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Quick takeaways
- Qualcomm pioneers CDMA technology, a superior digital cellular technology that greatly improves network capacity and data speeds.
- Qualcomm develops a mobile satellite network to connect commercial semi trucks for OmniNet, solidifying their expertise in the wireless industry.
- Qualcomm merges with OmniNet, raises funding, and offers a full stack solution to customers, becoming a dominant force in the US and international markets.
- Qualcomm focuses solely on semiconductor design and licensing, developing the Snapdragon line of high-end Android chips.
- Qualcomm's acquisition of Nuvia signals their entry into the laptop CPU and system-on-a-chip market, aiming to match Apple's performance and expand their presence beyond smartphones.
Deep dives
The Invention of Spread Spectrum Technology
Erwin Jacobs and his team at Linkabit develop and patent the concept of spread spectrum technology, which allows for more efficient use of bandwidth in communication channels.
Founding of Qualcomm and CDMA Technology
In 1985, Erwin Jacobs, along with Andy Viterbi and other engineers, found Qualcomm with the goal of bringing digital technology to cellular networks. They invent code division multiple access (CDMA), a method that allows multiple conversations to share the same channels, maximizing spectrum efficiency.
Consulting Work and Satellite Network
Before entering the wireless industry, Qualcomm starts by doing consulting work and working on a satellite communications project for Walmart. They also develop video scrambling systems for pay TV on cable systems.
Mobile Satellite Network for OmniNet
Qualcomm develops a mobile satellite network to connect commercial semi trucks for OmniNet, with Walmart being one of their first customers. This further expands their relationship with Walmart and solidifies their expertise in the wireless industry.
The Invention of CDMA Technology and Qualcomm's Early Success
Qualcomm pioneers CDMA technology, a superior digital cellular technology that greatly improves network capacity and data speeds. They secure patents for CDMA, paving the way for their future success. The OmniTracks product, based on CDMA, generates significant revenue for Qualcomm in its first year.
Qualcomm's Strategic Moves and the Adoption of CDMA as a 2G Standard
Qualcomm merges with OmniNet, raises funding, and brings the OmniTracks product to market. They offer a full stack solution to customers, allowing them to operate the technology themselves. CDMA is adopted as a 2G standard, providing Qualcomm with a dominant market share in the US and internationally.
Qualcomm's Shift to Semiconductor Business and the Rise of Snapdragon
Qualcomm sells its base station infrastructure business and handset business, focusing solely on semiconductor design and licensing. They develop the Snapdragon line of system-on-a-chip solutions, becoming a leading supplier of high-end Android chips.
The Apple Lawsuit and Continued Challenges for Qualcomm
Qualcomm faces legal challenges from Apple and the US Federal Trade Commission, alleging antitrust practices and excessive licensing fees. The lawsuits result in a settlement and Apple renews their partnership with Qualcomm for cellular modems. Qualcomm faces additional challenges in the market and regulatory environment, but remains a dominant force in the semiconductor industry.
Qualcomm's Evolution and Role in the 5G Era
Qualcomm, a leader in wireless technology, has played a crucial role in the development and adoption of 5G. With the industry's decision to include additional spectrum areas, Qualcomm's RF FE business, which focuses on adjusting to different flavors of 5G, becomes essential. Despite settling a lawsuit with Apple, Qualcomm continues to provide cellular modems for iPhones while working on their own in-house modems for future devices. The company's acquisition of Nuvia, founded by former Apple Silicon team members, signals their entry into the laptop CPU and system-on-a-chip market. Qualcomm aims to leverage custom-designed chips to match Apple's performance and expand their presence beyond smartphones.
Qualcomm's Bull and Bear Cases
Qualcomm's bull case relies on their growth in automotive, IoT, and the intelligent connected edge. These areas present a potential $100 billion opportunity and enable Qualcomm to differentiate themselves in the market. Additionally, their licensing business provides predictable high-margin revenue, fueling R&D efforts. However, competition from companies like Mediatek threatens Qualcomm's market position, especially in the low-end smartphone market. Lawsuits, historical failures outside their core competency, and potential backlash from customers challenging Qualcomm's monopoly on patents are also concerns. The company's future success hinges on their ability to navigate these challenges and capitalize on emerging technologies.
11.
The School of Hotel Management - The American Pioneer of Wireless and Communications Industry
2min
Qualcomm, or “Quality Communications” — despite being one of the largest technology companies in the world, few people know the absolutely amazing technological and business history behind it. Seriously, this story is on par with Nvidia, TSMC and all the great semiconductor giants. Without this single fabless company based in San Diego, there’s almost no chance you’d be consuming this episode on whatever device you’re currently listening on — a fact that enables them to earn an incredible estimated $20 for every new phone sold in the world. We dive into this story live at the perfect venue: our first-ever European live show at Solana’s Breakpoint conference in beautiful Lisbon, Portugal!
If you want more Acquired, you can follow our public LP Show feed here in the podcast player of your choice (including Spotify!).
Links:
- The Qualcomm Equation
- Principles of Communications Engineering by Irwin Jacobs and John Wozencraft
- Episode sources
Sponsors:
Statsig: https://bit.ly/acquiredstatsig24
Vanta: https://bit.ly/acquiredvanta
Crusoe: https://bit.ly/acquiredcrusoe
Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.
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