Qualcomm, Quality Communications is a US-based company working in the field of wireless communication. Qualcomm was started in 1985 by Irwin M Jacobs with six other founders. Irwin M. Jacobs was a well-educated man. He had completed his bachelor of science, and master’s of science in technical fields like computer science and electrical engineering from renowned universities. Jacobs completed his doctorate at MIT. He worked as an assistant professor, associate professor as well as a full-fledged ‘professor’. At the age of 35, Jacobs co-founded Linkabit Corporation in 1968 which worked for satellite encryption devices.
In 1985 at the age of 52, he co-founded Qualcomm. Initially, at the start, Qualcomm manufactured satellite communication systems. He invested all the profit in research and development. He was well aware of the value and importance of research as he was himself a researcher and professor. Irwin Jacobs researched the field of communication and was certain that this will further be their focus area.
In those days Time Division Multiple Access (TDMA) was common for cellular communication but Qualcomm believed that CDMA is a Code Division Multiple Access which is going to be the future globally, so he started his research on CDMA. He was spending a lot of money on research and development due to which he had to face losses. He raised 68 million dollars through their IPO. After the successful research on CDMA, he proved that CDMA is far better than TDMA. In 1995, When the company started working on CDMA, he sold 11.5 million shares and raised 486 million dollars. With this money, he started working on CDMA-based phones, base stations, and equipment. Qualcomm successfully entered this field and was able to convince other companies with their research in 2G.
Innovation in 3G and 4G
They continued to serve innovation in 3G and 4G network services. By this time mobile phones were used to serve various daily purposes. With their experience, Qualcomm started working on innovations to outshine other companies in the market. It launched the Snapdragon system on a chip, with the availability of a central processing unit, graphics processing unit, camera support, software as well as semiconductors. In all, they made the brain of a mobile phone and became very successful in this field as well. With time they became very popular and now currently they are working on 5G network services.
They continued to serve innovation in 3G and 4G network services. By this time mobile phones were used to serve various daily purposes. With their experience, Qualcomm started working on innovations to outshine other companies in the market. It launched the Snapdragon system on a chip, with the availability of a central processing unit, graphics processing unit, camera support, software as well as semiconductors. In all, they made the brain of a mobile phone and became very successful in this field as well. With time they became very popular and now currently they are working on 5G network services.
Qualcomm-their business model
It has a market capitalization of more than 100 billion dollars today.
You might be thinking that the Snapdragon processor is the only basis of income for Qualcomm but this is not the truth. Qualcomm business can be divided into three different parts namely QCT, QTLand QSI. QCT is Qualcomm CDMA technologies including CDMA wireless products. While around 60% of the revenue comes from QCT.
QTL that is, Qualcomm technology licensing is just its other part. Around 19% of the revenue comes from licensing their patents. This is one of the most interesting aspects of their business. Many of the research patents about wireless communications are with them as they are more into research and development. So, if any company is working on smart devices they need to get a license from Qualcomm. Although the revenue they earn from this is very less, the profits are however very high.
The high popularity of smartphone devices in the market is the essential requirement of Qualcomm licensing. Other companies like Apple, MediaTek, and Samsung are also manufacturing chips. But there is hardly any competition in QTL. For the requirement of the license, all the companies need to contact Qualcomm.
5G-introduction
In the last few years, Qualcomm has earned 50 billion dollars in profit from licensing alone. They usually serve the company which in turn will take the license also. They even offer some exclusive rights to some companies. All this can be taken into account from 2 aspects: Firstly, It doesn’t let other companies grow up in the market, Secondly, Qualcomm says that they must monetize their license because they spend a lot of money on research and development.
The third part of Qualcomm is QSI, Qualcomm’s strategic initiatives. In this, they usually invest in other tech companies. They earn one percent of the revenue from QSI. For all this, they started Qualcomm Ventures, under which they have invested in more than 140 companies. They have invested in various fields like automotive, internet of things, digital help data centre, etc. Recently Qualcomm ventures invested 730 crores. 5G is about to be launched and Qualcomm is ready with chips for 5G network services.
After the introduction of 5G, Qualcomm will have several other opportunities. With this Qualcomm will enter industries like automotive, smart home, smart city, cameras, and mobile applications. With 4G only mobiles were connected but with the introduction of 5G we will be able to connect not only mobile phones but also all our devices will be interconnected. For the interconnection of all sorts of devices, all we need is chips and wireless communication networks. Qualcomm will provide just that. Qualcomm will be soon an integrated part of our life. It has hired top lawyers because they fear that any company may sue them. They’ve spent a lot of money on legal expenses as well. They are firm in their resolution to achieve this goal.
