Cdma Early Days Creating Qualcomm

CREATING QUALCOMM
A CASE STUDY REVIEW BY NWANKWO EMMANUELWELCOME
© nwankwo emmanuel. 2010. All rights
reserved.

For more than 20 years,
Qualcomm has developed
technologies that provide
solutions to wireless
telecommunications operating
companies and their
subscribers.
Let’s do a review…
CREATING
QUALCOMM

CALIFORNIA
ARIZONA
TEXAS
Pennsylvania
NEW YORK
Maryland
Virginia
San Diego, California – where Qualcomm started
New York
City
Los Angeles
Houston
Chicago
Philadelphia
Phoenix
San Antonio
San Diego
Dallas
San Jose
Washington DCILLINOIS
This is home to Qualcomm, where Dr. Irwin M. Jacobs, Dr. Andrew Viterbi, Harvey White,
Franklin Antonio, Andrew Cohen, Klein Gilhousen, and Adelia Coffman founded Qualcomm.

1991198919881985
QUALCOMM TIMELINE FROM 1985 - 1991
Qualcomm lands
its first contract
and began
working with
CDMA
first major
OmniTRACS
order from
Schneider
National Trucking
Company
Qualcomm placed
a demonstration
that changed
wireless history in
San Diego,
California on
November 7, 1989
December, IPO
conducted making
4 million shares
available to the
public on NASDAQ
Qualcomm
pioneers M2M
communications
August 1988, the
Company
launches
OmniTRACS
Qualcomm makes
a historic phone
call, CDMA is
proven.
Qualcomm
becomes a public
company
Qualcomm
founded in July,
1985.
reserved.

• Form of spread-spectrum, a family of digital
communication techniques, been used in military
applications for many years.
• Core principle of spread spectrum is the use of noise-like
carrier waves.
• Introduced in 1995, CDMA quickly became one of the
world's fastest-growing wireless technologies.
• 1999, International Telecommunications Union selected
CDMA as the industry standard for new "third-
generation" (3G) wireless systems.
CDMA (Code Division Multiple Access)
reserved.

• Originally, there were two motivations:
– resist enemy efforts to jam the communications (anti-jam).
– hide the fact that communication was even taking place,
sometimes called low probability of intercept (LPI).
(history dates back to the early days of World War II).
• Proposed theoretically in the late 1940's, but
practically in the civilian marketplace 40 years later.
• Commercial applications became possible because
of two evolutionary developments:
– availability of very low cost, high density digital integrated
circuits, which reduce the size, weight, and cost of the subscriber
stations to an acceptably low level.
– realization that optimal multiple access communication requires
that all user stations regulate their transmitter powers to the
lowest that will achieve adequate signal quality.
CDMA evolution, how?
reserved.

Multiple Access (MA) analogy
• An analogy to the problem of multiple access is a room
(channel) in which people wish to communicate with each
other.
• To avoid confusion, people could take turns speaking (time
division), speak at different pitches (frequency division),
or speak in different languages (code division).
• CDMA is analogous to the last example where people
speaking the same language can understand each other,
but not other people.
• Similarly, in radio CDMA, each group of users is given a
shared code. Many codes occupy the same channel, but
only users associated with a particular code can
communicate.
reserved.

Let’s
go to
Aegis
Ok,
JAM
Nahīṁ
samajhatē
maiṁ
Je ne
comprends
pas
Das
verstehe
ich nicht
reserved.

Broadband application of CDMA technology.
Dial-up Internet - 2 minutes
Broadband Internet - 2 minutes
An illustration of how 1Mb of Emails is delivered by Internet connection
1 × 1MB emails
Many 1MB emails
© nwankwo emmanuel. 2010. All rights reserved.

We have always been in the semiconductor
business
• Our first hardware deliverable product was a full custom Viterbi
algorithm decoder chip ~ 1987
• We have always recognized that the key to feasibility of CDMA
was VERY aggressive custom chip design
• First chip sets required three devices for a mobile phone – 1991
• Second go around compressed the original 3 chip design into a
single chip enabling a fully functional dual mode AMPS/CDMA
phone – 1992
• Third generation enabled the first commercial dual mode
AMPS/CDMA phone – the QCP-800 - 1995
• Now focused on chip business leaving phone and base station
products to others
…CDG(CDMA Development Group)© nwankwo emmanuel. 2010. All rights
reserved.

QUALCOMM's Aim
Full scale adoption of CDMA by
a major carrier
Conditions
Convince Organizations to commit to
Jacob’s dream (CDMA)
Convince Standard-setting body to
standardize CDMA
Convince carriers to use CDMA-based
service
Equipment manufacturers committing to
Large-scale production of CDMA-based
equipment
Convince consumers with better Quality of
Service while transitioning.
Strategy to market CDMA
reserved.

QUALCOMM
R&D
SUBSCRIBERS
INTELLECTUAL
PROPERTY
RIGHTS
SERVICES &
APPLICATIONS
New
Ideas
Licenses
Devices
With advanced
Features
Advanced
Devices and
Services
Increased
Operator ARPU
Increased
Manufacturer
Revenue
Increased
R&D
MANUFACTURER
S
Chip
Sales
OPERATORSINNOVATE
Exhibit 3:
Qualcomm’s Business Model© nwankwo emmanuel. 2010. All rights
reserved.

