May 26, 2005, 4:12 PM — Qualcomm Inc. Chairman and Chief Executive Officer Irwin Jacobs defended his company's licensing strategy during a Wednesday night appearance in Mountain View, California, and said he sees no threat to it from Wi-Fi or WiMax.
The San Diego company pioneered CDMA (Code Division Multiple Access) in the 1980s and now collects royalties from vendors that use the cellular technology, which has grown to include both major 3G (third-generation) mobile data systems. The strategy of setting up an ongoing source of revenue stems from Qualcomm's early days when it sold the OmniTRACS truck fleet management system as well as a service, according to Jacobs, who co-founded Qualcomm in 1985. Licensing revenue has been an essential source of funding for Qualcomm's development of CDMA-based technologies, which is still ongoing, according to Jacobs.
"One of the things you cannot do is stop. You have to keep running and keep running fast," Jacobs told an audience of Silicon Valley engineers at a Computer History Museum event.
The industry isn't about to abandon Qualcomm-linked technologies for other wireless systems in order to get out of licensing fees, Jacobs said.
He dismissed Wi-Fi hotspots as being redundant once subscribers can buy monthly services using high-speed mobile data systems such as CDMA2000 1x EV-DO (Evolution-Data Optimized), WCDMA (Wideband CDMA) and a faster version of WCDMA called HSDPA (High-Speed Downlink Packet Access).
"Now that you're paying ... for a service you can use anywhere ... why would you pay extra to go to a hotspot?" Jacobs asked.
He also took digs at WiMax, a longer range wireless technology that in the future will allow for mobility.
"WiMax ... has a tremendous advantage over CDMA2000 1x EV-DO or WCDMA HSDPA. ... One of the great things is that it has the name. But it's still not a technology," Jacobs quipped, referring to the fact that WiMax for fixed broadband will not ship until later this year and the mobile version of it is still being standardized.
Time is on Qualcomm's side, because it will take years for service providers to acquire frequency licenses for WiMax and to roll out the technology, he said.
"How do you transition from one technology to another technology?" Jacobs said. "You'd better support both for some significant time period. If you want to support both ... you're a friend of ours," he said, to laughter from the audience.