Uplinq 2011: Jacobs' view of Qualcomm as a core technology enabler

SAN DIEGO — Qualcomm Inc. (QCOM) is an engineer shop at its core. It has flirted with some direct-to-consumer apps and gear, most notably its device division back in the day and most recently its failed FLO TV offering. But Qualcomm’s fortunes and greatest strengths flow from the technology, components and inventions it has developed since its inception.
CEO and Chairman Paul Jacobs hit this point repeatedly throughout the first day of the company’s annual event here.
“Qualcomm’s not really a company that takes things to the end consumer. We work with partners,” he said at a news conference.
“We’re not going to go out and build the end application. We’re not going to build devices anymore,” he said. “We build the enabling technologies… but we don’t build the final application or device that comes to market generally.”
While Jacobs said the company does plan to put some more money toward advertising its Snapdragon processor portfolio, for example, it’s obvious he has some hesitation.
“If I have a dollar to spend I spend it on engineering instead of advertising because I know what I’ll get out of that,” he said, noting that the company has generally always been run that way.
Jacobs kicked off Uplinq with some thoughts on mobility’s growing role and place of importance in society while at the same time almost daring attendees to embrace the opportunity and find ways to exploit mobility for greater good. Mobile has become a force for social change, he said.
“You’re sitting amongst the dreamers and the innovators of mobile,” he said. Mobile is the “largest technology platform in the history of mankind” and mobile data is expected to grow exponentially over the coming decade.
“Mobile is now the dominant computing platform and its never going back,” he said. “Our industries have converged into something new. What that means is the world has changed and its never going back either.”
Not surprisingly, Qualcomm wants to be right in the middle of this convergence. While Qualcomm sees growth in smartphones, 120 Snapdragon-powered smartphones and tablets have been announced so far and 250 more are in development right now, the company continues to do well with its Brew platform for feature phones. More than 1 billion Brew devices have been shipped so far and Jacobs sees a long road to go with 500 million feature phones expected to ship in 2015. About two-thirds of Qualcomm’s revenue comes from chipset and component sales and the remaining third comes from licensing.
During a news conference with media and analysts, Jacobs was also asked about his thoughts and Qualcomm’s plans for near-field communication technology, 3D and augmented reality.
“We’ve been working on NFC for a long time… It’s taken a longer time to get there than expected,” he said. “I’m cautiously optimistic about it. There’s clearly more push than there has been in the past.”
While NFC is a great technology, “It’s been a great technology for a long time. We’ll see how the retailers and merchants adopt it,” he continued.
As for what Jacobs thinks might be the next cool thing, 3D technology and augmented reality come out on top. Indeed, Jacobs is excited about the combination of 3D games and augmented reality.
“It might be cool. I mean we’ll see how things work it,” he said. “We’re not the guys that’s going to figure out exactly how it gets translated to the consumer… We’ll build the core technology.”
Wrapping up his keynote earlier in the day, Jacobs said, “this seriously is a critical inflection point in history.” There is a great “opportunity to unleash your creativity,” he said. “You guys are the trailblazers. We’ve got your back.”