QUALCOMM, Inc
A good source of history is the hagiographic:
The Qualcomm Equation: how a fledgling telecom company forged a new
path to big profits and
market dominance. Dave Mock. 2005.
AMACOM, NY.
Early history:
1968:Linkabit was founded by UCSD university professor Irwin Mark
Jacobs and UCLA professors
Andrew Viterbi and Len Kleinrock to handle consulting. Len
Kleinrock soon left. Linkabit
hired employees and went from hourly-rate work to bidding for
government contracts.
Did TDMA for satellite communications. 1971, Jacobs retired from
teaching to run company
full time. In 1980's worked on digital and encrypted satellite
communications. Did
encryption for HBO.
1980: sold company to M/A-COM. Linkabit did systems and M/A-COM
did components. Relations
soured, M/A-COM management wouldn't back long-term
projects. Jacobs quit in 1985, founded
Qualcomm in July 1985 with six other former Linkabit employees.
Had no product in mind.
M/A-COM did not both pursueing anti-competitive litigation.
Got contract from Omninet ($250,000) to design a satellite messaging
system for trucking.
Two-way satellite mobile communications had not been done outside of
military. Project
bacame big, buyers wanted entire package of service, so Qualcomm merged
with Omninet in
1988. OmniTRACS contracts started coming in in late 1988.
Cellular:
Cellular phone systems began in the U.S. in 1983 using AMPS standard,
in Chicago.
Typical phone
cost $3,000 in 1893. AT&T predicted one million users by
2000. By 1985, 200,000
subscribers in U.S., 1.5 million by 1988, 160 million by June
2004.
September 1988: CTIA publishes user performance requirements
asking for 10X improvement
in capacity. Qualcomm recommended CDMA based on past digital
communications experience.
Seemed military-type expensive solution, not applicable for commercial
use.
1987: over a dozen European contries sign memorandum agreeing to
development and
adoption of GSM.
January 1989: Telecommunicaion Industry Association votes for TDMA
digital system; Europe
already decided on GSM (also TDMA). This is IS-54, second
generation cellular.
Qualcomm decided to go right to network operators to try to sell CDMA,
got okay from
FCC (the operators could use whatever system they wanted).
Big push to sell to Pacific Telesis, PacTel. L.A. at
capacity.
technical challanges and solutions: Look up Bruce Lusignan and Don Cox
1. near-field far-field effect, near-far interference.
Phones close to BTS drown out those
far away.
open-loop power control: use information from automatic gain
control on reciever to
adjust transmit power.
closed-loop power control: BTS sends power control
messages to phones.
can instruct stationary phones to use less
power, since easier to communicate,
if system nearing capacity, can order all phones to drop
power and go to
lower quality level.Patent 5,056,109.
vocoder: 1,200 2,400 4,800 9,600
bits per second, would switch automaticaly.
2. handoff required perfect timing between BTS for handoff
Soft handoff: phone would contact several BTS
simultaneously, system decides which ones
to drop.
timing with GPS reciever in each BTS. GPS system
just starting back then.
Benefits for network operatorsL
1. more capacity, flexibility. could vary quality of calls
for capacity.
2. security from CDMA
3. frequency reuse between cells. in TDMA and FDMA adjacent
cells had to use different
frequencies to avoid interference.
4. could work from a piece of spectrum, with rest used by legacy
analog.
5. less BTS's needed in estimations.
Benifits for phone users
1. improved voice quality
2. privacy with cdma
3. soft handoffs take out disruptions, dropped calls.
4. longer battery life from dropped power levels.
November 3,1989: CDMA test in San Diego put together with PacTel
help. Put in CDMA equipement
into BTS's. GPS not fully operational then, demo times to
coincide with most overhead
satellites. Demo successful, drove van around making calls.
Excellent voice quality,
demonstrated 10x capacity improvement over AMPS.
February 1990: repeat test in New York City, with NYNEX Mobile as host,
successful.
Commitments from AT&T, NYNEX Mobile, Ameritech Mobile
Communications, Motorola,
OKI Electric, PacTel Cellular to develop CDMA in a two-year plan to
create a full system.
August 1990: Korean Electronics and Telecommunications Research
Institute presented with
CDMA. Had been looking for an opening in the cellular
communications field, since
everything in the 1980's was dominated by foreign companies.
Joint development agreement
in MAY 1991. Qualcomm would recieve royalties, but donate
20% back to ETRI.
