Qualcomm

Corporate history

Qualcomm was founded in 1985 by Cornell and MIT alumnus and UC San Diego professor Irwin M. Jacobs, USC, MIT alumnus Andrew Viterbi, Harvey White, Adelia Coffman, Andrew Cohen, Klein Gilhousen and Franklin Antonio. Jacobs and Viterbi had previously founded Linkabit. Qualcomm's first products and services included the OmniTRACS satellite locating and messaging service, used by long-haul trucking companies, developed from a product called Omninet owned by Parviz Nazarian and Neil Kadisha, and specialized integrated circuits for digital radio communications such as a Viterbi decoder and now it is one of the leading processor makers for smartphone companies.

In 1990, Qualcomm began the design of the first CDMA-based cellular base station, based upon calculations derived from the CDMA-based OmniTRACS satellite system. This work began as a study contract from AirTouch which was facing a shortage of cellular capacity in Los Angeles. Two years later Qualcomm began to manufacture CDMA cell phones, base stations and chips. The initial base stations were not reliable and the technology was licensed wholly to Nortel in return for their work in improving the base station switching. The first CDMA technology was standardized as IS-95. Qualcomm has since helped to establish the CDMA2000, WCDMA and LTE cellular standards.

The following year, Qualcomm acquired Eudora, an email client for PC that could be used with the OmniTRACS system. The acquisition associated a widely used email client with a company that was little-known at the time.

In 1997, Qualcomm paid $18 million for the naming rights to the Jack Murphy Stadium in San Diego, renaming it to Qualcomm Stadium. The naming rights will belong to Qualcomm until 2017.

In 1999, Qualcomm sold its base station business to Ericsson, and later, sold its cell phone manufacturing business to Kyocera. The company was now focused on developing and licensing wireless technologies and selling ASICs that implement them.

Steve Mollenkopf was promoted to president and chief operating officer of the company, effective November 12, 2011. Mollenkopf's appointment as CEO was announced on December 13, 2013 and took effect on March 4, 2014. He succeeded Paul E. Jacobs, who remains executive chairman.

CFO Bill Keitel retired and was replaced by Applied Materials CFO George Davis on March 11, 2013.

Vista Equity Partners took over the Omnitracs business from Qualcomm Incorporated in November 2013.

In October 2014, Qualcomm wrapped up a deal for chip maker CSR Plc for a fee of $2.5 billion, beating its biggest rival Microchip Technology.

In November 2014, Qualcomm CEO Steve Mollenkopf announced at the company’s annual analyst day meeting held in New York City that the company is planning to target the data center market with new server chips based on the ARM architecture and plans to make them commercially available by the end of 2015.

From 2012 to 2014, Qualcomm saw substantial revenue and profit growth as its Snapdragon System-on-Chip took market share from other competitors such as Texas Instruments' OMAP and Nvidia's Tegra to become the de facto standard for Android smartphones, and for a while Qualcomm's market capitalization surpassed that of Intel. However, surprised by the release of the 64-bit Apple A7 in September 2013, Qualcomm had to quickly come up with its own competing 64-bit chip. Qualcomm's resulting Snapdragon 810 and 808, which used generic ARM cores instead of their own custom-designed cores, were not well received due to overheating and performance problems, which led to large customers like Samsung opting to use their in-house Exynos processor instead. Furthermore, Qualcomm was facing anti-trust investigations in China, the European Union, and the United States. The combination of these pressures caused a significant fall in Qualcomm's profits and stock price in 2015.

In July 2015, the company cut 4,700 jobs or about 15 percent of its 31,300 current workforce due to decline of sales. Executive management knew this was coming so they came up with a plan to retain its employees. However, instead of paying reasonable salary, executive management used this plan as a justification to give themselves a big payout first and then lay off employees later.

In December 2015, Qualcomm Inc. announced that it had rejected calls to split itself in two, deciding to keep its chipmaking and patent licensing businesses together.

Mobile phone standards

Qualcomm pioneered the commercialization of the cdmaOne (IS-95) standard for wireless cellular communications, following up with CDMA2000, an early standard for third-generation (3G) mobile.