Strengths
•Experience in Satellite technologies.
•Experience in Spread spectrum.
•Technical services deployment experience.
•Outstanding name reputation.
•Top-notch scientists and engineers.
•Modified OmniTRACS to a two-way system.
•Team spirit.
•Theoretical and practical knowledge of the
CDMA technology.
S Weaknesses
•Not financially buoyant for satellite.
•Little knowledge of haulage business.
•Technology not adopted in open market.
•One-way system of initial OmniTRACS
products.
•Insufficient funds for R&D.
•CDMA not yet deployed terrestrially.
W
Threats
•Geostar’s two-way tracking sytem.
•CDMA not been deployed in purchasable
equipments.
•TDMA was the initial wireles standard
deployed and was adopted by carriers.
•CDMA not yet standardized by the
Standards-setting bodies.
•Huge capital needed to roll out working
prototypes.
T
Opportunities
•Alliances with Omninet, PacTel and Nynex.
•OmniTRACS contract for Schneider.
•First to explore CDMA technology in the
commercial market.
•Existing ku-band television satellite system.
•PacTel Cellular was running out of capacity.
•TDMA could only offer at most two years of
growth headroom to carriers.
•Geostar headed for insolvency.
•CDMA is backward compatible.
O
Primary factors
SWOT ANALYSIS DURING THE YEARS 1987 - 1991
reserved.

Why do firms cooperate in technical standardization?
Industrial dynamics (Schematics)
The economic Industrial Organization theory suggests that it is very important for firms in
network technology markets to gain a sufficient market share for products and technology
platforms.
demand-side network externalities
(Katz and Shapiro 1985)
supply-side scale economies
(Klepper 1996, Simons 2003),
both of which generate first mover
advantages
REASON
the convergence of markets
towards one technology
subsequent adopters to buy
products based on this
platform
market share of the winning technology
growing initially at an exponential rate
be among the first to enter new network
markets and to obtain a critical market
share© nwankwo emmanuel. 2010. All rights
reserved.

OOTP
I.M.JACOBS
A.J.VITERBI
H.P.WHITE
DEVELOPMENT
FINANCE
ENGINEERING
DIRECTOR
COMML PROG. GOVT. PROG.
QUALITY ASSURANCE SECURITY CONTRACTS/
PURCHASING
HUMAN RESOURCES
ADV. ENG SYS. ENGINEERING OPERATIONS TECHNOLOGY
DIRECTOR DIRECTOR DIRECTOR DIRECTOR
● New College Grad
o New Hire
Exhibit 1:
Qualcomm Organization Chart
(1987)
reserved.

Service providers Network equipment
suppliers
Subscriber equipment
suppliers
Ameritech AT&T AT&T
NYNEX Motorola Motorola
PacTel cellular Northern Telecom Oki Electric
Bell atlantic mobile Alps Electric
Bell cellular Canada Clarion Corporation
GTE Nokia Mobile
Us West New Vector Sony Corporation
Exhibit 2: US wireless industry market participants
Source: form S-1 SEC Registration Statement, December 4, 1991
reserved.

Exhibit 4: Excerpt from Qualcomm Form S-1 Registration
Source: Form S-1 SEC Registration Statement, December 4, 1991
reserved.

Source: Form S-1 SEC Registration Statement, December 4, 1991.
Exhibit 5: Qualcomm Financials – 1987 – 1991
(All amounts are in thousands, except per share data)
reserved.

SEC Registration Statement?
reserved.

SEC Registration Statements have two
principal parts:
Part I is the prospectus, the legal offering or
"selling" document. Your company - the "issuer"
of the securities - must describe in the
prospectus the important facts about its
business operations, financial condition, and
management. Everyone who buys the new
issue, as well as anyone who is made an offer to
purchase the securities, must have access to the
prospectus.
reserved.

SEC Registration Statements, Part two
Part II contains additional information that the
company does not have to deliver to investors.
Anyone can see this information by requesting it
from one of the SEC's public reference rooms or
by looking it up on the SEC Web site.
reserved.

The Basic Registration Form - Form S-1
All companies can use Form S-1 to register their securities offerings. You
should not prepare a registration statement as a fill-in-the-blank form, like a
tax return. It should be similar to a brochure, providing readable information.
If you file this form, your company must describe each of the following in the
prospectus:
• its business;
• its properties;
• its competition;
• the identity of its officers and directors and their compensation;
• material transactions between the company and its officers and directors;
• material legal proceedings involving the company or its officers and
directors;
• the plan for distributing the securities; and the intended use of the
proceeds of the offering.
reserved.

Additional Information to form S-1
In addition to the information expressly required by the
form, your company must also provide any other
information that is necessary to make your disclosure
complete and not misleading. You also must clearly
describe any risks prominently in the prospectus, usually
at the beginning. Examples of these risk factors are:
• lack of business operating history;
• adverse economic conditions in a particular industry;
• lack of a market for the securities offered; and
• dependence upon key personnel.
reserved.

References
• http://www.sec.gov/edgar.shtml
• http://www.sec.gov/
• http://www.secinfo.com/
• http://idv.sinica.edu.tw/kongpin/teaching/io/
KatzShapiro1.pdf
• http://www.wikipedia.com
reserved.

QUESTIONS?THANK YOU
FOR LISTENING
Hope the session was informative?
reserved.

Cdma Early Days Creating Qualcomm

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