QUALCOMM Incorporated engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services.
The company also engages in the development and supply of Code Division Multiple Access (CDMA)-based integrated circuits and system software for wireless voice and data communications, multimedia functions and global positioning system products to wireless device and infrastructure manufacturers. The company also manufactures and sells products based upon Orthogonal Frequency Division Multiplexing Access (OFDMA) technology, e.g. FLASH-OFDM.
The company grants licenses to use portions of its intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. The company provides satellite- and terrestrial-based two-way data messaging and reporting services for transportation companies, private fleets, construction equipment fleets and other enterprise companies.
The company provides the BREW (Binary Runtime Environment for Wireless) product and services to wireless network operators, handset manufacturers and application developers and support for developing and delivering over-the-air wireless applications and services. The company also makes investments to promote the worldwide adoption of CDMA products and services for wireless voice and Internet data communications.
SEGMENTS
The Company operates in four segments, including QUALCOMM CDMA Technologies Segment; QUALCOMM Technology Licensing Segment; QUALCOMM Wireless & Internet Segment; and QUALCOMM Strategic Initiatives Segment and other businesses.
QUALCOMM CDMA Technologies Segment (QCT)
QCT engages in the development and supply of CDMA-based integrated circuits and system software for wireless voice and data communications, multimedia functions and global positioning products. QCT’s integrated circuits products and system software are used in wireless handsets and infrastructure equipment. QCT products are sold to wireless handset, data card and infrastructure manufacturers. In fiscal 2006, QCT shipped approximately 207 million MSM integrated circuits for CDMA wireless devices worldwide.
QCT’s integrated circuit products, including the MSM, RF and PM devices and system software enable phone manufacturers to design attractive, slim and handsets for cdmaOne and 3G services with longer standby and talk times. The products also enable data card manufacturers to design modems that insert into laptop computers to facilitate access to the Internet via wireless networks. For wireless infrastructure manufacturers, QCT offers integrated circuits and system software that provide wireless standards-compliant processing of voice and data signals to and from wireless handsets. In addition to the key components in a wireless system, QCT provides the company’s customers with system reference designs and development tools to assist in customizing wireless phones and user interfaces, to integrate its products with components developed by others, and to test interoperability with existing and planned networks. QCT is closely aligned with manufacturers and operators in product plans, design and development timelines.
The 1xEV-DO technology is designed to provide wireless data and Internet access to consumers. The 1xEV-DO technology would be embedded in phones, laptop and handheld computers, and other fixed, portable and mobile devices to enable manufacturers to deliver products with access to services that were previously available through wired connections to the Internet or to enterprise networks. The company designed and developed a package of products, including both infrastructure and phone integrated circuits, in support of the industry-wide movement to standardize, develop and deploy 1xEV-DO technology in CDMA2000 networks.
The company has developed integrated circuits for manufacturers and operators deploying the WCDMA version of 3G. Approximately 30 device manufacturers have selected the company’s WCDMA products that support GSM/GPRS, WCDMA and HSDPA for their devices. To support near-term commercial network roll-outs, the company has also completed interoperability testing with global infrastructure providers representing wireless network operators worldwide using test devices based on its integrated circuit products.
The company’s MSM integrated circuit products are offered on four distinct platforms to address specific market segments and offer products tailored to the needs of users in those various market segments. The Value Platform addresses entry-level markets and enables voice-centric and basic data wireless phones. The Value Platform includes the company’s QUALCOMM Single Chip (QSC) product family, the industry’s first single-chip CDMA2000 1X products targeted at offering data services in emerging markets. The generation of QSC products, which includes the QSC6020, QSC6030 and QSC6040, are shipping in volume. The QSC products, the QSC6055 and QSC6065, are expected to ship samples in 2007. The QSC1100 product is expected to ship samples in the second half of 2007.
