards, Qualcomm has grown into a company with deep technology reserves, rich product lines and a large number of patents. The patent reserves are the pride of middle-aged Qualcomm. According to Sudeepto Roy, Qualcomm has accumulated about 130,000 patents, covering the fields of connection, imaging, radio frequency, power supply, software, security and multimedia. By cooperating with more than 300 partners, Qualcomm shares its technology with the industry to promote industrial progress. Since 1990, a total of 10 billion devices have been granted patent licenses by Qualcomm.

With the support of Qualcomm, the rapid development and progress of industries such as smartphones is obvious to all, and Qualcomm has also received due rewards.

But Pete Lancia emphasized that Qualcomm's success is built on the success of the entire industry ecosystem. Only by working closely with the entire industry ecosystem and making full use of its technology can Qualcomm achieve success in the entire industry.

Companies, like people, will always experience some obstacles in the process of growth, but this is not necessarily a bad thing. Companies, like people, will only cultivate the team's adaptability and forward-looking thinking after experiencing these, and gather all the strength to deal with the unknowns ahead. Qualcomm is the same. Relying on its product and patent technology advantages, Qualcomm made a lot of money in the smartphone wave from 2007 to 2015, with revenue and profits soaring year after year, which seems to have paralyzed their competitive awareness. Therefore, when faced with multiple attacks such as weak smartphone growth, rapid changes in the terminal market, and rapid growth of competitors, Qualcomm may be a little overwhelmed at first.

But more than 30 years of accumulation have enabled them to react immediately. By accelerating 5G research and development, promoting the development of IoT chips, getting involved in automotive electronics and acquiring NXP, Qualcomm has already begun to gain a firm foothold before the new trend. Now, the biggest problem for them is actually the dispute between Apple and them.

The relevant reports and causes and consequences of Apple's lawsuit have been described in detail online, so I will not elaborate on it here. But from Qualcomm's perspective, this is "Apple's deliberate attempt to confuse the public." Donald Rosenberg, executive vice president and general counsel of Qualcomm, told reporters: Apple's lawsuit against Qualcomm is actually intended to devalue Qualcomm's intellectual property and patented technology.

He said that before the iPhone came out, Qualcomm had signed relevant agreements with Apple manufacturers such as Foxconn, which used Qualcomm's technology to produce mobile phones and paid a certain amount of patent fees. But this year, Apple instigated these manufacturers to refuse to pay Qualcomm the patent fees they deserved. This is a harm to companies like Qualcomm that respect intellectual property rights, the patent system and the value of inventions.

Donald Rosenberg pointed out that Qualcomm respects those companies and regions that focus on increasing the value of intellectual property and vigorously encourage innovation. For example, the communication with Chinese companies on patent issues has developed smoothly, but it will never approve of Apple's "unreasonable" approach.

Although Qualcomm's patent charging model seems to some observers like sitting back and enjoying the fruits of their labor, as mentioned above, all of this is achieved with Qualcomm's huge investment in research and development. In addition, the changes brought about by Qualcomm's innovative patents are unprecedented. There is no need to elaborate on CDMA, so let's take a look at how Qualcomm's other patents have affected the world.

Roger Martin, senior vice president and chief intellectual property strategist of Qualcomm, told reporters that Qualcomm has always had a perceptual and intuitive understanding of innovation. This system-based innovation has made them a forward-looking innovator. For example, the AGPS (Assisted Geographic Positioning System) used by us to collect location information was invented by Qualcomm in 1998; the automatic screen lock when the phone is put into the pocket is also an innovation of Qualcomm; even the flight mode is a masterpiece of Qualcomm. Other applications such as the App Store and large-screen touch-screen mobile phones can all be found in Qualcomm's previous patents and products.

Roger Martin said that Qualcomm has spent a lot of money and energy on innovation, helping the ecosystem solve many problems in the industry chain. While the number of patents has increased at an annual rate of 32%, Qualcomm is still charging patent fees at the price of 20 years ago. Perhaps this is one of the reasons why Qualcomm has been trusted by its peers for so many years.

Back to the patent dispute with Apple. At the beginning of this year, Apple said in a statement: Qualcomm, as one of the many developers of mobile baseband chip standards, has insisted on charging Apple high patent fees for many years, and the fees it charges are five times that of other developers.

In the editor's opinion, these explanations from Apple are untenable. As mentioned earlier, these patents were developed by Qualcomm at a high R&D cost. In addition, according to Qualcomm's patent licensing model, it is understandable to charge reasonable patent fees based on the value provided by its own patent technology to Apple products. And from Apple's subsequent self-developed GPU, Imagination, rumored self-developed power management chips, and Dialog's products, it seems that although they did not violate regulations or laws in their treatment of suppliers, they always had the intention of bullying customers.

One thing is certain, Qualcomm will continue to stick to the patent licensing model that made it a success. As Qualcomm founder Irwin Jacobs said, Qualcomm 's patent licensing model allows everyone to enjoy more inventions at a lower price, helping companies to succeed quickly and the industry to grow rapidly. Ultimately, the industry, the market and consumers benefit, so this model has been proven to be successful. There is no reason to give up.

Irwin Jacobs emphasized that Qualcomm's success today is not only due to luck, but also to its forward-looking planning of technology and business models. Of course, it is also very important to make adjustments at any time according to actual conditions. The key point is to keep innovating and to innovate without any effort.

The editor believes that Qualcomm's senior management team should carefully consider Mr. Jacob's remarks.

In the next article of Qualcomm's trip to the United States, I will provide some in-depth interpretation of Qualcomm's future layout. Welcome to follow. (Text/Li Shoupeng)

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