Today, the company is the leading patent holder in advanced 3G mobile technologies, including CDMA2000 1xEV-DO and its evolutions; WCDMA and its higher-speed variant known as HSPA and its evolutions; and TD-SCDMA; as well as patents on 4G. The license streams from the patents on these inventions, and related products, are a major component of Qualcomm's business.

In June 2011, Qualcomm announced that it would release a set of application programming interfaces geared to give Web-based applications deeper links into hardware.

Satellite phone network

Beginning in 1991, Qualcomm participated in the development of the Globalstar satellite system along with Loral Space & Communications. It uses a low-earth orbit (LEO) satellite constellation consisting of 44 active satellites. The system is used for voice telephony via hand-held satellite phones, asset tracking and data transfer using mobile satellite modems. The system was designed as a normal IS-95 system, and used the satellite as a "bent pipe" or "repeater" to transfer cellular signals from the handset to the terrestrial base station. Unlike the Iridium system, which routes phone calls between satellites, the Globalstar satellite must always be able to see both the handset and the base station to establish a connection, therefore, there is no coverage over the Earth's poles where there are no satellite orbits. There is also no coverage in locations where the large Globalstar base stations are not in view (some locations in the south atlantic, for example.) Some of the Globalstar hardware is manufactured by Qualcomm. Like other satellite phone networks Globalstar went bankrupt in 1999, only to be bought up by a group of investors who are currently running the system.

Legal issues

In April 2006, a dispute between Reliance Communications and Qualcomm over royalty fees cost Qualcomm approximately $11.7b in market capitalization. In July 2007, Reliance and Qualcomm decided to settle the matter and agreed to expand the use of CDMA technology in India.

In June 2007, the U.S. International Trade Commission blocked the import of new cell phone models based on particular Qualcomm microchips. They found that these Qualcomm microchips infringe patents owned by Broadcom. Broadcom has also initiated patent litigation in U.S. courts over this issue. At issue is software designed to extend battery life in chips while users make out-of-network calls. In October, an ITC administrative judge made an initial ruling that Qualcomm violated the Broadcom patent covering that feature and the commission later affirmed the decision. Sprint Nextel Corp. is using a software patch from Qualcomm to get around a U.S. government agency ban on new phones with Qualcomm chips. In August 2007, Judge Rudi Brewster held that Qualcomm had engaged in litigation misconduct by withholding relevant documents during the lawsuit it brought against Broadcom and that Qualcomm employees had lied about their involvement.

In July 2009, South Korea's antitrust watchdog fined Qualcomm a record Won260bn ($207m) for "unfair" business practices related to its chipset sales, sparking strong protests from the company. The Fair Trade Commission accused Qualcomm of abusing its dominant position in the Korean market for CDMA mobile phone chips by charging higher royalties on handset makers that bought modem chips from its competitors, while offering rebates to customers who bought products mainly from the US group, the regulator said in a statement.

In 2009, Qualcomm and Broadcom entered into a settlement and multi-year patent agreement, ending all litigation between the companies.

In 2012, a federal probe was launched into the company’s compliance with the Foreign Corrupt Practices Act, which bars companies as well as individuals from bribing foreign officials to gain business.

In 2014, China's anti-monopoly regulator announced that Qualcomm was suspected of overcharging and abusing its market position. In February 2015, China moved to fine Qualcomm a record $975 million for tactics the government claimed hurt consumers.

On July 16, 2015, the European Commission announced that it had opened two antitrust investigations into Qualcomm's behavior in the field of baseband chipsets for consumer devices.

In January 2017, Apple announced a $1 billion lawsuit against Qualcomm for overcharging chips and failing to pay $1 billion in rebates. Qualcomm however rejected the accusations, calling the claims "baseless". A week before the Apple lawsuit, Qualcomm shares dropped as the FTC accused the company of excessive royalties for technologies that are "essential to industry standards." Qualcomm was sued by a group of shareholders in the wake of the aforementioned FTC ruling and Apple lawsuit.

Qualcomm's role in 3G

The current UMTS air interfaces are for the most part based on Qualcomm patents, and royalties from these patents represent a significant part of Qualcomm's revenue.

