technology gave Qualcomm many advantages: revenues from its intellectual property, development of new and enhanced products ahead of the curve (time advantage), and of course the ability to leverage their current customers for future products. We are already passing the first phase of wireless products (where CDMA core technology can give great value). The next phase of wireless product development will be focused more on solutions and applications. Once again, Qualcomm has done an excellent job of acquiring new technology, including Snaptrack in 2000, LCD display technology, software, the Iridigm acquisition in 2004, and they have integrated these technologies to create a single chip solution for mobile and laptop devices. The company also hires new talent, which helps them to
develop their own microprocessor (Snapdragon) to compete with Intel. But Qualcomm’s future revenue will be impacted as the device market matures and the unit price gets lower.
HP: Qualcomm’s future will have more challenges in the next 25 years then the past 25 years. The company will almost certainly be there 25 years from now. However, they need to show sustainable growth in revenues, and this means they need to continue to innovate. Qualcomm has tried a few big ideas that seem to make sense: FloTV, if it is successful, is a great business since the business model is based on subscriptions and the revenue per user will increase every year (we love this model). But FloTV is losing money now. Brew is another platform where
Qualcomm wants to share revenues (with developers like Apple) on mobile applications; the progress in Brew is very limited and it is losing its value as more and more smart phone developments bypass this platform. To have sustainable revenue growth, Qualcomm needs to
come up with new products that can add significant revenue in the next few years and these products need to be in the pipeline now (to contribute to the current revenue). However, it looks like none of them are showing signs of promise currently.”
San Diego Xconomist Duane Roth, CEO of Connect, the San Diego nonprofit organization for technology and entrepreneurship, and founding CEO of Alliance Pharmaceutical.
Duane Roth: Qualcomm is positioned for the long term, as their primary focus is on defining new wireless technologies versus building products or services under the Qualcomm brand. By focusing on being the innovator, they stay at the leading edge in defining and patenting new enabling technologies to be applied by their product development and delivery service partners. I see Qualcomm flourishing in the next 25 years for a number of reasons: First they are in the center of the platform for communications for the next several decades—especially in the area of real time/ all-the-time information, including medical data and monitoring (global utility for health care delivery of the future), personal security, etc. Second, their business model is their strength and longevity—define the technologies that enable their partners to deliver the services. Finally, they are well-managed, with a great value system instilled by their founder.