Features from the Multimedia and Enhanced Multimedia Platforms include support for multi-megapixel cameras, videotelephony, streaming multimedia, audio, 3D graphics and position-location capabilities. The MSM6275 was the company’s HSDPA integrated circuit shipped to customers in 2005. In the first quarter of 2006, the company shipped samples of its second generation HSDPA integrated circuit, the MSM6280, which supports data speeds of approximately 7.2 megabits per second to enable the deployment of data and multimedia services among wireless subscribers worldwide. The MSM6280 integrated circuit also integrates receiver technologies for increased data throughput and network capacity. In the second quarter of 2006, the company also shipped samples of the HSUPA chipset for wireless devices, the MSM7200. In addition to supporting HSUPA networks, the MSM7200 chipset also supports Multimedia Broadcast Multicast Service (MBMS).
The Convergence Platform enables portable business, high-fidelity entertainment, interactive 3D gaming, and other multimedia, connectivity and position location applications, which are integrated to enable the convenience of wireless devices and the next generation of wireless capabilities. The MSM7xxx-series of Convergence Platform is capable of supporting third party operating systems, such as Windows Mobile. In the third quarter of fiscal 2006, the company announced collaboration with Microsoft to provide integrated support for Windows Mobile on the MSM7xxx-series products.
The company’s Cell Site Modem (CSM) integrated circuit products are the primary integrated circuits in a wireless operator’s CDMA2000 base station equipment. EV-DO Revision A networks based on the company’s CSM6800 product are launch around the world. The CSM6800 provides a migration path to EV-DO Revision A, which enables wireless multimedia services, such as transfer of bandwidth-intensive files, including pictures, video and music) and interactive 3D gaming, and multicasting services powered by its FLO technology. The CSM6700 product is compatible with IS-95 and EV-DO Revision A standards.
The company’s gpsOne position-location technology is in approximately 200 million gpsOne-enabled handsets sold worldwide. Enabling a range of consumer and enterprise location-based services around the globe, gpsOne supports four modes of operation across various terrains: Hybrid Mobile Station-Assisted GPS (Global Positioning System) enables a location fix whenever a call would be placed; Mobile Station-Assisted GPS provides extreme sensitivity to GPS signals across various environments; Mobile Station-Based GPS provides repetitive fix capabilities that are ideal for navigation, tracking and games; and GPS enables positioning in off-network scenarios.
The company also offers power management integrated circuits to provide optimized system performance for each MSM platform. In fiscal 2006, the company announced and began to ship samples of the PM7500, a power management product, which supports the capabilities of its Convergence Platform chipsets. The company’s portfolio of PM integrated circuits delivers performance, time-to-market advantages and reduced power demands on wireless handsets when combined with MSM integrated circuits.
In addition to its relationship with Phillips Semiconductor, Inc., the company announced a relationship in 2006 with Atheros Communications, Inc. to provide support for its wireless local area network (WLAN) module on select MSM integrated circuits. These MSM integrated circuits would offer connectivity to WLAN networks, and to existing wireless networks, and would feature compatibility with 802.11b and 802.11g protocols on both CDMA2000 and WCDMA networks.
In fiscal 2006, the company also announced the introduction of the Universal Broadcast Modem integrated circuit, which supports its FLO technology, and Digital Video Broadcasting-Handheld (DVB-H) and one-segment Integrated Services Digital Broadcasting-Terrestrial (ISDB-T), creating a common platform that handset manufacturers would leverage to address multiple standards. The Universal Broadcast Modem product would interface with integrated circuits from the Enhanced Multimedia and Convergence Platforms for both CDMA2000 and WCDMA networks.
Suppliers: IBM, Taiwan Semiconductor Manufacturing Company, Ltd. and United Microelectronics are the primary foundry suppliers for the company’s family of baseband integrated circuits. Atmel, Freescale and IBM are the primary foundry suppliers for the company’s family of analog, radio frequency and power management integrated circuits. The company is adding foundry suppliers and has begun volume manufacturing with Chartered Semiconductor Manufacturing Ltd., Samsung Electronics Co., and Semiconductor Manufacturing International Corporation.