July 1990, Qualcomm and network operators publish CDMA comman air
interface. Common protocol
created since CTIA and TIA already commited to TDMA. Called Green
Book, later revisions
Blue, Red and Gold. Lobby CTIA to accept these standards.
1990: Iridium announceed, LEO system with Motorola, Lockheed Martin,
Raytheon and
others.
November 1991: capacity trials, CAP I. Demonstration in San Diego
of commercial-style
system, with multiple mobile units. RF noise broadcast to
simulate more users.
December 4,5 1991: CTIA technology forum to present CDMA system, ASICS.
December 16, 1991: IPO to raise money, which had all been used up for
CAP I trial. 20 % of
company offere, 4 million shares at $16 a share. Closed at
$17.625 first day, raised
$68 million for Qualcomm.
1991: Loral signs with Qualcomm to to produce Globalstar. 48 LEO
satellites. Phones
would use regular cellular systems when in range.
January 6, 1992: CTIA board meeting unanimously endorsed TDMA again for
digital
cellular in U.S. Thought CDMA would not be ready until 1994, with
TDMA having a
two-year advantage. Not all bad, also recommended development of
wideband spread
spectrum alongside TDMA, but work on the other standard should not slow
or hinder TDMA
development.
April 1992: at meeting in Niagara Falls, suggestion made that CDMA CAI
was sensitive
military information. Released obtained to distribute.
May 1992: CDMA test with Deutsche Bundespost Telekom in Germany.
Then trial in Switzerland.
Bell Atlantic Mobile Systems testing CDMA around D.C. Good
performance in all trials.
September 1992: US West New Vector announced CDMA would be used in
upgrade. First U.S. implimentation
to be in Seattle by end of 1993.
1992: Qualcomm tests CDMA for PCS in San Diego with PacTel and in
Baltimore-Washington
with American Personal Communications
May 1993: Qualcomm agrees to supply US West with 36,000 cellular phones
July 1993: CDMA CAI published by TIA as IS-95. Lawsuits already
starting over IP.
Interdigital claimed part of IP.
August 1993: Clinton signs Omnibus Budget Reconciliation Act, permits
FCC to auction
PCS spectrum
December 1993: CDMA Development Group founded to lobby for CDMA around
the world.
February 1994: Qualcomm Personal Electronics founded with Sony having
49% ownership,
Qualcomm 51%
December 1994: Qualcomm and Northern Telecom join to make CDMA
infrastructure
1995: PCS auctions from FCC. A and B blocks go to
established companies, C blocks reserved
for small businesses, etc. A and B blocks concluded in
March. C auction held up
in litigation over who could bid, started in December. C block
auction surpassed
A and B prices. A and B price average was $15 per potential user,
C price average was
$40 per user.
June 1995: PCS PrimeCo and Airtouch Communications announce they will
deploy CDMA
July 1995: Sprint Technology Ventures goes with CDMA. Tide has
turned, other companies
sign up. War for CDMA essentially won.
October 1995: first commercial CDMA system launched in Hong Kong by
Hutchison Telephone.
1996: south Korea comes on line with hundreds of thousands of users.
1997: Qualcomm buys 50% of Chilesat PCS for $42 million. iin 1998
puts $110 million
into Pegaso Telectommunications (Mexico), OzPhone Pty. Ltd.
(Australia), Metrosvyaz
Limited (Russia), Orrengrove Investments Limited (Russia), and other
small start-ups.
September 1998: Leap Wireless spun off
Selling divisions:
Problems: Qualcomm dwarfed by Nokia and Motorola in
handsets, Lucent and Ericsson in
base stations and infrastructure. Volume not high enough for
profitability.
Qualcomm ahd conflict of interest since it was also selling ASICs to
other
phone makers. Chip business actually more profitable than phone
business.
Until 1997, QPE was only one producing CDMA phones, but
then Nokia, Samsung, Motorola
got in.
Feb. 1999: Axes 700 permanent employees.
March 1999: Sells infrastructure division to Ericsson, including
1,200 employees
July 1999: Sony announces it's leaving North American CDMA
handsets, turns over
manufacturing lines to Qualcomm.
December 1999: Kyocera would buy handset division.
Litigation:
1993: Interdigital files suit, claiming IS-95 infringes on patent
#5,179,571, Settled
in 1994 with Qualcomm paying Interdigital $5.5 million