This followed a series of patent-related lawsuits and antitrust complaints, spearheaded by Broadcom, in the US. In 2006, Broadcom started a series of patent-related lawsuits and antitrust complaints against Qualcomm to get what Broadcom regarded fair terms for access to the W-CDMA technologies. Broadcom was soon joined by Nokia and others, and complaints were also filed in the European Commission.

In 2007, the European Commission launched an inquiry into Qualcomm's possible abusing of its dominant position in the market for third-generation phones. The complaints were first lodged in 2005 by leading handset manufacturers Ericsson, Nokia, NEC, Panasonic and Texas Instruments.

In October 2008, Nokia announced it will make a one-time payment of $2.29 billion (US) to Qualcomm as part of its patent agreement with the company.

The Chinese TDSCDMA 3G technology was developed primarily to avoid Qualcomm licensing fees, although Qualcomm claims that the Chinese technology still infringes on many Qualcomm patents.

Products

Software

Management & Diagnostic tool

QChat

QChat is a Push-to-Talk (PTT) technology. The QChat software application was developed by Qualcomm Internet Services (QIS) a division of Qualcomm and part of the Qualcomm Wireless and Internet group. QIS offers a set of software products and content enablement services to support and accelerate the growth of the wireless data market.

Qualcomm developed QChat to provide a reliable method of instant connection and two-way communication between users in different locations, but operating within the same type of network architecture. Prior to the existence of cellular and personal communications services networks, this type of communication was limited to private Land Mobile Radio System (LMR) technology used by public safety and utility service agencies. LMR has limitations, specifically its usage can be restricted by geographic coverage area and by use of disparate frequency bands.

QChat, an application developed for the BREW platform, is a PTT communication technology for 3G networks. QChat handsets and server software allow users to connect instantaneously with other QChat users anywhere in the world with the push of a button. In addition, QChat enables one-to-one (private) and one-to-many (group) calls over the 3G networks.

QChat uses standard Voice over Internet Protocol (VoIP) technologies. VoIP is a voice delivery mechanism that uses the Internet Protocol to manage the delivery of voice information. Voice information is sent in digital form over IP-based data networks (including CDMA) in discrete packets rather than traditional circuit-switched protocols such those used in the public switched telephone network (PSTN).

Functionality

QChat users on 3G wireless devices can connect to each other worldwide, in either private or group calls, with the push of a button. QChat uses Voice over Internet Protocol (VoIP) technologies to allow subscribers to communicate by using a PTT button on the handset instead of making a standard cellular call.

QChat calls are created by combining separate point-to-point connections between each IP endpoint; the process is managed by the QChat Applications Server, which is deployed on the carrier's IP-based Wide Area Network (WAN).

To initiate a call, a user presses the PTT button and receives an immediate indication of whether the call recipient is available. If he or she is, the caller can begin speaking immediately. If the recipient is unavailable, the caller will simply hear a negative response tone instead of a busy signal or voicemail.

Sprint agreement

On October 16, 2006, Sprint Nextel announced an agreement with Qualcomm to use QChat to provide high performance push-to-talk services to its customers on the Nationwide Sprint PCS Network, using CDMA2000 1xEV-DO Revision A technology.

QChat is able to inter-operate with iDEN push-to-talk handsets on the Nextel National Network.

Sprint's phones supporting QChat technology were released starting in April 2008, with a trial of business customers in Kansas and Colorado. Sprint then announced that the Nextel Direct Connect devices powered by QChat were available in more than 40 markets in June 2008.

Supported models included:

QuadRooter Security Issues

In August 2016, the computer security company Check Point found several serious security problems on Qualcomm chips. The bug called Quadrooter has the ability to let hackers read all information on Android phones. Even worse, hackers can have full access if the affected user installs an app that exploits one of the vulnerabilities. According to Check Point this affects 900 million Android users. Affected phones include some of the most recent Android phones. Check Point has published a scan tool for Android users and BlackBerry is developing a repair tool. Qualcomm has released fixes for all four issues, three of which had been included in the Android updates for the top Google phones at the time of publication of the bug.