Customers: The company’s three principal customers include LG Electronics; Motorola, Inc.; and Samsung Electronics Company.
QUALCOMM Technology Licensing Segment (QTL)
QTL grants licenses to use portions of the company’s intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation, products implementing cdmaOne, CDMA2000, WCDMA, CDMA TDD and/or OFDMA (including WiMax) standards and their derivatives.
QUALCOMM Wireless & Internet Segment (QWI)
The three divisions aggregated into QWI include - QUALCOMM Internet Services, QUALCOMM Wireless Business Solutions, and QUALCOMM Government Technologies.
QUALCOMM Internet Services (QIS): The QIS division provides technology to support and accelerate the growth of the wireless data market. The BREW (Binary Runtime Environment for Wireless) products and services facilitate the delivery of data services. BREW customers would benefit from various offerings which include: uiOne for integrated user experiences with fast access to services on mobile phones; deliveryOne for differentiated and integrated, operator-managed support and delivery of wireless data content and services; and marketOne for a quick-to-market, hosted, scalable content delivery service that includes media titles, flexible management and monetization, content provider settlement and business intelligence services. QIS offers this set of BREW offerings to meet the distinct needs of companies delivering mobile products and services around the world. The BREW platform is part of a package of products for wireless applications development, device configuration, application distribution and billing and payment.
In October 2006, the company announced an agreement with Sprint for the development and use of its QChat product, push-to-talk technology designed to deliver walkie-talkie services optimized for EV-DO Revision A wireless networks, and interoperability with the Nextel National Network, which uses Integrated Dispatch Enhance Network (iDen) technology. QChat enables one-to-one (private) and one-to-many (group) calls over 3G CDMA networks. The technology also allows over-the-air upgrades of handset software, management of group membership by subscribers and ad-hoc creation of chat groups. QChat uses Voice over Internet Protocol technologies, thereby sending voice information in digital form over Internet protocol-based data networks (including CDMA) in discrete packets rather than the traditional circuit-switched protocols of the public switched telephone network.
KTF, a wireless phone operator in South Korea, launched commercial BREW-enabled applications service. Other operators have since commercially launched BREW services, including Alltel, Midwest Cellular, Sprint Nextel, U.S. Cellular and Verizon Wireless in the United States, KDDI in Japan, Telefonica in Colombia, VIVO in Brazil, Reliance and Tata in India, and China Unicom in China.
QUALCOMM Wireless Business Solutions (QWBS): The QWBS division provides satellite and terrestrial-based two-way data messaging and reporting services to transportation companies, private fleets, construction equipment fleets and other enterprise companies. Through September 2006, the company has shipped approximately 609,000 satellite-based mobile communications systems (OmniTRACS, OmniVision, EutelTRACS and TruckMAIL) and approximately 125,000 terrestrial-based mobile communications systems (OmniExpress, T2 Untethered TrailerTRACS and GlobalTRACS), which operate in 40 countries. Message transmission and position tracking for the OmniTRACS, OmniVision and TruckMAIL systems are provided by use of leased Ku-band and C-band transponders on commercially available geostationary earth orbit satellites. The OmniExpress, T2 Untethered TrailerTRACS and GlobalTRACS systems use wireless digital and analog terrestrial networks for messaging transmission, and the GPS constellation for position tracking. The mobile communications systems help transportation companies, private fleets and construction equipment fleets improve the utilization of assets and increase safety by improving communications between drivers, machines and dispatchers.
