Nov 21, 2008

Business - Q&A Irwi Mark Jacobs;Chairman Qualcomm

Moinak Mitra

Even at 76, Irwin Mark Jacobs stands out. A small eater, the bespectacled chairman of the $8.87 billion Qualcomm is busy fidgeting with a gadget on the well-laid breakfast table. His plate is already quite full. After all, the widely acknowledged ‘father of CDMA’ has to leapfrog to the next challenge. It turns out he’s taking a long hard look at a WCDMA-compliant e-book due for launch this December. In an exclusive interview with CD, the MIT maverick talks about telephone-computers , war-inspired technology and how the Qualcomm equation was finally cracked. Excerpts:

Did people know in 1985, when you cofounded Qualcomm, that digital wireless communication would work?

Not a bit. Actually, Qualcomm was my second company. I first started Linkabit, which did a lot of government work initially before taking on commercial projects and grew by about 50-60 % a year; I sold the company and retired in 1985. Then I started teaching and kicked off another business with seven people called Qualcomm.

When we started, we didn’t know of CDMA (Code Division Multiple Access) or have a business plan. We just knew of digital and wireless . I thought we’ll do business much the way it was done at Linkabit and get some government programs.

We did get some government clients initially, including one that had to do with orbiting satellites for military communication systems. In about six months, we came up with the idea of CDMA and a truck communication product via satellite, called OmniTRACS , which was our first commercial project. This was extremely successful but we could do either that, or CDMA and thought that CDMA would take much longer to develop.

So we focused on Omni-TRACS until we bagged our first major contract with Schneider Trucking Company in 1988. Then we started focusing on CDMA.

When we had started the company (Qualcomm), Hughes called us and said that it had a proposal from the FCC (Federal Communications Commission) to develop mobile technology. They signed a contract with us on finding a better way of doing it. It was my second meeting with them, when I was driving from LA to San Diego, that I thought, perhaps, CDMA was a better way of doing it. We then presented the technology to Hughes, who was skeptical , although they did fund us to some extent to test it. All the tests looked positive but work came to a stop when it said it would take them many years to attain a license from FCC.

In 1989, the industry was thinking about how to move to the second-generation—the choice was between TDMA (Time Division Multiple Access) and FDMA (Frequency Division Multiple Access ). They looked at CDMA but everybody threw up their hands and said that it might never become commercial.

By March the same year, we became confident that CDMA was interesting and started talking to operators. Nobody was interested. But the fact that CDMA had this possibility of offering at least 10 or 20 times capacity improvement than the others clearly showed CDMA’s superiority.

So we made another round of presentations and more people were now interested in CDMA. It took us two years to develop the chips, and so in 1991, we invited everyone back again for CDMA standard phones and base stations . We did this demonstration and everybody in the US wanted a second standard , CDMA. So the US had two digital standards—TDMA and CDMA. In Europe, the countries are smaller and roaming is important so operators there chose GSM.

As a pioneer in the commercialisation of CDMA mobile wireless technology, where does CDMA score over GSM?

GSM was focused not on getting good spectral efficiency but on roaming. So you put a lot of focus on the network side. But still, in Europe, if you go from country to country on work, it cost you significant money. So people had to buy additional SIM cards to keep the roaming charges down. But GSM and CDMA continued to improve.

People realised that they needed to have data access as well as voice access, and began the push for third generation. As GSM operators understood how to handle both voice and data, they recognised the need for CDMA also. So operators, who once said CDMA wouldn’t work, started looking at 3G and welcoming CDMA. All of 3G now is based on CDMA.

Now CDMA scores on both voice clarity and data. The next transition will be to do packet switching with voice. All the voice will go over the data networks, which means changing the infrastructure. This would simplify it and make it work better but it may take a year or two. Ultimately, 3G will be all packet-switched .

Where do you see the CDMA versus GSM battle going from here?

GSM operators will transfer over to 3G using CDMA. If you were with GSM, Qualcomm was a bad word. Now we are working with all such operators going to WCDMA and providing them support.

