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man who's betting the store, The
ASEE Prism, Oct 2001 by McGraw, Dan
Qualcomm CEO Irwin Jacobs is gambling big time that the world will adopt the cell phone technology that his company pioneered. The payoff could be billions of dollars.
In the old days-that is, up until about thirty years ago-technological innovation and business building were achieved in places where the physical mattered more than the intellectual. Cleveland and Pittsburgh grew because of their proximity to oil and coal fields, because they were conveniently located near rail and water transportation, and because of an abundance of unskilled laborers ready to do the dirty work required by their factories.
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In this old economy, places like San Diego were where you went to vacation or retire, or to get shipped out for military service. Any kind of real technological innovation was thought of as unlikely because no one in their right mind would want to buckle down in the lab when the waves were breaking off of La Jolla.
And when Irwin Jacobs arrived in San Diego in 1966, after seven years teaching electrical engineering at the Massachusetts Institute of Technology, he faced those kind of expectations. He had given up a prestigious teaching position at M.LT. for a professorship in computer science and engineering at the University of California at San Diego, which was then only six years old. His M.LT. colleagues scratched their heads at his move, and Jacobs himself has said that one of his primary motivations was a good deal on real estate. "We (his wife and four children) decided that if we were going to make the move before retirement, the sooner the better, because the land prices would only go up," Jacobs told Fortune magazine last year.
But Jacobs's move to the west coast would have a huge impact on not only San Diego but also on the worldwide application of wireless technology. Now 67, Jacobs is the CEO of wireless giant Qualcomm. San Diego, once considered too laid-back for serious business, is now one of the top clusters of high-tech businesses in the country, according to the Council on Competitiveness. The main reasons for the distinction is San Diego's proximity to brain power at the U.C.S.D. campus, the numerous biotech research facilities, military research contracts, and of course, $4 billion Qualcomm.
And as the world races toward the next generation of wireless technology (the third generation or "3G"), and all the billions of dollars in revenues that 3G will generate, the world of wireless technology is keeping a careful eye on Jacobs and Qualcomm in San Diego. Wireless communications on telephones and palm pilots are ready to take the next quantum leap where high-speed Internet access-with video applications and instant worldwide communication from a mobile phone-is a reality on every continent. But even though the technology is available, there are still the logistics of sorting out competing platforms and the difficulty of obtaining licensing from governments around the globe. Winning the race to be the dominant company implementing the lucrative technology isn't going to be easy.
It is much like the Betamax-VHS battle over video recorders two decades ago. On the one side is Qualcomm, which favors the CDMA2000 platform, which uses existing radio frequencies and would support older phones (CDMA stands for code division multiple access, a technology that breaks data into packets and which Qualcomm pioneered in the 1980s). On the other side is WCDMA (wideband code division multiple access), led by the Finnish wireless company Nokia Oyj. The two platforms have their roots in the same technology, and there is much debate over which is technologically superior. One major difference is that WCDMA requires operators to buy more airwaves, while CDMA can use spectrums they already own.
Finding a worldwide platform has been a dogged pursuit for the telecom industry worldwide. Whoever wins this battle needs to sign up governments to favor their platform, get the mobile carriers to sign on, and make their services affordable. If all this sounds extremely complicated and competitive, it is. At this point in time, 3G is being rolled out in a few countries, but until a worldwide platform dominates, the real promise of 3G wireless technology will go largely unfulfilled.
And into this battle for access to more information strolls Jacobs, a man who would be as well known as Bill Gates if he weren't so reserved. Jacobs has championed CDMA technology since the late 1980s, showing how CDMA's code packet-based technology was superior (it uses radio spectrums frugally) to the wellestablished time packet data platforms. It has been a crusade for Jacobs, who admits he does not particularly like public speaking and does not relish being the point man for pushing CDMA2000 around the world. But Jacobs has always believed in the importance of brain power, and the former professor is passionate about the superiority of his company's invention. "People have referred to this as a religious war," he said in a recent interview. "I have always tried to keep it rational." (Jacobs would not comment for this piece, citing the sensitive timing of the current negotiations over his platform's acceptance).
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