In the United States and Mexico, the company manufactures OmniTRACS, EutelTRACS, TruckMAIL, OmniExpress, T2 Untethered TrailerTRACS and GlobalTRACS mobile communications equipment, sell related software packages and provide ongoing messaging and maintenance services. The company sold OmniTRACS, OmniVision, TruckMAIL and OmniExpress systems for use by for-hire and private trucking fleets, service vans, marine vessels, trains, federal emergency vehicles, and for oil and gas pipeline control and monitoring sites. The company’s GlobalTRACS system is sold to the construction equipment industry, providing wireless access to equipment operating data and location, equipment type or manufacturer.
In fiscal 2006, the company announced the availability of its integration of the GlobalTRACS equipment management system with the next generation of the RentalMan product, a third party enterprise resource planning application. The improved application further integrates telematics data from the GlobalTRACS platform with RentalMan’s improved business information capabilities. Further integration of GlobalTRACS data into the RentalMan application means that users access and use information about equipment hours, operational history, location, maintenance and administrative data provided by GlobalTRACS. Other functionalities of the application include the capacity to help rental companies capture off-rent revenue, provide overtime billings and help validate rain day, holiday and downtime credits. The Data Visor business intelligence platform, initially designed for use with the company’s SensorTRACS/400 services, improves fuel and driver management through pinpointing excess idling and identifying important business trends.
In addition to the United States, the OmniTRACS system is operating throughout Europe and in the Middle East, Argentina, Brazil, Canada, Mexico, China, Japan and South Korea. Outside of the United States, Mexico and Europe, the company works with distributors or through joint ventures to provide the OmniTRACS service and products in foreign markets. Service providers that operate network management centers for a region under its granted licenses provide OmniTRACS messaging services.
QUALCOMM Government Technologies (QGOV): The QGOV division provides development, hardware and analytical expertise to United States government (USG) agencies involving wireless communications technologies. The company has developed, produced and shipped second generation CDMA secure wireless terrestrial phones for the USG that operate in improved security modes and incorporate encryption. In fiscal 2006, QGOV adapted, integrated and shipped CDMA2000 1X deployable base stations to the USG. Additionally, OmniTRACS products and services are being used for USG worldwide applications and were sold to the USG during fiscal 2006. The company’s QGOV customer is USG.
QUALCOMM Strategic Initiatives Segment (QSI)
The company makes strategic investments to promote the worldwide adoption of CDMA-based products and services for wireless voice and Internet data communications, including CDMA operators, licensed device manufacturers and companies that support the design and introduction of new CDMA-based products or possess capabilities or technology. The company makes strategic investments in companies and, venture funds to support the adoption of CDMA and the use of the wireless Internet.
The company’s MediaFLO USA subsidiary plans to deploy and operate a nationwide multicast network in the United States based on its MDS and FLO technology. MediaFLO USA would use 700 MHz spectrum, for which it holds licenses for a nationwide footprint to deliver video and audio programming to wireless subscribers. Additionally, MediaFLO USA plans to procure, aggregate and distribute content in service packages, which the company would make available on a wholesale basis to its wireless operator customers in the United States. The commercial availability of the MediaFLO network and service would be determined by its wireless operator partners.
MediaFLO USA prepares for the launch of its commercial service. Its San Diego based Broadcast Operations Center and Network Operations Center are operating. In addition to Verizon Wireless, which announced its intention to launch the MediaFLO USA service, MediaFLO USA is engaged in discussions with multiple domestic wireless operators on how they might utilize the MediaFLO USA service. The company develops its MediaFLO MDS and FLO technology to enable MediaFLO USA and potentially other international operators to optimize the delivery of multimedia content to multiple wireless subscribers simultaneously. The MDS would provide wireless network operators the ability to improve their multimedia service offering capabilities via scheduling and delivery of multimedia content.
Wireless network operators would utilize the MDS with their unicast networks and with multicast networks, operating on CDMA2000 1xEV-DO or WCDMA. FLO is a multicast air interface technology specifically designed for markets where spectrum is available and where regulations permit power transmission, thereby reducing the number of towers and related infrastructure required to provide market coverage. Furthermore, the MediaFLO MDS can integrate multicasting services provided approximately 3G operator networks with such services provided over a FLO network. The company would consider various corporate structuring and exit strategies at some point in the future, which would include distribution of its ownership interest in MediaFLO USA to the stockholders in a spin-off transaction.