In parts of the developing world less than one in every thousand people have access to a computer compared to nearly 600 in every 1,000 in the developed world. How do you propose to bridge this digital divide?

The telephone is really a very powerful computer these days. The telephone will have a slightly larger version with a larger screen on it that runs on a battery for power and operates on the 3G technology. It’s based on the telephone, which is very reliable , unlike the PC. And it’s connected to the internet. So it’s a completely different technical and business model. Miniaturisation will become very important as all aspects of miniaturisation use less energy.

As a technology evangelist, who have you been inspired by?

At Cornell, I studied hotel administration for a year-and-a-half before going to engineering. But that has largely to do with two teachers at high school—my math teacher, Mel Felton, and chemistry teacher, Abe Bronzbegal, who were always unhappy that I had not gone into science. I kept in touch with them until they died and give scholarships to students in their names.

After cornell, I went to MIT, where I did my doctoral thesis on reliable networks. I taught for seven years at MIT, and while there, I wrote a textbook along with another professor called ‘The Principles of Communication Engineering’ , that is taught till this day. We said that digital communication was the future.

At college, we always had friends who talked about California , and so on. So I decided to take a leave of absence from MIT to take up a resident research fellowship at Jet Propulsion Laboratory in Pasadena. We enjoyed California and discovered cities like San Diego and Berkley.

We thought we would come back at some point. Just after getting back to Boston from California, I got a call from Henry Booker, the electromagnetic
theory professor from Cornell, saying that he picked up a position at the University of California in San Diego, and wanted me to help him start the engineering department there. We thought about it—our friends, families and careers were all on the East Coast.

So we turned it down. Two days later, we decided that it was the wrong decision and called Booker to say that we were coming. When we arrived there, because of my textbook , my MIT background and all the interest in California about aerospace, I had lots more requests coming my way for consulting than I could possibly handle. So we decided to start a business based on consulting . And that was the beginning of Linkabit in 1968.

In your long career, you have seen the crests and troughs of world history...the Second World War, Vietnam. You were born in 1933 when Hitler became Chancellor of Germany. How do wars aid technology?

In fact, one of my most vivid memories is hearing the report of Pearl Harbour over the radio in 1941. Wars prop up huge amounts of improvements in technology and electronics. Radar technology came up. Nuclear physics became very strong. That explains why we were very strong on defense work initially before moving on to commercial projects.

We designed the first scrambling system at LINKABIT for satellite-to-home-use . It became the US standard and we went to a factory in Puerto Rico to build those. It became a major instrument before getting sold to Motorola. We also developed V-SATs , which were sold to Hughes.

Where does innovation come from? Is it a gut feel, or more?

I still tell my people at Qualcomm to think of the company as a startup with good cash flows because we can innovate more ideas only if we’re able to support them. But you don’t want to make a small improvement, you want to forge ahead to make a significant improvement and bring it to the market early enough to raise price, and then go on to the next product.

So at Linkabit, we developed that strategy which we follow to this day at Qualcomm . Now when you try to innovate a new product and strive for more significant changes, you should ask people whether if it would be a good thing because nobody has the background to think of the possibilities.

You, along with your wife Joan, have been cited by Business Week, among the 50 ‘Most Generous’ philanthropists in the US. Have you consciously worked at the ‘giving-back-more’ culture?

We’ve all come from very humble backgrounds. But that apart, I think it’s very important to support communities. So I’ve always been interested in education and instituted scholarships and fellowships. Also, we support a lot of culture—music , theatre, arts, public television, symphony orchestra. In India, we support measures for the upliftment of the girl child.

We talk about innovation in universities. It is important to fund innovation and keep a keen eye on talent there. So we spend several millions of
dollars to fund education.

When people look back at your contribution, what would you want them to remember you for?

First of all, business dealings and contacts have to be honoured and on ethical lines. Also, as someone who nurtured the spirit of innovation that starts with limited resources . But by thinking hard and working at it, I’ve had very good people to work with and build up the business. Being in touch with people is a very important thing

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