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Reticular Systems

It’s a time that Roberto Padovani recalls vividly — the moment in 1989 when he and other engineers at Qualcomm Inc. proved that their novel wireless technology worked.

The upstart business that formed in 1985 had won a contract in 1987 to build a prototype cell phone system based on a new technology called code division multiple access, or CDMA, said Padovani, now the company’s chief technology officer.

“It was a daunting task. I don’t think my family saw me for the next year and a half,” he said.

Because a system based on the technology never existed before, Qualcomm engineers had to create everything from scratch, including building two base stations, two vans with transmission and reception equipment, even the phones. Once the system was built, the company assembled a group of some 300 telecom industry folks, manufacturers of network equipment and major carriers, to demonstrate how it worked.

When it came time to make a call, it was 3 in the morning. Rather than wake someone up, Padovani suggested calling his mother, who lived in Verona, Italy, where it was noon.

The Right Call

That call set Qualcomm down a path that led to CDMA becoming the predominant wireless technology, and the company becoming the No. 1 chip maker for wireless devices in the world.

It is also, by far, the largest public company in San Diego County measured by revenue ($11 billion last year) and employment (17,500 as of September with about 12,000 locally), according to Qualcomm.

It also led to the establishment of the region as a major hub for research and development involving wireless technologies.

There are more than 600 enterprises engaged in some aspect of telecommunications. Those businesses include small startups, major public companies based locally, such as Leap Wireless International Inc., Novatel Wireless Inc. and ViaSat Inc., and a good number of multinational telecoms with local offices, due partly to Qualcomm’s presence, including LG Electronics, Nokia, Sony Electronics Inc., Kyocera, Huawei Technologies Co. Ltd., and Sierra Wireless.

According to a study in 2008, Qualcomm’s economic impact on the region was $5.5 billion in 2007, or about 3 percent of San Diego’s gross regional product. The company’s local employment then was counted at about 10,000, which supported some 26,000 other jobs, the study conducted for the San Diego Regional Economic Development Corp. found.

Undoubtedly, Qualcomm co-founder Irwin Jacobs made an impression when he testified in February in Washington, D.C., before a U.S. Senate committee, urging lawmakers to continue funding research at small businesses.

“Today, people all over the world are interacting with each other in different ways because of the technologies we created at Qualcomm,” Jacobs testified then. “Of the 5 billion mobile subscribers worldwide, approximately 1 billion are using 3G or 4G devices. … Since our founding just over 25 years ago, the mobile phone used primarily for voice communication has become an extraordinarily powerful mobile computer — the largest information platform in the history of humankind — one based on Qualcomm’s innovative CDMA technology.”

Rebuilding the Local Economy

Marney Cox, an economist for Sandag, aka the San Diego Association of Governments, the regional planning agency, said Qualcomm’s growth in the past two decades was a major factor in San Diego’s ability to rebuild its economy following the devastating job losses it felt in the early 1990s, when aerospace and defense companies laid off thousands of workers.

As in the biotech industry, the local telecom industry has expanded due to the fact that like-minded businesses and suppliers tend to converge around larger entities doing cutting edge research, said several observers.

“Companies within the same cluster tend to cluster around other competitors,” said Sanford Ehrlich, the Qualcomm executive director of the Entrepreneurial Management Center at San Diego State University, a privately funded center associated with the College of Business Administration. “That clustering drives competition and drives collaboration.”

Martha Dennis, who co-founded a telecom business called PCSI, said a major factor in building Qualcomm was recruiting the best young engineering talent from the nation’s top bastions of academe. “I spent a lot of weekends going to MIT and interviewing students, and enticing them to come to San Diego. That was the beginning of building the tech community that we have today.”

Dennis, a former employee of Linkabit — a consulting firm co-founded by Jacobs and fellow engineering professor Andrew Viterbi in 1968 — credits Dick Atkinson, then the chancellor of UC San Diego, for realizing how important it was for the growing wireless industry to have a nearby training ground to provide home-grown engineers rather than having to import them.

Not only did UCSD’s engineering school (named the Jacobs School of Engineering) gradually develop to become the largest and best in the University of California system, the university also founded a top-level business school (the Rady School of Management) that could support the technical expertise with first-rate management and marketing talent to the fledgling wireless industry, she said.

An Innovative Approach

A relentless focus on solving real problems and thinking outside the box marked the culture of Qualcomm in the early days, and is still an intrinsic factor for its astounding success, said Rick Kornfeld, who joined Qualcomm in 1986 as its 20th employee after working at Linkabit for about five years.

The training, experience and mentoring that he received while at Linkabit and Qualcomm gave him the ability to start two other companies after he left Qualcomm in 1996, said Kornfeld, who was recruited by Qualcomm co-founder Harvey White.

“They (Qualcomm) hired the best engineers and gave them the best tools available to help them do their jobs,” said Kornfeld, now the chief executive of Grid2Home Inc., a communications software company.

He added: “There was a lot of creativity, a lot of flexibility, but the focus was always on tangible results and being accountable for those results.”

Bob Sullivan, dean of the Rady School, said there is no doubt that the wireless industry would have existed somewhere, but if not for Linkabit and Qualcomm, that hub may have been established elsewhere.

A key decision was Viterbi relocating from Los Angeles to San Diego, Sullivan said. “Had not that happened, we would probably be talking about San Diego being a wannabe to LA.”


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