Other Businesses
QUALCOMM MEMS Technologies (QMT): QMT develops display technology for the consumer-targeted mobile products. QMT’s interferometric modular display (iMoD) technology, based on a micro-electro-mechanical-systems (MEMS) structure combined with thin film optics, provides performance and power consumption benefits as compared to display technologies. The iMoD product would offer low power consumption than existing display products, thereby extending the battery life of wireless devices.
QUALCOMM Flarion Technologies (QFT): QFT develops and provides FLASH-OFDM, the wireless mobile OFDM offering. The company acquired Flarion Technologies, Inc. in January 2006 to expand its portfolio of OFDMA intellectual property and improve its research and development organization with expertise in OFDMA technology and products. FLASH-OFDM is an air interface technology designed for the delivery of improved Internet services in the mobile environment. The all-IP wireless network would support both broadband data and packetized voice applications.
QUALCOMM Wireless Systems (QWS): QWS sells products and provides services under commercial agreements to Globalstar, Inc. (Globalstar) and its service providers and other customers. Globalstar operates a worldwide, low-Earth-orbit satellite-based telecommunications system. As of September 24, 2006, the company held approximate 6.6% interest in Globalstar in its QSI segment.
Collaboration
The company has a strategic collaboration with O2 Plc, to offer network provider's portfolio of handsets based on QUALCOMM's uiOne offering.
Agreements
Huawei has collaborated with QUALCOMM, Inc. to offer commercial MBMS (multimedia broadcast multicast service) mobile TV interoperability testing (IOT), a mobile TV solution based on 3GPP Release 6. The IOT was performed on Huawei's UMTS/HSPA network with handsets based on the mobile station modem (MSM) MSM7200 chipset solution from Qualcomm. During the IOT, MBMS technology was used to transmit TV programmes at 256Kbps. Users were able to switch channels by pressing navigation buttons on the handset, and MBMS allowed streaming to be suspended during an incoming voice call and automatically resumed streaming when the call ended.
Motorola, Inc. has a collaborative agreement with QUALCOMM, Inc. to include Qualcomm's mobile station modem (MSM) chipsets in Motorola's UMTS handsets.
The company has entered into licensing agreements with certain companies, including EoNex Technologies, Infineon, Lucent, Motorola, NEC, Philips, Texas Instruments, and VIA Telecom. The licenses permit the licensees to manufacture CDMA-based integrated circuits using certain of the company’s intellectual property for sale to CDMA-based phone manufacturers.
Sales and Marketing
QCT markets and sells products in the United States through a sales force based in San Diego, California, and internationally through a direct sales force based in China, Germany, India, Italy, Japan, South Korea, Taiwan and the United Kingdom.
The QIS division of QWI develops and sells business-to-business products and services to companies worldwide. The QWBS division of QWI markets and sells products through a sales force, partnerships and distributors based in the United States, Europe, the Middle East, Argentina, Brazil, Canada, China, Japan, South Korea and Mexico.
The Company's CDMA Development Center located in Beijing, China provides training, support and equipment testing services primarily to manufacturers and mobile operators in China, and supporting research and development of 3G wireless standards based on CDMA and OFDMA. The center also supports the transfer of certain hardware and software technologies for product development and manufacturing to licensed manufacturers, and network design and optimization methods to operators and government bodies in China.
Competition
The company’s competitors include semiconductor companies, such as Freescale, Infineon, NEC, Philips, STMicroelectronics, Texas Instruments, and VIA Telecom; and telecommunication equipment companies, such as Ericsson, Matsushita, Motorola, Nokia, and Samsung.
History
QUALCOMM Incorporated was incorporated in 1985.
